As City Begins New Towing Operations, Questions About Bid Linger
Council and Losing Bidder raised questions about City's towing bid process.
Here's a follow-up to yesterday's "Isn't it Weird" post about how the city's new towing operations, awarded to Lincoln Towing in a tortured request-for-proposals (bidding) process that ultimately bypassed the two top bids, are now causing headaches for the city (and for people trying to recover their cars in the South End, of course). It's a headache because, according to the city, Lincoln's Tukwila's South End lot isn't easily accessible by transit (which you sort of need when you don't have your car).
All of this is weird because the RFP explicitly stated that the lot be: "reasonably accessible to one or more public transit routes." One thing we glossed over in the initial story, though, was the tortured RFP process itself.
A little history: The city was trying to upgrade its towing operations with a more modern, comprehensive system (GPS technology, a coordinated fleet, and more accountability to the customers and the city).
City contracting department spokeswoman Katherine Schubert-Knapp explained: "The city believed a new comprehensive, single contract management approach would improve efficiency and customer response times. We also recognized that newer GPS technologies are now available in the marketplace today, which allows the use of systems that track tow trucks and dispatch equipment closest to the needed tow, a technology unavailable when the original approach of geographically limited tow zones was developed years ago."
Lincoln was previously one of two towing companies that contracted with the city; now, as of last week when the new system started, it's the only one.
One of the original competing bidders, San Francisco-based AutoReturn, seen as a leader in reforming the towing industry along the lines the city had in mind, was disqualified after outscoring Lincoln in the first RFP process when the city canceled that initial process. The city cancelled the process because it realized state law required the winning vendor to be an RTTO (a Registered Tow Truck Operator) in the state—and neither AutoReturn nor another high scorer, United Road Vehicle Management Solutions, met that requirement, according to the city.
A review of records, however, show that things weren't as black and white as the city said. For starters, while the city's second RFP addressed the state requirement that the winner be a licensed RTTO, the city also added a specific requirement of their own that wasn't required by state law—that the winner be an RTTO at the time of the bid. The RTTO prerequisite made things very difficult for AutoReturn, but they gave it their best effort before being rejected. (And it's interesting to note this discrepancy, the RFP simultaneously allowed contractors to meet the lot requirements "within 60 days from contract execution.")
In a May 16 protest letter to the city from Bernard Vogel, AutoReturn's attorney, after AutoReturn lost the April bid, he wrote, "AutoReturn was, and currently is, a Registered Tow Truck Operator in the state of Washington." The letter notes that after the city cancelled the first RFP and alerted all bidders that they had to be an RTTO at the time of the new bid (due April 23, 2013), AutoReturn purchased GT Towing, which had an RTTO license in Washington state.
Vogel wrote to Seattle's City Purchasing and Contracting Services that "AutoReturn ... acquired GT Towing on April 23, 2013, thereby acquiring GT Towing RTTO license #5287."
"I remain very concerned about a few issues. In reviewing the claims set forth by AutoReturn's legal counsel, the City of Seattle apparently engaged in a process that resulted in excluding the bidders with the two highest scores, which also happen to be out-of-state bidders, in favor of the incumbent local provider."—City Council Member Bruce HarrellAnd according to an April 16 email from the Washington State Patrol to AutoReturn—which was scrambling to re-do its bid—that should have sufficed. The email states: "AutoReturn can in fact purchase a tow company that currently is a corporation or LLC and have their names added (for [Department of Licensing] purposes)."
However, the city rejected this notion. In response to AutoReturn's letter, City Purchasing and Contracting Services Director Nancy Locke says the state Department of Licensing confirmed that AutoReturn was not an RTTO, adding: "Your protest aruges that the acquisition of GT Towing ... is the same as an RTTO license issued to AutoReturn. However, the bid submitted identified AutoReturn as the bidder. AutoReturn named GT Towing as a subcontractor."
AutoReturn did get an RTTO license in its own name on May 13, but that was too late.
Given that DOL told the city that AutoReturn didn't qualify, the city was technically right. However, the situation was evidently opaque enough for City Council member Bruce Harrell to send a June 20 letter to City Attorney Pete Holmes.
Harrell wrote: "I remain very concerned about a few issues. In reviewing the claims set forth by AutoReturn's legal counsel, the City of Seattle apparently engaged in a process that resulted in excluding the bidders with the two highest scores, which also happen to be out-of-state bidders, in favor of the incumbent local provider. It is my understanding that after the RFP process started ..., the City learned that [state law] required companies to hold a [RTTO] permit ... One of the parties took all reasonable steps to comply with this process and, notwithstanding their efforts, was still excluded."
Harrell went on to point out that federal law—the commerce clause of the U.S. Constitution—doesn't allow out-of-state bidders like AutoReturn to be treated unfairly. Moreover, he added: "I am concerned ... whether our actions are in fact consistent with our overall goal of bringing in a new, comprehensive single contract management approach. As Public Safety Chair and Vice Chair of our Transportation Committee, my goal is to create a vehicle impound system that uses the latest technology; can employ best practices relative to the consumer experience and municipality experience; and contract with an entity where we can gain the experiences of lessons learned."
Certainly, the fact that the City is now saying Lincoln's South End storage lot "lacked reasonable access" raises questions about the the consumer experience.
The towing contract bid and the city's new approach (it previously divided the city into zones for different contractors, rather than having one comprehensive system), was taking place in the context of concerns about steep towing rates and the city's court battle with local towing companies over city guidelines to bring rates down—an effort the city pushed at the state level.
In response to Harrell's letter, Holmes assured Harrell that the city didn't run afoul of federal guidelines, telling Harrell that "the RTTO statute doesn not distinguish on its face between in-state and out-of-state tow truck operators." Holmes also pointed out that AutoReturn was not a licensed RTTO at the time of the bid: "At the time that AutoReturn submitted its proposal ... it was not registered with the Washington State Department of Licensing as a Registered Tow Truck Operator."
I've called Lincoln and AutoReturn. AutoReturn chose not to comment.