Thursday, June 19, 2014

Gloucester, VA Illegal Procurement By Utilities Department In Progress?

English: Deere construction equipment in Suffo...
English: Deere construction equipment in Suffolk,VA, photo by William John Grimes. (Photo credit: Wikipedia)
Just another fine example of how well Gloucester County, Va. follows Commonwealth of Virginia law; or not?
On June 15, 2014 I sent the following in an email to the Gloucester County Purchasing Director, Public Utilities Director, County Administrator and Board of Supervisors:
The process thus far to purchase a new mini excavator for the Utilities Department does not allow for competitive bidding.  The Invitation for Bids that was recently published specifies a specific manufacturer (John Deere) and a specific model (60G).  This is the same as sole source procurement, which in the instance of purchasing a mini excavator, is likely not applicable.  There are numerous mini excavator manufacturers who are just as reputable and offer machines, warranties and service that are comparable to John Deere’s.  If there is something specific about the requested item that makes it the only machine that can do a specific task; a description of such should have been included in the procurement notice.      
Do safety issues, excessive maintenance costs, or an excessive amount of hours on an existing machine justify this purchase or is this a new addition to the inventory?  If the latter is the case; is this purchase absolutely necessary at this time?  Is an enclosed cab or canopy option being considered?  Enclosed cab machines utilized in utility work environments increase safety risks due to the amount of work performed in close proximity to people, utilities, traffic and other machines.  Closed cab machines have a tendency to be utilized by employees as a heater or air conditioner which, among other negative things, increases fuel and maintenance costs. 
Based on professional experience and research; the John Deere 60 series mini excavator is just an enhanced version of the John Deere 50 series machines and is considered by many to be an odd ball machine.  Odd in that certain parts which make up the machines uniqueness are only specific to that machine.  The 60 series machines are several thousand pounds heavier than all other comparable machines and often require additional licensing and other transportation related expense increases.  JD-50 series machines outsell JD-60 series machines by a rather large margin.  Combined; these facts suggest an enhanced likelihood of higher maintenance and repair costs and longer down times from waiting on repair parts.  The JD-60 and JD-50 series machines are work horses and are primarily used in high paced production environments of at least 40 hours per week for 40 or more weeks out of the year.  Most contractors purchase the 50 series machines primarily because of cost differences.  Both John Deere machines are more than capable of fulfilling the Utilities Department’s needs, but the 60G is about $10,000 more expensive to purchase and costs more to operate, transport and maintain. 
Unless there is a specific reason why the Utilities Department requires something unique only to the John Deere 60G, the normal transparent procurement process should be followed and all authorized vendors should be allowed to submit bids.
Kenneth E. Hogge, Sr.
Thus far I have received the following response from the Purchasing Director:
“Mr. Hogge
Thank you for your email.
The present bid that we have advertised seeking prices for a John Deere 60 G Excavator is being sought as a brand name without substitution due to the Utility departments desire for this specific equipment.  It is my understanding that Mr. Schlesinger communicated with you regarding this issue and indicated that this specific equipment was desired by his department because of their review of comparable machines.
I do not agree with your assertion that our present solicitation does not allow for competitive bidding and the procurement method is the same as a sole source purchase. Rather, the solicitation is being offered as a proprietary purchase which allows any John Deere dealer to competitively bid on it.  I trust this will be the case because we have had past procurement programs for John Deere equipment that have garnered multiple bids.
As a side note, when the Purchasing Department received the requisition for this equipment, it also included a recommendation to acquire the machine from an existing national purchasing cooperative.  Certainly this would have been an option; however, I decided to initiate our own competitive bid for the excavator in anticipation of receiving a lower price than the cooperative and especially to determine if there was any local source that could bid on the equipment.  Obviously, the answer to this strategy will not be known until the bid due date of Monday, June 23rd.
I am unable to respond to the other issues in your email regarding the Utility Department's justification for the use of this excavator.  Responses to these inquiries rest with the operational requirements of Public Utilities and I am quite sure that Mr. Schlesinger would be willing to discuss them with you.
Our bid opening for the excavator is at 2:00 PM onJune 23rd and we will post a tabulation of the bids on our website shortly after that time.”
Bill Lindsey
Section 2.2-4300, paragraph C of the Code of Virginiastates in part;
that all procurement procedures be conducted in a fair and impartial manner with avoidance of any impropriety or appearance of impropriety, that all qualified vendors have access to public business and that no offeror be arbitrarily or capriciously excluded, it is the intent of the General Assembly that competition be sought to the maximum feasible degree, that procurement procedures involve openness and administrative efficiency, that individual public bodies enjoy broad flexibility in fashioning details of such competition, that the rules governing contract awards be made clear in advance of the competition, that specifications reflect the procurement needs of the purchasing body rather than being drawn to favor a particular vendor”
In his response, Mr. Lindsey stated,
the solicitation is being offered as a proprietary purchase which allows any John Deere dealer to competitively bid on it.”
A proprietary purchase is a purchase in which the specifications or requirements describe a product or service that is only available from one manufacturer or vendor, and which does not permit an equivalent product to be supplied. 
There are no specifications or requirements contained in the Invitation for Bids to support a purchase under the proprietary purchase title.  John Deere bidding against John Deere with respect to an excavator does not demonstrate competition as most heavy equipment dealers are assigned designated sales areas.  This will not necessarily prevent responses from multiple John Deere dealerships however it is still John Deere bidding against John Deere?
The Utilities Department is purchasing a piece of equipment of which type is manufactured and sold by numerous companies such as Case, John Deere, Caterpillar, Kamatsu, New Holland, Kubota, Yanmar, etc.  The exclusion of all companies except John Deere in the procurement process clearly violates Commonwealth law and the spirit for which the law was written.    
Commonwealth of Virginia law requiring all procurement procedures to be conducted in a fair and impartial manner with avoidance of any impropriety or appearance of impropriety has been completely ignored again inGloucester County.  So has the part of the law that requires that specifications reflect the procurement needs of the purchasing body rather than being drawn to favor a particular vendor.  
Manipulation of procurement processes seems to have become a normal way of conducting business in Gloucester County.  This unethical and transparency restricted way of purchasing goods and services is not what the tax payers expect nor is it what the General Assembly intended when the procurement laws were written.
Kenneth E. Hogge, Sr.
Gloucester Point
At around 5:00 PM on June 16, 2014 I submitted the following FOIA request to Ms. Lewis.
Please provide electronic copies of documentation reflecting the evaluation process utilized in determining which make and model excavator is required to fulfill the mission of the Gloucester County Public Utilities Department. 
On June 18, 2014 I received a response from Ms. Lewis indicating she will contact the departments concerned before being out of the office on the 19th and 20th and will provide a response to my request on June 23, 2014.  June 23rd is the date all bids on providing the excavator are to be in and opened.  Seems like stall tactics to me.

Our Notes:  You just have to love the way some people think they can just get away with doing whatever they think they want to without any consequences to their actions.  The question really does exist however if there will in fact be any consequences other than the department getting exactly what they want no matter what the state code says?  

  We have to ask the question;  is a kickback part of this plan?  Did a John Deer salesman teach the county how to ask for a specific product and get away with somehow bypassing state codes by doing this little trick?  It's a fair question that deserves to be asked.  Someone has to watch every area of the county government these days as there sure seems to be a lot of funny tricks going on everywhere. 

  Yet a further question is why does the department even need this?  If there is a lot of work to be done, maybe it's cheaper to rent what you need?  If not, then what about contracting the work out?  Who else is going to be using this machine?  

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