In The News › City to rebid two sanitation contracts

Nov 4, 2010

Source: Fox 8

Filed under: Contracting, Orleans Parish

City to rebid two sanitation contracts

By Shelley Brown
Thursday, November 4, 2010
Fox 8 News

Renegotiating city contracts is one way Mayor Mitch Landrieu is dealing with an $82 million budget deficit. The city says talks with two of its largest sanitation companies have stalled, and the Mayor said Thursday it’s about money, not race.

Metro Disposal and Richard’s Disposal are both minority-owned businesses. The Mayor said that has nothing to do with why he’s trying to work out a better deal for the city.

“We are now at a point of no return. It is critical that we take this action today so that the city won’t be at risk on January 1st,” said the Mayor.

Mayor Landrieu said he’s opening the bid process for sanitation services in the areas of New Orleans that Metro Disposal and Richard’s Disposal currently serve.

Deputy Mayor and Chief of Staff Judy Reese Morse said, “we have worked tirelessly to reach an agreement with the two contractors in discussion today. We’ve had numerous meetings for several months.”

The city said after four and a half months of talks, it’s hit a road block. “I expect that this discussion like too many others in New Orleans takes on racial overtones. That is unfortunate because it has nothing to do with the contractors themselves. It has everything to do with the amount the city is being charged, the city’s ability to pay and my fiduciary duty to people of New Orleans to deliver a product of good value,” said Mayor Landrieu.

In August, the city was successful in renegotiating SDT’s contract. City attorney Nannette Jolivette-Brown said, “it’s saving the city $110,000 each month in 2010 and $1.3 million total in 2011.” The city said they’re also in the process of renegotiating River Birch’s contract.

The Mayor said if contracts with Metro and Richard’s are not renegotiated, they’ll cost the city $9 million more than it’s currently paying, and could hurt other critical services the Mayor said the public says it needs. Landrieu blames the Nagin administration for giving contract extensions to both garbage companies just before he left office and for terms that took the contracts to 2016.

Janet Howard with the Bureau of Governmental Research couldn’t talk about the legality of renegotiating contracts, but said Mayor Landrieu is doing the right thing in reviewing all contracts. “An outgoing administration has no business redoing contracts before the next administration comes in. It’s just a wrong practice to engage in beyond that. The last
administration also entered into a lot of very expensive contracts for unnecessary things,” said Howard.

The Mayor said the city has a legal basis to renegotiate. He said, “if the city of New Orleans is not in good fiscal health and can’t pay what was negotiated, the contract says there’s a non appropriation clause for every reason.”

An attorney for Metro and Richard’s tells FOX 8 they were suprised to hear the city is taking action. Daniel Davillier says both companies submitted new proposals to the city just yesterday. He said, “if, however, the city attempts to either terminate the existing contracts or actually award a new contract for the same services covered by the existing contracts, then Metro and Richard’s will vigorously defend the validity and enforceability of their respective contracts.”

According to the city, bids are due November 29, 2010.

Nov 4, 2010

Source: Fox 8

Filed under: Contracting, Orleans Parish

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