It lays bare a philosophical choice in District government that’s played out over the course of three decades: Whether city contracts should go to the lowest bidder, or whether companies that are small, local, or “disadvantaged” should get a preference, even if their bids are substantially higher.
Gray (D) and members of his administration argued that their decision not to grant a contract extension to Baltimore-based Lorenz Inc. was rooted in a policy commitment to support those preferred businesses. Lorenz, hired last year to mow lawns and do other landscaping in six of eight city wards, by all accounts did a fine job and kept to their bid price, which was substantially lower than its competition.
But Lorenz is based in Baltimore, which in District politics subjects it to a additional round of political second guessing rooted in an era when local businesses — specifically African-American owned businesses — were unfairly excluded from city contracting under pre-Home Rule governments.
After 1974, and especially after the 1978 election of Marion Barry as mayor, that changed dramatically. Barry’s original plan to set aside 35 percent of city business for minority firms has morphed into the current “certified business enterprise” system, where “firms earn points for being small, locally based or minority-owned that give them a leg up in city procurements. And to this day that is the public policy of the District of Columbia (as it is in many jurisdictions), and it’s defended by even the most penny-pinching legislators. It is also the defense the Gray administration is presenting on its handling of the Lorenz contract.
That said, the Lorenz contract was subject to that very public policy: Its competition in the landscaping procurement included CBEs that got preference points factored into the final bid selection. In wards 3 through 8, Lorenz won anyway — its bid was low enough to trump the CBEs’ built-in advantage.
But in D.C., you can lose anyway. Any multi-year contract or any contract amounting to more than $1 million per year goes to the D.C. Council for approval, where the politics kick in. Witness what happened with the D.C. Lottery contract, where one bidder won the procurement without a minority partner, but later added one anyway in order to smooth the Council approval process.
Lorenz last year saw its contract challenged by Thomas (D-Ward 5), who said at the time that selecting the “lower bidder does not necessarily mean that you’re going to get better value.” He added that a portion of the increment would come back to the city through taxes paid by the company and its workers.
While Thomas’s objections weren’t enough to derail the contract award last year, the Gray administration said it was concerned that it would be different when the extension was sent to the council this year. So the Gray administration is opting not to renew the contract option — as it’s legally within its rights to do — and it is readying another solicitation in the hopes that a local firm can muster sufficient capacity and a low enough bid to win the contract.
This, it should be noted, is a separate issue from whether a contractor actually hires D.C. residents.
While CBEs get preference points based on their ownership attributes, the landscaping contract itself contains no mention of whether city residents get hiring preference. It’s unclear whether the city’s “First Source” law requiring resident hires on construction and economic development projects demands resident hires for lawn-mowing, too. Expect that to be explored at Friday’s D.C. Council hearing on this issue.