My friend and colleague, Chris McCabe, recently published an opinion piece on Philly.com concerning the May 16 ballot question that asks Philadelphia voters to approve a change in the way Philadelphia awards public contracts.
Currently, Philadelphia, like all municipalities in Pennsylvania, uses an objective lowest responsible bidder standard in the award of public contracts. Under this approach, public contracts must be awarded to a bidder that responds to all of the criteria of the request for bids and offers the lowest price. Under this traditional approach the award of public contracts is completely transparent.
The May 16 ballot initiative seeks to change this. If approved, Philadelphia could award public contracts using a host of subjective factors. What those factors would be are unknown because the policies are not yet written.
Pennsylvania courts have long held that the essence of the lowest responsible bidder approach to public contracts is to guard against fraud, waste, abuse, and favoritism. Unfortunately, fraud, waste, abuse, and favoritism are the rule rather than the exception in Philadelphia. The long history of insider dealing and corruption in Philadelphia government has so eroded the public trust that the letting of public contracts cannot be seceded to the subjective whims of bureaucrats.
Furthermore, the problems with Philadelphia’s proposed best value procurement proposal do not end with concerns over waste, fraud, and favoritism. While one would hope that any subjective factors injected into the procurement process would be limited to those that actually brought value taxpayers, history suggests otherwise. If passed, taxpayers can be assured that the subjective criteria will driven by special interest groups and identity politics. Special interest groups will lobby to include criteria that benefit their membership. Meanwhile, leftist Philadelphia elected officials will seek to include criteria aimed at righting some social wrong or bringing justice to the afflicted group of the week.
In the end, best value procurement will be a boon to insiders. But, as usual, the taxpayers will be left holding the bag.