Burke: RAD contract savings assertion lacks inflationary realization

I read with interest the letter from Jeremy Takas. I received a similar one early this week although he raises some different points in this article.

Kevin Burke

Before I address Mr. Takas’ points, let me say that RAD is an outstanding trash hauler. So much so, that their proposal ranked second in the Town of Paradise Valley requests for single hauler proposals. Therefore, if the town was to declare an impasse with Republic Services, RAD would be the provider the town would be negotiating a contract with.

To the first point, and to the underlying context of Mr. Takas’ letter, this is not a low-bid contract.

The council and the RFP were very clear that pricing was only 30 percent of the proposal. The winning proposer needed to be the complete package of experienced, strong finances, a solid method of approach, and strong billing, customer service and education programs.

In Paradise Valley we want the Mercedes-Benz and that usually doesn’t come at the Yugo price.

Mr. Takas is right that RAD had a lower price point. As such, every rater scored RAD the highest in that category. In fact two of the raters gave RAD the maximum points available. So, even if they lowered their price, RAD could not have received a higher score or moved any higher than No. 1 in that category.

Second, Mr. Takas compares prices and offers a big savings number. Unfortunately, his price comparison is not valid past the first year because he assumes a fixed inflation rate, which RAD did not bid. RAD bid an inflationary rate tied to the Phoenix CPI and diesel prices. So 2.2 percent may be accurate for this point in time, but it’s flexes over the years making it an apples-to-oranges comparison.

Lastly, and most importantly, Mr. Takas asserts he was not able to offer pricing on a seven-year contract and if he had the prices would have been even lower. Again, this is not a low-bid contract, but more importantly, RAD’s proposal was not compared against Republic’s seven-year proposal.

It was compared against Republic’s three- and five-year proposal. And, when compared head-to-head, using the specific criteria of the RFP, Republic clearly had a superior proposal. Therefore, there was no reason to interview the number two scorer. The town left interviews open as an option during the rating process, but it was clearly discretionary and in the end, unnecessary.

So my job as the town manager is to take the top-rated proposal and try to make the best proposal even better. This begins a series of give-and-take negotiations.

I will not recount those here as it would take another full letter, but needless to say I gained some concessions and gave in other places. The town has a solid, complete proposal in front of it. I don’t hold myself out as infallible and there are probably specific terms that could have been negotiated to a better outcome, but again, I looked at the complete package and not just low bid.

I look forward to a robust discussion on Jan. 25th and thank RAD for making this a competitive process.

Editor’s note: Mr. Burke is the town manager of the Town of Paradise Valley

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