The D.C. City Council is considering awarding Pride Environmental Services (PES) exclusive 30-year rights to a potentially lucrative city bus shelter advertising market in order to help PES meet the terms of another exclusive city contract on which it is already in default.
The unusual proposal, which has been ushered through the preliminary procedures without full-fledged public hearings or competitive bidding, will be voted on next week and wouldk allow PES, an affiliate of the self-help organization Pride, Inc., to set up and collect advertising revenues from 500 bus shelters throughout the city.
PES, which plans to work jointly with a New York firm, would build the structures and maintain them. It would gurantee the city up to 5 percent of the revenues from the advertising or about $150 per shelter a year according to the legislation.
Sponsors of the bill hope that PES's profits will allow the firm to meet the terms of a 1972 contract it has with the city to set up and sell advertising on 10,000 public trash containers. PES has been able to put up only 4,000 cans so far.
If the Council awards the contract to PES, it will, in effect, reject an offer from another firm which has tentatively promised to pay the city government at least twice as much money each year for the privilege of building the shelters and selling advertising.
"Pride (Environmental Services) is a known quantity as far as minority youth and unemployment is concerned. I think these factors outweigh a pitch of money alone," said council member Wilhelmina J. Rolark (D-Ward 8), a major sponsor of the bill.
"You have some social conditions that sometimes outweigh these others when you shaft minorities and youth. This city is willing to take the chance with Pride," she said. "When you're talking about minority business you are going to have preferential treatment and I think the whole council is for that."
When asked if she thought the non-competitive award was fair to other minority businesses in the city, Rolark responded, "I think it's fair."
David Eisenstat, a lawyer representing the firm that had made the higher offer to the city for the shelter contract (Mass Transit Shelters Inc. of New Rochelle, N.Y.), said, "You've got an organization that is currently in default on one contract and you are trying to award them another city contract. That contradicts any philosophy of procurement that I know of."
"I get the feeling," Eisenstat said, "that politically in an election year, no one is willing to take a position against Pride."
Ordinarily, city contracts are awarded by the major's office through various departments. On any contract worth more than $2,500, city law requires competitive bidding.
In 1972, however, the pre-home rule Council awarded the trash can contract to PES and that, according to Edward B. Webb Jr., the City Council's general counsel, sets a precedent for the council's awarding such a franchise.
Webb also said that because the awarding of the franchise does not involve any expenditure of city money, competitive bids may not be required.
However, acting Corporation Counsel Louis P. Robbins said yesterday that his office was trying to determine if the council is acting within its powers and in accord with proper procedures. Robbins expected his office to have completed its opinion by Monday.
The bus shelters franchise plan is only one of several efforts that the elected City Council has made to increase the availability of city contracts to minority enterprises. The bulk of the city's population is black but few nonwhite operated firms have received city contracts in the past.
The current effort appears to have stirred some concern among others interested in bidding on the bus shelter ad rights because the District, with its high income and little other outdoor advertising, is seen as a highly desirable market.
The City Council awarded the trash can franchise to PES in 1972, and provided at that time that 10,000 containers were to be put up within 30 months. Before the completion of that period, however, the D.C. Department of Environmental Services altered the procedures under which containers were to be put up, according to Mary Treadwell, president of PES and executive director of Pride, Inc. Under new arrangements, about 6,000 cans are supposed to be in place now, she said. Fewer than 4,000 are.
At the present time, Treadwell said in a telephone interview yesterday, PES is operating at a financial loss. Last year, it lost more than $30,000, she said, and the firm still owes about $500,000 on loans taken out to begin its business.
Treadwell said that if the Council approves the plan, BusTop Shelters Inc., which currently has a franchise to do such advertising in New York City, would become a business partner with PES and in so doing, would provide money to settle the outstanding PES debt. The two firms would then split equally the profits from the D.C. operations.
Rolark, chairman of the Council's committee on Employment and Economic Development, held "roundtable discussions" on the plan June 5. Public notices of the discussions appeared less than a week before they were held. Such discussions are less formal than public hearings and do not require 15 days public notice, as the hearings do, according to council lawyer Webb.
At the roundtable, the plan was strongly supported by representatives of the D.C. Chamber of Commerce, the Metropolitan Washington Board of Trade, the Greater Washington Central Labor Council and Del. Walter E. Fauntroy (D-D.C.). The council is to vote on the plan at its Tuesday meeting.