Wednesday, February 27, 2013

Kenner Mayor, Council Don’t ‘Shop Kenner First’; Give $100k Contract To Mississippi Firm Over $87.00

Last Thursday’s Kenner City Council meeting featured an interesting discussion regarding a seemingly innocuous contract for generator maintenance.

The two-year contract for preventative maintenance and service for the City’s 49 emergency generators drew criticism from local activist Jack Zewe when it was given to Taylor Power Systems of Richland, Mississippi, over the 2nd lowest bidder, Cummins Mid-South of Kenner. The monetary difference in the bids between the two companies was $87.00 and the contract is for two-years at an amount not to exceed $100,000 per year.
The contract was submitted to several companies to bid on with bids ranging from $49,900 - $176,000. Taylor bid $49,900 while Cummins bid $49,987.

While the “sealed” bid won by Taylor stated a fixed cost of $49,900, the actual legislation says “in an amount not to exceed $100,000 per year”, so, it is possible that Taylor could earn more than twice the amount that they bid.
Ironically, 27 of the 49 generators covered in this contract are from Cummins, many still under their factory warranty, and Taylor currently does not have any factory-trained technicians certified to maintain Cummins generators. Servicing the generators with a non-factory certified technician will void those warranties.

Taylor has held a formerly no-bid contract with the City of Kenner for the past several years to maintain generators.
Like Taylor, Cummins is also an established company. Cummins has contracts with several municipalities.

Zewe contended that Taylor did not possess two technical requirements listed in the bid including:
-          A Louisiana State Contractor’s License

-          An Electrical License within the City of Kenner

According to Zewe, those factors alone should have resulted in Taylor’s bid being thrown out as “non-responsive”.
The City of Kenner’s bid information states:

“A Louisiana state contractor’s license will be required in accordance with LSA-R.S. 37:2150 et seq. Bidders must write their Louisiana state contractor’s license number on the outside of the bid envelope prior to bid submission for public works construction projects estimated at $50,000.00 and above. Failure to mark the outside of the envelope with your state contractor’s license will cause your bid to be immediately rejected as being non-responsive.”
While this contract was bid through Public Works, it is a maintenance contract and not a construction project and, technically may not fall under that bid requirement.

Kenner CAO Mike Quigley partially addressed the license issue saying that Claude Chauvin, a Taylor representative, “has given us all Electrical licenses and so there is absolutely no concern in regards to licensing at all.”
Mr. Quigley did not discuss Zewe’s claim regarding the lack of a Louisiana State Contractor’s License or if Taylor had the required licenses before submitting the bid or while the company has had other contracts with the City.

However, since there was such a nominal difference in price, it would stand to reason that Kenner would give preference to a local, Kenner business over a Mississippi company. Right?
State law says that Kenner is mandated to use the lowest bidder, according Quigley.

But, not so fast.
State bid laws do allow for a 10% preference to Louisiana Vendors selling Louisiana products. However, this particular contract calls for the City of Kenner, not Taylor, to purchase many of the products that are utilized during the preventative maintenance including all batteries, belts and hoses.

According to CAO Quigley, “We are following the law.”
 But the City of Kenner’s written Purchasing Procedures give departments and the Mayor latitude and allow them to select any bidder they choose.

“If the department chooses a bidder other than the lowest bidder, they must provide written justification to the Purchasing Department for further evaluation and determination.”
An email to the City’s Purchasing Director seeking clarification on the bid went unanswered.

Also, the contract could have been submitted as an RFP instead of a sealed bid. As you may recall, an RFP was submitted, and, according to vendors, bid specs were changed multiple times, when Mayor Yenni and KFD Chief Hellmers purchased two fire trucks last year that cost $150,000 more than the next lowest bid.
Also at issue are response times, travel time and mileage.

"They (Taylor) are able to respond immediately; that is not an issue," Quigley said.

There is little doubt that Kenner would have received a far superior response time from a Kenner company than a company whose office is in Richland, MS, a suburb of Jackson. According to, driving time to Kenner from Richland is either 2 hours and 45 minutes using I-55 or 3 hours and 21 minutes using I-59.
Even if you consider that Taylor has a small, branch office in Geismar, that office is still about an hour away.

I guess Mr. Quigley and I disagree with the definition of "immediately".

When the City of Kenner recently switched telephony providers, response time was listed as an important consideration in the vetting process. Aren’t emergency power generators which provide power to City Hall, the Police Station, the Jail, Fire Stations, the 911 Call Center and sewer lift stations at least as important as telephone and internet services and ensuring that the city’s Facebook page is updated?
If the power is lost in the Kenner Jail, and the generator fails to automatically connect, I certainly would not feel very comfortable being in the dark for an hour or two while a technician is found and drives to Kenner from Geismar or Richland, MS.

Taylor’s previous contract also allowed them to bill the City for travel time and mileage. In fact, the written bid specs for this contract call for “a ‘turnkey’ operation” which includes “all labor, materials, equipment, fuel, transportation, storage of equipment, insurances, licenses, etc…” So, despite the Yenni Administration’s verbal assertions to the contrary, Taylor could have continued to charge the City for travel time and mileage between Richland, MS and Kenner.

 An amendment offered by Councilman Joe Stagni will not allow Taylor’s new contract to bill the City for those charges. However, the question remains: why did the City of Kenner pay Taylor these charges for the past several years without question and why would Taylor agree to not accept travel time and mileage compensation now, especially when the bid specs said they could?
The Mayor, along with the Purchasing Department, also could have rejected Taylor’s bid because of their licensing deficiencies, made the sealed bid an RFP, or split the contract to allow Cummins to provide service for the 27 Cummins generators and Taylor to provide service for the remaining 22 generators.

Since Cummins generators are deemed adequate for the City to purchase, it would stand to reason that Cummins technicians should be deemed adequate to service and maintain their family of generators.
So, with a stroke of the pen or a few minor changes, Mayor Yenni could have chosen the 2nd lowest bidder and Shopped Kenner First.

Why didn’t Mayor Yenni spend $87 more dollars, support a Kenner company (which would have generated more tax dollars for Kenner than the $87 difference in the bids), selected a company with a better response time (we are, after all, talking about Emergency Generators), Shopped Kenner First, proposed an RFP or split the contract?
Only Mayor Mike Yenni can answer those questions. Perhaps some of our readers can ask the Mayor. He and I don’t really converse much these days.