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Wednesday, April 19, 2017

The lowest what?

Bid awards are meant to go to the lowest responsive bid from a responsible bidder, right?

Lowest what?

Too often, the assumption, therefore the focus, is on price: the sticker price. Lowest price wins, right?

But from the phrase "sticker price", we also get the phrase "sticker shock".

Sticker shock is what County Officials are coming to terms with as they near completion of a new 22-story Superior Courts building in downtown San Diego, California. Here's the story from the San Diego Union Tribune:

COSTLY ADD-ON AT NEW COURTHOUSE
The new building downtown county courthouse, designed with 71 courtrooms, will consolidate operations at the 1960s-era downtown criminal courthouse on Broadway, Family Court on Cedar Street and the Madge Bradley Building on Ash Street. The 110 deputies and community services officers working at those three locations will be transferred to the new courthouse.

It will cost an extra $3.3 million a year in staffing to resolve security risks caused by the design of the $555 million downtown county courthouse set to open this summer, county officials say.

They point, in part, to a cost-cutting decision not to build a $25 million tunnel under Union Street that would have allowed deputies to escort inmates directly from the Central Jail to the new Superior Courts building.

“This design difference imposes a measurable and higher level of security costs,” said a 2016 report by Sheriff Bill Gore and Helen Robbins-Meyer, the county’s chief administrative officer.

The San Diego County Sheriff’s Department provides deputies and community services officers as security at the region’s courthouses. The department said it needed 33 more positions on top of the 110 originally planned in order to safely move prisoners in and out of the new 22-story building, and to respond to any courtroom emergencies.

The tunnel from Central Jail to the new courthouse was part of the original construction plan, and Keim said the sheriff continues working with state and local leaders to get it built.

Without the tunnel, the plan is to bus jail inmates two blocks to a controlled entryway at the courthouse called a sally-port. Gore says the buses require extra supervision, as do extra holding cells added to the courthouse design.

Gore’s report, submitted to the state Department of Finance, said the new courthouse’s high-rise configuration “significantly affects the ability of deputies to respond to security issues, dangerous incidents or emergencies.”

He noted that a 2015 study showed an average of 16 such incidents per week at the current courthouse.

There will be up to four criminal trial courtrooms on each of 11 floors in the new building. The sheriff wants roving deputies available to run up or down stairwells to assist courtroom bailiffs in any emergencies. Using an elevator might actually be slower if deputies on multiple floors stop it to get on board, the report says.

Other “rovers” would keep an eye on large public spaces, including the lobby and food court. More deputies also are needed to run the five weapons-screening stations at the entrance.

Two felony arraignment courtrooms pose added concerns: They are on the first floor near the exit doors. That proximity, the sheriff’s report says, “presents an increased security risk for a successful escape of in-custody prisoners charged with serious felony crimes.”

The sheriff has asked the state to cover the $3.3 million estimated annual cost of hiring 30 more deputies and community service officers, and three sergeants.

San Diego County spokesman Michael Workman said, “We need $3 million. If that doesn’t happen, we’ll have to determine what to do. It would probably have to come out of (the sheriff’s) budget.”
So, to save the upfront price to construct the tunnel by $25 million in fixed today's dollars, the taxpayers (of either the State of the County) will have to shell out over $3 million a year in servicing expenses, which tend to escalate over time -- for the lifetime of the complex.

Such a deal to get a lower bid price! In just eight years that $25 Million up front price will look a bargain, but the court will be doing 8 years to life (cycle).

This is an example of contemplating bid prices on sticker prices. That is not the model used, however, in the ABA Model Procurement Code, nor the Guam procurement law and regulations, which are founded on the ABA Model Code.

Whatever the colloquial use of "lowest price" may describe the Model law and regulation require a more holistic analysis. It requires "bids will be evaluated to determine which bidder offers the lowest cost". Moreover, "Only objectively measurable criteria which are set forth in the Invitation for Bids shall be applied in determining the lowest bidder. Examples of such criteria include, but are not limited to, transportation cost, and ownership or life cycle cost formulas." (See, Guam regulation 2 GAR 3109(n)(4))

Nobody likes sticker shock. In a $555 million procurement, that is a rookie mistake.

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