A division of the Madison Community Development Authority charged with providing housing to the needy has entered into no-bid contracts with outside companies worth tens of thousands of dollars, despite rules requiring the solicitation of bids for all contracts over $5,000.
"No one," responds Kelley Simonds of the CDA's Housing Operation Division, when asked which other companies bid on contracts inked with Allen Cleaning Service and TC Carpet Care. "If the amount is under $5,000, and we deem it reasonable, we can pursue it without going to bid."
But according to records previously provided by division director Agustin Olvera, Allen Cleaning Service was paid $21,766 in 2006 and $23,377 through late July of this year. TJ Carpets, meanwhile, was paid $25,628 in 2006 and $20,596 through mid-July.
Moreover, these two companies were the only ones for which Simonds was able to provide contracts in response to an open records request for "all" contracts between the CDA and outside firms that provide non-security services at CDA-owned housing. This although hundreds of thousands of dollars are annually spent on such firms.
Simonds says there is a third contract, with a firm recently hired to perform carpentry work, but was unable to locate it. "I've never seen it," announced his assistant, when he called out an inquiry regarding this document.
Union leaders including David White of Council 40 have made repeated requests for the CDA's contracts with outside companies, to no avail. White has publicly wondered whether the agency is avoiding contracts and bidding, instead working with favored firms.
That seems to be exactly what's happening. Simonds says no contract exists with 1-800-GOTJUNK?, a local franchise that in 2006 did more than $10,000 of work for the housing unit on, says Simonds, an "as-needed basis." Nor did he provide any for painting companies, which in 2007 were budgeted to get $123,000, or Messner, which is contracted to cut lawns at CDA properties. He says the job landed by Messner was put out to bid, but the other bidder withdrew. Messner has been paid at least $78,849 since January 2006.
For Allen Cleaning, Simonds has only one signed contract, dated 2004. It states that the company would get $2,024 a month for cleaning two CDA complexes, Braxton and Parkside. This arrangement, says Simonds, continues to this day, at the same rate.
"If we had to sign on for a specific period," explains Simonds, "then it would be considered for the full amount." But because it began as a monthly pact and "we have the right to terminate it at any time," he considers this deal - now three years and at least $70,000 old - to fall within the $5,000 no-bid threshold.
The "contract" for TC Carpet Care, meanwhile, is actually an invoice, from October 2006. It calls for the company to provide various services for $1,600 a month. Why is it an invoice and not a contract? Simonds says the person at TC Carpet Care "used the wrong form."
Such practices may seem slipshod, but Simonds says no one has complained. He notes that the federal government, which gives the CDA housing division about $12 million a year, does regular audits, and "we've never been found in violation of any of it."
The CDA has its own procurement policy, passed in 2000. It states that "no less than three offerors shall be solicited to submit price quotations" for all purchases in excess of $5,000, with additional rules for larger purchases. No bid is required for contracts under $5,000 "if the price is considered reasonable." But the policy also says "such purchases must be distributed equitably among qualified sources" and, "If practicable, a quotation shall be solicited from other than the previous source before placing a repeat order."
The CDA does not appear to be complying with these provisions. But Simonds says he's now moving to a new system in which "everything will go out to bid."
Unions representing city workers have long been upset over the CDA's acknowledged practice of not filling union job slots when they become vacant, instead hiring outside firms ("CDA Outsources Union Jobs," 9/21/07).
In 2005, a city employee "retired" from his job as a CDA painter only to be rehired less than a week later as an "independent contractor" doing the same work in the same locations using CDA supplies and the same set of keys. The painter's former union filed a grievance, and won. The city appealed, and lost. The sides have settled, with the city agreeing to add a union painter slot for at least one year.
The CDA argues that hiring outside firms on an as-needed basis is cheaper and more efficient than keeping people on staff. Union leaders dispute this, and attribute any savings to the CDA's refusal to follow the city's ordinance requiring that outside service providers pay a "living wage," currently reckoned to be $10.58 an hour.
"The CDA is sort of like its own entity," says Simonds. "It has its own charter. As a body, it has not subscribed to the city of Madison living wage."
CDA chair Stu Levitan first learned;that the CDA considered itself exempt from this ordinance last month, from the Isthmus article. He says the agency's decision not to follow other city agencies was made when the city living-wage ordinance was passed in 1999, a year before his appointment to the board. It never occurred to him to question whether the CDA was in compliance.
Levitan has since asked the CDA subcommittee that oversees housing policy to revisit this issue. The matter was set to come up for discussion on Wednesday night, past Isthmus' press time. Says Levitan, "I expect the CDA will voluntarily adopt a policy to comply with the living wage ordinance, even though it is not required to do so."
Madison Ald. Satya Rhodes Conway is "disturbed" by revelations about the CDA "essentially privatizing jobs" and is seeking more information.
"I am horrified that the city would engage in this kind of union-busting," she wrote in an email to Levitan. "I'm not convinced that privatization and outsourcing is any more efficient than maintaining a high-skilled, well-respected city workforce." But she admits the situation is "sticky," given the "unclear relationship" between the CDA and the city.
The CDA is a semi-autonomous agency with its own governing board that contracts with the city for employees to perform functions. Almost none of the housing unit's funding comes from the city, although its budgets are subject to Common Council approval. Levitan says that if council members don't like the way the CDA does business, they have only themselves to blame: "They approved the budgets."