As Gavin Newsom crosses the state touting job creation in San Francisco, the media should ask him about the bidding process that awards many of these jobs. San Francisco rigs contract criteria and uses agency-picked “outside” panels to camouflage politically-motivated decisions, and then denies access to key bidding information to forestall appeals. The process is so wired that, despite the City’s fiscal shortfalls, losing bidders cannot learn how their budgets compared to the winner until the time for appeal is passed and the contract is final. Fortunately, Supervisor David Campos has announced he will call for a public hearing about the Request For Proposal / Request For Qualification process that various city agencies are following. Nonprofit leaders may have to testify behind screens and with scrambled voices out of fear of agency retaliation, but the Board of Supervisors must bring transparency to the process and end the city’s rigged contracting practices.

After reading my May 12 piece on San Francisco’s rigged contracting process, Supervisor David Campos felt the article raised “serious concerns” that “clearly illustrates the need for greater Board of Supervisors involvement.” Campos will call for a public hearing to finally address a problem that becomes worse the more we learn.

Rigging Appeals

To ensure its favored bidder prevails, San Francisco agencies also fix the appellate process. They do this by limiting challenges to procedural rather than substantive defects, and by denying losing bidders essential information.

Consider the Human Services Agency’s (HSA) approach to RFQ 414, the proposal to master lease an all-women’s hotel that was detailed in my May 12 piece.

At the deadline for appealing HSA’s award, the agency refused to make available the respective budgets of the competing proposals. The agency said that such information would not become available until after its Commission approved the contract – well after the appeal period had passed.

How is it possible that in San Francisco, losing bidders do not even have the right to appeal contract awards on the grounds of comparative price?

Or to appeal on the basis that the winning bid was based on faulty numbers, rendering the proposal financially deficient?

When the HSA Commission approves the contract, it goes to the Board of Supervisors for approval. Absent a public outcry, the Supervisors will never learn if the winning bid was significantly higher than others, or whether it provided a cost for services that was pure fantasy.

That’s why the Board of Supervisors must not be deterred by the phony processes set up to create the illusion of a fair and honest bidding process. While many will likely condemn greater Board involvement as “politicizing” the process, the truth is that greater Supervisor involvement is essential to end to contract rigging.

In the meantime, I’m really looking forward to hearing candidate Newsom out on the campaign trail arguing against the merits of competitive bidding. That should prove popular in our financially stretched state.

New Revelations on Proposal Abuse

Since writing my May 12 piece, I learned that the RFQ process regarding the master leasing of a women’s hotel was even more rigged. Not only was the Tenderloin Housing Clinic – which operates 15 SROs and over 1500 units – considered only equally qualified in property management to an entity that has not leased a single all-supportive housing SRO, but this politically preferred entity was deemed superior in management to the Community Housing Partnership.

That’s right. HSA’s panel found that a nonprofit that has managed multiple buildings for formerly homeless and very low income tenants was less qualified to lease an SRO than an entity with no Tenderloin experience and that has never operated an SRO that exclusively served those needing supportive services.

Ironically, CHP got high marks for its property management under the Care not Cash RFQ in 2005 – but that was when HSA wanted multiple contractors to lease hotels. Now that HSA’s political agenda has changed, CHP is suddenly only minimally qualified to master lease a supportive housing SRO.

Fortunately, HSA will have to explain its approach to evaluating property management to Supervisor Campos and his colleagues. Because it sure looks like HSA ignores any factual basis – a clear sign of a rigged contract.

Secret Testimony?

Due to the Newsom Administration’s requiring RFPs and RFQs even for ongoing contracts where no alternative contractor has expressed interest, nonprofit leaders fear that going public will result in their agency’s loss of funds. One Director said I should identify them as “Cowardly Hypocrite” for privately expressing anger at rigged contracting processes but being unwilling to speak out publicly.

Hopefully, we have not reached the point in San Francisco where those with City contracts have to mimic organized crime figures forced to testify behind curtains with their voices scrambled. Mayor Newsom could even appreciate this contract rigging scandal getting the public limelight well before the June 2010 primary, and when there is still time to pass legislation that would show him responding quickly to solve the problem.

And as previously noted, this is a very easy problem to solve. Requiring the Legislative Analyst or another body independent of the mayor to vet criteria for contracts put out to bid is simply good government. As is eliminating decision making by often unqualified “outside” panels, and ensuring that all details of the winning proposal are available within the timeline for appeal.

No legislation can stop all political favoritism in the awarding of contracts. But the completely unregulated environment in which tens of millions of dollars are allocated each year in San Francisco invites cronyism, and ill-serves San Francisco taxpayers.

Randy Shaw is the editor of Beyond Chron and Executive Director of the Tenderloin Housing Clinic.