Sunday, January 31, 2010

For once, I'm on the other side of the media ... and it's more exciting than it should be

A couple buildings in the South San Francisco Housing Authority.

Note: The following contains my own personal opinions and recollections and is in no way meant to represent the opinions of the South San Francisco Housing Authority, its Board of Commissioners or the City of South San Francisco.

I will be on TV during the Thursday night newscast on San Francisco's channel 7, and am not particularly thrilled about it.

In April of last year, I was appointed by the South San Francisco City Council to a term as commissioner on the city's Housing Authority (SSFHA). Now it might come as a surprise to some that South City even has public housing, but we do -- about 80 units in 37 buildings on a C Street cul de sac near South San Francisco High (map below).

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Like my involvement with SamTrans, where I am the chair of the Citizen's Advisory Committee, I take my duty as a housing commissioner seriously. It is a great way to give something back to the community and is just a step above volunteer work -- we are compensated with a mere $50 (taxable) per month for a job that usually involves about three or four hours work (including meetings, site visits, discussions with staff and residents, reading large agenda packets and the like), plus cookies at meetings. Cookies at meetings are important. The commissioners are tasked with, among other duties, approving regulations in the authority and (relevant in this case) approving contracts with outside companies for maintenance and the like. One contract approval last year has turned into an interesting spectacle, with one rejected contractor taking its disappointment to the media.

Last spring, the Housing Authority sent out a request for proposals to paint the exterior of the authority's 37 buildings, which had not been repainted for seven years. The job would be paid for using ARRA stimulus funds doled out by the US Dept. of Housing and Urban Development (HUD), which has oversight over public housing. We had about 22 bids -- 14 of which were deemed "noncompliant" due to one procedural misstep or another (that process in itself was difficult, as the minutes of our June meeting attest).

Ultimately, the Housing Authority's staff submitted eight bids to the Board for its review. The report the commissioners received from the staff did not include a recommendation about which contractor to select, but did include a notation that the Housing Authority wanted an "inexpensive but quality job" (paraphrased) and staff thusly recommended that the two highest and two lowest bids be rejected (kind of like when the highest and lowest judge's scores are thrown out in the Olympics, I guess).

"Now, wait a minute," you might be asking, "Aren't public agencies obliged to choose the lowest bid?" No. We are actually tasked with accepting the lowest responsible bid. This means that, besides price, public agencies are supposed to also consider all criteria associated with a bid, including experience, insurance, perceived ability to do the job, etc.

One bidder, Axios Painting of San Francisco (I feel comfortable naming them because the company has taken its case to the media), had the lowest of the eight bids submitted to the board, saying it could paint the buildings for a little over $72,000. Another contractor, Ljungquist Painting of Palo Alto, said it could do the job for about $97,700. The third-lowest bidder, Metro Structural Painting of South San Francisco, submitted a bid for $116,000.

I didn't quite buy the "throw out highest and lowest" logic in picking a responsible bidder, so I closely examined the two lowest bids. Axios, at the time, was a very new company. It DID NOT LIST A SINGLE REFERENCE in its bid and its insurance certificate was listed as "pending" in the bid packet. As a result, I did not consider it a complete bid. I wouldn't hire someone with no references or insurance to paint my home, so I certainly wouldn't hire it to paint the homes of 80 other families either.

(It should be noted that the director of the Housing Authority determined, using estimates of total man hours needed to complete the project, that Axios would not be able to pay what are called "Davis-Bacon Wages." Davis-Bacon wages are pay rates determined by the US Department of Labor to meet the prevailing wage rates in the area to be paid on federally paid-for construction projects. If the contractor the SSFHA picked did not pay Davis-Bacon wages, we ran the risk of not being reimbursed by HUD.)

Ljungquist had all the required references and paperwork in my opinion, and was $18,200 cheaper than the next-lowest bid. So I moved that Ljungquist be awarded the contract. As the minutes indicate, my motion died for a lack of a second. The other board members, so I gathered from the discussion, agreed with staff's recommendation that the lowest bids be rejected in search of a high-quality job. In addition, the SSFHA's procurement policy at the time had a provision that a "preference" be shown to South San Francisco contractors (that provision has since been removed at HUD's recommendation), so the it was moved that Metro Structural get the contract.

The Board voted unanimously to award Metro Structural its $116,000 bid. While I would have preferred Ljungquist get the contract, I did vote yes for Metro Structural after seeing that it had the rest of the Board's support. Sometimes, politically, it's better to present a united front. Besides, other that the price, Metro Structural did have a good bid with many references, including local schools.

Normally, the story would end there. The buildings would get painted and most folks would be happy. But the owner of Axios didn't take losing the bid lightly. He first complained in a letter to the SSFHA and attended the July board meeting, I guess to see what we do. He then took his protest to HUD, which bounced it back because we followed our then-current procurement policy -- but not before holding up our stimulus payment for several months, forcing the SSFHA to take money from its reserves to pay the painting bill.

Not satisfied, Axios took its case to KGO TV news in San Francisco, alleging we were wasting stimulus funds. Lo and behold, investigative reporter Dan Noyes and the "I-Team" were at our January board meeting. I recognized Dan immediately, becoming a fan after he did a story recently about alleged spending abuses by San Jose/Evergreen College District Chancellor Rosa Perez, whom I myself profiled a couple times, most recently in 2004 for The Spectrum Magazine when she was president of Cañada College.

I also knew why he was there, having dealt with the aftermath of this painting contract for months. Dan asked to speak with me on camera, and I agreed -- knowing from almost a decade's worth of reporting experience that silence speaks volumes. I wasn't quite prepared for the way Noyes asked the questions, but I did the best I could -- taking extra care to not once say "I don't know," probably the most incriminating thing a public official could say.

You'd think, having been on the other side of hundreds of interviews, that I'd have been comfortable giving one. But I could feel the slight nervous tick developing, could sense an inordinate amount of "uhs" coming from my mouth and uttered my words probably a whole octave higher than my usual speaking voice.

Was I nervous? Sure. But mostly I felt a bit of anger. Not at Dan Noyes, who was just doing his job. But at the circumstances. I felt we were being pilloried for rejecting an unqualified bid. If Axios had references and an insurance certificate, I would have been happy to move that the company get the contract. But now, it seems like sour grapes on Axios' part.

My only regret in this whole scenario (other than the stuttering interview that will probably be reduced to a few frames of me looking like I don't care about the public's money), is that I didn't push harder for Ljungquist to get the contract. I was new on the board at that time and a little hesitant to make enemies. I also may or may not instead have voted "No" in awarding Metro Structural the contract, but it was a fait accompli.

According to ads on channel 7, The I-Team story will run during the 6 p.m. newscast on Thursday, Feb. 4. Ironically, I'll be in my "Managing Budgets in the Public Sector" class at San Francisco State's downtown campus at the time. The ads seem to state that we misspent stimulus funds by "overpaying" 60 percent. Lovely. Again, I'd like to ask you folks if YOU'D pay an uninsured contractor with no references to paint YOUR house.

I'll post a quick reaction after the story airs.

(Update, Feb. 9, 2010: My response is up. A criticism of the above blog post from Axios is available at


Moné Peterson said...

You go, man. That sounds totally reasonable. Did you use the "I wouldn't pay an uninsured contractor to paint my own house let alone..." That's gold, Jerry.

John C. Baker said...

Naw, I thought of the "paint my own house" quote right as I was walking out of the meeting. I let out a big "shucks!" 'cause the camera crew was gone.