HomeMy WebLinkAboutCOM 0041.001 1996-1998
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Environmental Recycling 8~ Refuse Disposal ~ C_ r r.
P.O. Box 5294, Hilo, HI 96720; Phon^ & Fax (808) 935-9328
J7 Jfll~ 7 ~lf`I 10 `I r
State Department of Attomey General ; ~E,,;,
Attomey General Margery Brouster „ ~ F ~ _
~JOUtlT! ..t N_.;,~ It
425 Queen Street, Honolulu, HI 96813
Re: County of Hawaii Glass Recycling Contract Protest; Terminate Contract 96112
- RFP 1533
- Consultant Services Contract No. 96112
Environmental Recycling opposes Contract 96112 that evolved out of RFP 1533.
Dear Attomey General Margery Brouster,
I am asking your office to please look into what I believe to be a misappropriation of
State tax money. The overriding concern that I feel as a prospective bidder deals with
the problems of establishing an even playing field with respect to the establishment of a
Glass Recycling Program for the County of Hawaii. The County of Hawaii without going
through proper competitive bidding process violated laws by not disGosing to
perspective bidders in RFP 1533 that State funding was available.
The County of Hawaii issued RFP 1533 on November 28, 1994. In that RFP there was
no mention that State monies were available specifically for a County of Hawaii Glass
Recycling Program. The RFP mentioned that State monies were available for
Residential Used Motor Oif Program and Household Hazardous Waste Program. As a
perspective bidder I was not made aware of, nor was any other business made aware of
the availability of State monies earmarked specifically for a Glass Recycling Program.
The County contracted with Recycling Systems of Hawaii (RSH) under Contract 96112
which evolved out of RFP 1533 to develop and implement glass recycling on the Big
Island. RSH was awarded the State's substantial sum of $216,000 because they
submitted a glass recycling proposal under RFP 1533 on January 5, 1995, eventhough
the State did not start to collect the tax fund until June 1, 1995, six months later.
What the County did was use RSH's RFP glass proposal in January 95' as the
County's `scope of service' in order to obtain a contract with the State
Department of Health Office of Solid Waste Management on September 1, 1995 in
order to receive 5216,000.
Not only did the County fail to inform perspective bidders that $216,000 was available,
they also failed to inform perspective bidders in the RFP of State guidelines, of which,
also allowed the $216,000 to be spent on equipment, transportation, supplies, labor and
appurtenances. This dramatically changes any perspective bidders proposal on how to
best structure their proposal for a competitive bid. In essence there was absolutely no
competitive bid, because no one was informed of the State money available, except
F;~~ No. FNC/op/Z
Rel. Tbt Presenfe.+ F
i3et, llate JAN ~7 1997
ER Complaint - Misappropriation of State Glass Container Tax Page 2
RSH who had inside information through their work on the 93' & 94' Senate
Environmental Summit Hearing.
Briefly, the State of Hawaii took over management of the nearly six year old City and
County of Honolulu Glass Container Recycling Tax in June of 1994, " to ensure the
health, safety and welfare of the citizens of the State and preserve our limited natural
resources," by enacting Act 201, 1994 HSL S.B. No. 2170. At that time only the Island
of Oahu developed the glass importer/manufacturer tax to encourage glass recycling.
Also in 1994 the State looked forward to expanding glass recycling to the outer islands,
planning to collect a glass container tax for all glass containers imported to the outer
islands in October 1994. According to private governmental plans the tax money would
be collected and then allocated to the outer island Counties in January of 1995.
However, the State Office of Solid Waste Management did not start collecting the outer
island monies for the Big Island until June 1995, a full nine months later.
The County of Hawaii looked forward to the State of Hawaii funding designated
specifically for a County of Hawaii Glass Recycling Program as early as October 94'.
County of Hawaii, Public Works Department Chief Engineer Donna Kiyosaki and
Department of Finance Director Harry Takahashi both had knowledge of the upcoming
funding and the general defacto population funding amount prior to the January 5, 1995
submittal date for RFP 1533. The State Department of Health, Office of Solid Waste
Management Coordinator John Harder was in contact with the County of Hawaii since
June of 1994 and indicated that their office would start to collect State glass container
import and in-state manufacture tax designated for the County of Hawaii in the final
quarter of 94', beginning October 1, 1994.
The County of Hawaii Administration under the guidance of Mayor Steven Yamashiro
accepted $216,000 from the State of Hawaii to institute a Glass Recycling Program in
September 1, 1996, a full nine months after RFP 1533 January submittal date.
The violation is that these funds were not disclosed to the general public or
business' by the County of Hawaii Administration. The County of Hawaii County
Council was not, as far as I am aware, made aware of the State funding established by
Senate bill 2170. The $216,000 was never announced nor made public. The County of
Hawaii Administration decided not to disclose these anticipated State funds and instead
allocate the funds to a Hilo recycling company that coincidentally entered an non-
specific RFP 1533 with a proposal for glass recycling in January 5, 1995. The
County's awardee Recycling Systems of Hawaii also had internal governmental
knowledge of the State funds. Environmental Recycling believes it was and is
necessary for the County of Hawaii Administration to not only disclose the funds,
but also to develop an advisory committee to discuss with the general public and
ER Complaint - Missappropriation of State Glass Container Tax Page 3
businesses that $216,000 has been allocated to the County by the State every
year from 1995 tit the year 2000. The total five year amount equals $1,080,000.
Environmental Recycling discovered what our company believes to be a
misappropriation of funds. The County failed to distribute State funds as directed under
HRS Chapters 103 and 103D. Chapter 103D-303, Competitive sealed proposals, "a
contract may be entered into by competitive sealed proposals," is required by the State
when the County distributes, "specified types of goods and services." Through my own
investigation of facts that developed as early as September 4, 1995 to the present, I
realized that the County failed to tell anyone of the special State funds. Throughout this
time I teamed, as best I could, how County of Hawaii Consultant Services Contract
96112 evolved out of RFP 1533 and how our company could protest the
misappropriated funds according to County of Hawaii procurement laws.
Environmental Recycling protested RFP 1533 and Contract 96112 on November 16, 95.
The County denied our protest. County Finance Director Mr. Takahashi stated in his
'protest denial' letter directed to Environmental Recycling dated November 21, 1995
that, "the County requests proposals in anticipation of funds". The County of Hawaii
knew the approximate funds to be awarded by the State as did the company contract
awardee Recycling Systems of Hawaii, Inc. Rather than the County disclosing the
State funding publicly the County worked secrectly and solely with Recycling
Systems to secure the funding in order to meet certain State Office of Solid Waste
Management requirements. The County's failure to disclose the State funding reflects a
lack of fair competition and the possibility of collusion on the part of all parties
involved to undermine a fair bidding process. RFP 1533 (proposal page 4) states, "and
no official or employee of the government is directly or indirectly interested in the
proposal or in any portion of the profits thereof," and S.B. NO. 2170 Chapter 342G-H
Penalties, "Any person who violates any provision of this part, or any rule adopted
thereunder."
The County of Hawaii Administrative officials failed to discose the State funding in the
RFP 1533 required in Public Property, Contracting procurement code (Competitive
sealed proposals) 103D-303(a), stating, "for the procurement of specified types of
services". Stated clearly in 103D-303(e) the RFP shall, "state the relative importance of
price and other evaluation factors". The State knew generally the basic funding amount
and the State disclosed the amount to outer-island Counties in 1994. Further, in order
to receive the State funding each County would be required to follow specific State
Office of Solid Waste Management requirements and guidelines. RFP 1533 failed to
acknowledge either the 'price or evaluation factors', nor the State requirements and
guidelines.
Further, the County was required to submit to the State Office of Solid Waste
ER Complaint - Missappropnation of State Glass Container Tax Page 4
Management a Scope of barvices for a Glass Recycling Program in order for ti ~e County
of Hawaii to receive the State funds . Without the Scope of Services submitted to the
State the County of Hawaii would not be able to contract with the State for specific
funding. The County of Hawaii with knowledge that a Scope of Services would have to
be established erred by not including that Scope of Service guidelines in RFP 1533.
The fact is that no contract for glass recycling and no availability of funds would be
complete without that Scope of Service induded in the Contract 96112 generated from
RFP 1533. The County used Recycling Systems of Hawaii RFP proposal as the Scope
of Service to secure State monies.
The County and Recyding Systems together were looking forward to the State funds to
arrive in January 1995. Recyding Systems of Hawaii proposed the necessary glass
recycling program to secure State funds under the non-specific category of `other'
in RFP 1533. The County and Recycling Systems plan was to collect the State tax for
one quarter (Oct. thru Dec. 94') and the County would award the money for RFP 1533
(submittal date of January 5, 1995) to Recyding Systems.
However, the State did not start to collect the tax until June 1, 1995, six months after
the RFP deadline and nine months from the State's earlier proposed starting date, as
well as, Contract 96112 was signed eleven months after the January 95' RFP deadline,
on November 3, 95. Procurement Code 103D-309 states that the contract is not
binding unless funds are available. Further, stated in RFP 1533 (proposal page 3) the
programs would be initiated, "beginning approximately February 1, 1995" and on
(specification page 10), "The County's implementation date is on or about February 1,
1995". Contract 96112 was signed on November 3, 1995, because funds anticipated in
January were not available. This is important because it further proves that either
both parties were in direct knowledge of the availability of x216,000 at the original
contract date of January/February 1995 or the contract amounts were left open
until the actual contract date of November 3, 1995, which would point to the fact
that the County and Recycling Systems of Hawaii were actually entering into an
agreement prior to the availability of funds or knowledge thereof.
RFP 1533 (proposal page 3) states very clearly, "The undersigned (Bidder or
perspective bidder) hereby proposes to furnish and pay all necessary labor,
equipment, transportation, supplies, and all other actual or implied expenses
connected thereto to provide contract services". In other words the County will not pay
for the purchase or leasing of equipment or supplies and transportation. Plus, the
County will not pay for labor to pertorm the necessary duties. The bidder must supply
any equipment...etc. and Tabor. For example If a perspective bidder wanted to recycle
baby diapers, than the bidder will have to pay for their own truck and the labor to drive it
and the equipment to process the diapers...etc.
ER Complaint - Missappropriation of State Glass Container Tax Page 5
Because the County failed to acknowledge the State guidelines as prescribed under Act
201 S.B. 2170 all perspective bidders would did not have knowledge that Act 201
allowed for monies for labor, equipment, transportation,supplies...etc. in their bid.
Because RSH had inside information their proposal included monies for said items.
However, Mr. Takahasi declared he can dramatically change the original RFP contract
specifications by stating in his denial letter to Environmental Recycling, 'that the
proposals will be liberally evaluated". RFP 1533 (Proposal page 1) already stated, "the
County will evaluate proposals liberally". Mr. Takahashi incorrectly defines this
statement in the RFP. He reverses the original wording from, "evaluate proposals
liberally" to "liberally evaluated." To "evaluate liberally" means if a perspective bidder
wanted to recycle nails or baby diapers, the County would consider their proposals
liberally, evaluating whether or not to the County with its own money would invest in that
particular proposal. I do not believe the 'liberally' language meaning should be changed.
However, the County was using State monies, not their own, therefore they could not
hide the State funding in anon-specific RFP, and then misuse their powers by failing to
disclose for competitive bid the State funding. The County did not disclose in the RFP
prior to the RFP submittal date January 5, 95 that the State funding was available and
that the County of Hawaii must comply with the requirements of Act 201, 1994 HSL S.B.
No. 2170. The County changed the rules of the RFP specifications for Recycling
Systems, because the County was enamored by Recycling Systems involvement in the
93'-94' State Senate Environmental Summit Hearings and their personal contact with
certain State officials, of which both helped to secure monies for the Big Island politics.
The State and the County pushed this funding through and earmarked it for Recycling
Systems.
The County of Hawaii Director of Finance oes not reserve the right to deviate from
the RFP 1533 original specifications. There are major differences between RFP 1533
and Contract 96112 that greatly changes the perspective bidders understanding of the
RFP. In Contract 96112 nearly the entire $216,000 award to Recycling Systems of
Hawaii will be spent on exactly what the RFP Geariy stated it could not be spent on;
equipment ($101,440), transportation ($20,300), supplies ($3,692), and labor
($80,527). Only advertising and public education ($10,041) fell directly into the RFP
specification . All prospective bidders should have been aware that the County was
receiving funds through Act 201, S.B. 2170. Language within this Act changes the
perspective bidders understanding of the specifications and scope of the RFP.
Knowledge of the Act also meant knowledge of funds available for equipment, labor,
supplies and transportation.
If the County had as one of its goals that the idea of setting up a business with all the
amenities it would take to perform a certain function than that fact should have been
made perfectly clear. As the RFP stated however, it was the specific interest of the
ER Complaint - Missappropriation of State Glass Container Tax Page 6
County to entertain proposals from perspective bidders that were already set up w~:h
those amenities to perform certain functions requested. The money that was to be
made available should have been paid out as an award for providing those functions,
not as a prepayment for amenities with no incentive for performing the intended
functions or performance standards. In other words, the County will buy the perspective
bidder a business and what they do with it is up to them.
The County of Hawaii also set up the possibility for Contract 96112 to be renewed for
two more years at the option of the County. (Special provisions page 1, item 2) The
duration of the contract," is effective for a period of one year...renewal annually for two
additional one year periods at option of the County". Renewal prospects increase for
Recycling Systems of Hawaii due to the lopsided advantages created by RFP 1533 and
reflected in Contract 96112. The County is using the State funds to set up one
business in glass n3cyciing without going through a proper bidding process.
With the liberal changes discussed above that business (Recycling System) avoids afl
costly start up expenses. This company will have an unfair advantage over others that
will have to pay for their own start up costs. This severely handicaps the rest of the
industry and damages any opportunities the County envisions for comprehensive glass
recycling programs. One industry, one business serve no useful purpose towards the
intended end which is maximization of effort and opportunity.
Further, the glass tax is to pay for glass containers from the general public. The budget
in Contract 96112 spends all of the $216,000 on what is listed above, so where will the
money come from to buy the glass. The County stated in their protest `denial' letter to
Environmental Recycling, "the recipients of the recyGing funds are not able to receive
diversion grants", which was $40 for glass on the Big Island. The State Glass Tax is to
be specifically spent on buying glass from the public. So where is the money coming
from if all of the Recycling Systems budget is already spent?
Unfortuately, the awardee Recycling Systems of Hawaii recently was given the go ahead
to spend the State tax even though Environmental Recycling and Big Island Recycle and
Rubbish attempted to terminate the contract and develop a fair and equitable Big Island
island-wide glass recycling program.
At first Recycling Systems was not going to pay anything for the glass, but because of
our continued pressure they now pay up to $40 per ton for glass containers, however
Recycling Systems has set up a major bottleneck for the general public to participate.
The company will accept a minimum of 200 pounds of glass from registered groups and
vendors only and they must have proof of auto insurance before they enter their facility
as well as sign a form to release Recycling Systems harmless from any accidents that
may occur on their property (RSH requirements enclosed).
ER Complaint -Misappropriation of State Glass Container Tax Page 7
The entire glass recycling program is a sham and a ruse. That is why more questions
are raised than answered.
'The Recycle System's glass recycling program is accepting glass from
the general public but they were not paying for it. Is this a violation of the
State Glass Recycling program?
"And again where is the money coming from to pay for the glass since the
entire State tax monies designated for general public buy back is to be
spent on equipment, labor, transportation...etc, and Recycling Systems
cannot double dip into the County of Hawaii diversion grants program,
according to Director of Finance Harty Takahashi?
`Could it be that Recycing Systems is buying their own equipment.
Equipment they already had in their possession and were using in their
business operations, thus giving them a windfall of capital to use to buy
other pertinent provisions and develop their facility.
'Further, Recycing Systems of Hawaii's recycling facility is on Hawaiian
Homestead Lands residential and agricutural land and they pay only $1
(one dollar) per year, while other recycling businesses are required by law
to be located on County industrially zoned land, paying around $31,000
per year to rent space. County zoning codes considers a recycling
business as 'general industrial'.
'Did the State give Recycling Systems a health permit to operate an
industrial business on Hawaiian Homestead Lands? If so, how and who at
the State Department of Health issued the permit? Recycling Systems
does not produce any agricultural commodity as prescribed by the
Hawaiian Homes Commission; they don't farm; instead, they run several
garbage businesses and a recycling business on the land, violating
homestead commission policy.
Environmental Recycling's intent is to insure that the people of this island have the best
opportunities for recycling programs possible. To establish fairness and equity with
respect to involvement of all possible recycling businesses that would wish to partake in
both glass wllection and processing for the purpose of glass recyGing.
It is with that in mind that we steadfastly oppose the issuing of Contract 96112. We will
continually pursue more appropriate means for the formulation of the Big Island's glass
recycling programs. Our aim is to terminate Contract 96112.
ER Complaint -Misappropriation of State Glass Container Tax Page 8
AND FINALLY, to further support my protest reasoning the State of Hawaii Department
of Health Office of Solid Waste Management is giving the County of Hawaii another
$216,000. On June 23, 1996 the County of Hawaii Department of Public Works issued
a REQUEST FOR PROPOSAL NO: S-3316 for the Development and Implementation
of a Glass Recycling Program. So why didn't the County issue tha same kind of
RFP in 1995???? Now RSH has an unfair competitive advantage over other bidders
for the upcoming RFP.
Therefore, again, on July ~11, 1996 I met with and wrote a letter to the County of Hawaii
Mayor Stephen Yamashiro. He requested and assured me that if I write down my
concerns and limitation surrounding RFP S-3316 that he would get right back to me.
However, it is now July 18, 1996 and he did not get back to me right away. I had to call
his office on July 18 to set up an appointment for Monday July 22, 1996 at 3p.m. The
deadline for RFP S-3316 is July 24, 1996. I have asked for a postponement of RFP S-
3316 until there is a resolve in this ongoing dispute.
I had hoped to resolve this issue with the County, however, it appears they are not
interested in having anyone review the legalities of their actions. I did not intend to
contact your office so late in the proceedings. Would you please look into my complaint.
Sincerely,
Michael J. Allen
Enclosed:
Exhibit "A": Time Line
Exhibit "B": Recycling Systems Glass Buy Back Program Requirements
Exhibit "C": Letter to Mayor Yamashiro
Time Line
June 1993
Senate Environmental Summit Hearings
June 1994
State takes over management of the City & County of Honolulu Glass Container
Recovery Tax program and prepares to expand it to Counties on outer islands.
October -December 1984
State had planned to start collecting the tax between these dates and give the money to
the County of Hawaii on January 1995. However. the State did not collect the tax at
this time. They waited until June 1995 to start to collect the tax.
January 1995
County of Hawaii RFP 1533 submittal date.
June -August 1995
State at this time collects outer island glass tax for County of Hawaii.
September 1995
State of Hawaii contracts with County of Hawaii for $216,000 specifically for a Glass
Recycling Program.
October 1995
Through persistence since September ER on October 27th Donna Kiyosaki informs ER
that the State monies were awarded to Recycling Systems.
November 1995
On November 6th Mayor Yamashiro met with ER and stated, "I do not know anything
about a glass recycling program".
On November 16th Environmental Recycing protested County of Hawaii Contract 96112
that evolved out of RFP 1533.
December 1995
Environmental Recycling requested a formal contested case hearing with the State
Department of Commerce and Consumer Affairs (DCCA).
The DCCA determined that Environmental Recycling was two days late in filing with the
DCCA, therefore the ER protest case was never heard.
February 199
Yamashiro stated at Kona meeting, °1 never read Contract 96112 when 1 signed it. I left
the details up to Donna Kiyosaki."
ENVIRONMENTAL RECYCLING OF HAWAl1,Ltd
P.O. Box 5294, Hilo, H196720 Phone ~ Fax: 935-9328
County of Hawaii
County Council
Dear Council Member,
Attached you'll find a copy of our written protest concerning Contract 96112 that resulted
from RFP 1533 to establish glass recycling program.
Our intent is to insure that the people of this island have the best opportunities for
recycling programs possible. In addition, we want fairness and equity wRh respect to
involvement of all possible recycling businesses that would wish to partake in both glass
collection and processing for the purposes of glass recycling.
It is with that in mind that we steadfastly oppose the issuing of Contract 96112. We will
continually pursue more appropriate means for the formulation of the Big Island's glass
recycling programs.
Sincerely,
-~~~ll~~~~%~
M' hael Allen
President
~Q...~ _ ~ _
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Environmental Recycling of Hawaii, Ltd. 7 ~ Cu~u^.~.Y ~ C~e
P.O. Bo: 5294, ftilo, HI 96720 Phone & Faa: (808 328 ~ ~ ,l
i
County of Hawaii, Department of Finance
Mr. Harry A. Takahashi, Chief Procurement Officer
25 Aupuni Street, Room 118 P
Hilo, Hawaii 96720-4252 `
Phone: 961-8234
Fax: 961-8248
Re: Contract PROTEST Denial:
- RFP 1533
-Contract No. 96112
Environmental Recycling would like to request a formal contested case
hearing for RFP 1533 and Contract No. 96112.
Environmental Recycling of Hawaii and its representatives would ask you to accept this written
protest with respect to Consultant Services Contract No. 96112, dated November 3, 1995 with
project title, "Development of a Glass Recycling Progtam." This particular contract evolved
from an RFP No. 1533 titled, "Proposal and Specifications for Contract Services Related to
Recycling Programs and Activities for the Department of Public Works, County of Hawaii."
This written PROTEST is based on the following criteria:
I. RFP Solicitation
I. Funding
A. We believe that the County of Hawaii should not request proposals and then accept those
proposals if specific monies are not immediately available for a proposed project.
B. If the County is aware of specific funds that are earmarked for specific uses, those funds
should be clearly stated or made public knowledge so that all prospective bidders have fair and
equitable understanding of what is asked for and available by the County.
C. No where in the bid specifications for RFP No. 1533 does it make mention of a specific
glass recycling program, any specific budget amounts for the probTam or the fact that any
proposal would be solely used as the County's scope of service to the negotiated contract with
the State of Hawaii for specific funding for the States dispersement of the County's defacto share
of the State's glass container tax fund.
D. The original RFP 1533 states that "the contractor shall furnish all necessary labor,
equipment, transportation and supplies related to recycling programs and activities for the
County of Hawaii for a one year period." The scope of the RFP changes dramatically when the
County makes funds available for acquisition of equipment, labor and supplies. This fact should
have been clearly stated in RFP 1533.
PROTEST DENLAL: Request Formal Contested Case Hearing page 2
E. In addition Contract 96112 calls for two one year options. There is no stated levels of
performance for these option years with regards to payment or a defined criteria for which
renewal would be established. This makes it highly unlikely that the merits of this contract are
being critically assessed. If the same funding is available in "potential" years two and three, the
County has virtually committed $648,000.00 to one contractor without going through a proper
bid process.
II. Cottflict of Interest
1. Invested Interest
A. The County has exhibited a vested interest in establishing a contract agreement with the
proposed contractor. Because the State contract under which the Cotmty will receive funds has a
deadline of June 30, 1996, the County must establish afast-track approach to spend these funds
or the funds will be returned to the State. The County developed a vested interest over-and-
beyond the normal by not focusing on a clear and definite path for establishing a comprehensive
and equitable glass recycling program prior to its actual signing of the State agreement.
Therefore, they must commit themselves to a single contractor in order to ensure the monies are
encumbered even though it is clearly not in the best interest of the community.
2. Time line
A. RFP 1533 calls for the proposed scope of work for the contracted services to be provided
from 2-I-95 to 1-31-96 on proposal page 3. On specifications page 10 it states the
implementation schedule date is "on or about February 1, 1995." On special provision page
the Contract "shall be effective for a period of one year beginning January 1, 1995. Because the
County of Hawaii did not have the funds in hand in order to proceed with the contract in
question, it should not have accepted this proposal or the RFP should have specifically clarified
the funds the County anticipated and when they would be made available for this RFP.
3. Double Dipping
A. Contract 961 ]2 does not specifically establish b~rotutd work for the buy-back program.
Nor has an incentive fee's specific dollar amount for the glass collection been established. This
further puts all perspective outside collection of glass at a financial disadvantage. Collection of
glass under this contract only establishes financial benefits for the contractor. Furthermore, no
mention is made of excluding the contractor from also partaking in the County's Diversion
Grants Program. By allowing double-dipping it also depletes funds set aside for others to
establish their own recycling program.
It is the County's intention to terminate the Diversion Grants Program as of August 1,
1996. This along with the notice that State money was available should have been specifically
mentioned in a glass recycling RFP in order for each prospective recycler to have an opportunity
to respond to the future needs of the Counn• with respect to glass recycling.
RI. County's Best Interest
1. The best interests of the County should be an over-riding inlluence in establishing Cuunty
contracts whether through the [FB or RFP processes. It is clearly not in the best interests of the
County to establish through an RFP a community based recycling protgam where competition of
PROTEST DENIAL: Request Formal Contested Case Hearing page 3
costs will not have a considerable be riag on the selection of a contractor. The merits of
recycling are based on the diversion it ctrztes which saves the County landfill disposal costs. By
not competitively controlling the costs of diversion, the County may be creating costs which are
actually greater than the costs it wishes to avoid.
"The goals and objectives" section of Contract 96112 cleazly states that the contractor
hones to achieve 25% glass diversion by the end of the second yeaz. If this goal is achieved, the
County will save $119,451.00 for the initial two years. Unfortunately, the cost of the contracted
program will be $432,000.00 for that same period.
The fact that this can happen is the result of how the RFP process, and County's
unwillingness to make all facts known, can work against the best interests of the County.
IV. Restriction of Fairness
1. Fairness Issues
A. By executing contract No. 96112, the County puts all other entities at a severe
disadvantage for all present and future glass recycling service opportunities, which could be put
out for competitive bid by the County of Hawaii. Contract No. 96112 provides for one business
entity to be the sole beneficiary of critical glass recycling equipment paid for with County funds
received through the State of Hawaii. It also creates for the County a vested interest in the
contractor because the contractor is in possession of Cottnty paid for equipment that the Count}•
needs to ensure it has a fair amount of services received from the contractor in return.
2. No Incentive
A. Contract No. 96112 creates no incentive for performance. In the first year the contractor
receives $216,000.00 worth of benefits and the County is guaranteed nothing in return. The
contract only gives extrapolated data and a vague list of goals they h~ to achieve. [n the
meantime they aze receiving in full the first year all monies set aside for glass recycling at the
exclusion of all other efforts that could be undertaken. There is no incentive for the general
public to take part in any of the programs by setting up a comprehensive buy-back probKam
which is the central part of all recycling programs. These facts aze clearly not in the interest of
the County or the community.
3. Selective Input
A. By not clarifying the RFP with specific requests for input on establishing a County based
glass recycling program, the County eliminated all other available input on establishing a
comprehensive recycling prol,~ram that would maximize diversion.
4. Circumventing IFB
A. it is clear from the time line created by RFP 1533 and Contract 961 12 and the language
contained in both RFP and the negotiated a~~reement for services behveen the State of Hawaii
and the County of Hawaii that RFP 1533 was exclusively used by both the State and the Count}'
in establishing the scope of services for the State contract. The contract between the State and
County was executed on 9-1-95. The County then subcontracted on I 1-3-95 with Recycling
PROTEST DENIAL: Request Formal Contested Case Hearing page 4
Systems to carry out the scope of service. This subcontract should have been piactd out for
competitive bid which would have resulted in the defined scope of work being carried out
for the lowest price. The RFP should have been limited to defining the goals and objectives to
be performed by the County for the State which is why the subject of Contract 96112 is
"Consultant Services." Once the scope of services was defined those services now should have
been bid fairly by any interested and qualified entity.
B. The County of Hawaii grossly erred in not making it public knowledge that they were
selecting input in establishing a "scope of services" to be performed under their contract with the
State of Hawaii. By hiding this request in a vague and undefined "catch-all" RFP the County
exhibited a very real intention to create a particular situation where one contractor could flourish
at the expense of all others. The County's hiding of the true goals of the RFP was enhanced by
not making public the State funding for which this RFP critically depends.
It should not have been assumed by the County that all prospective bidders would have
the knowledge of the availability of State money or the intentions of the County to formulate
their scope of services for the State contract from this RFP.
Once the County accepted the RFP and before any contractual relationship was
established with the bidder all information pertinent to the availability of State funds was hidden
by the County and became our knowledge only after the fact through intense investigation. The
County offered no time table on availability of the States funds or how much was to be available
to the County. These facts point to a concerted effort to limit public knowledge and fairness of
opportunity.
Conclusion:
It is the intent of Environmental Recycling by filing this grievance to have Contract 96112
rescinded. Our hope is that the County will quickly reevaluate its game plan for glass recycling
and offer fair and equal opportunities for ail to participate in. Comprehensive and effective glass
recycling can be established, but only if the County creates an even playing field.
Resourcefully yours,
Michael J. Allen
President
Environmental Recycling of Hawaii, Ltd.
cc: Office of Administrative Hearings, Department of Commerce and Consumer Affairs