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TDS, city joust over MRF disqualification

Thursday, May 27, 2010 by Michael Kanin

On Wednesday morning, city staff and representatives from Texas Disposal Systems (TDS) finally met for a complete version of the appeal hearing concerning the company’s disqualification from the city’s ongoing Materials Recovery Facility (MRF) request for proposal (RFP) process (see In Fact Daily, Jan. 29; Feb. 10). The event came after nearly five months of dueling memoranda and interpretations of fact about various details associated with the case. The company has had a long-running dispute with the city over its disqualification.


Hearing officer Stephen Webb and the interested parties focused on three major questions: whether TDS should be considered a respondent to the MRF RFP; whether TDS’ bid to amend its existing contract with the city to include options for a MRF should be considered as analogous to the RFP responses submitted by seven other firms; and whether an email sent by TDS CEO Bob Gregory was subjected to an overly broad reading of the city’s anti-lobbying statute (see In Fact Daily, Jan. 29).


For its part, TDS emphasized its concern about the potential negative results of having a violation of the anti-lobbying ordinance on its record. With one mark against it, the company could be restricted from doing business with the city for up to three years if it received another violation before 2013.


However, there were larger issues. These start with the city’s determination that a TDS-proposed contract amendment delivered to the city just after the official close of the RFP process was, in actuality, a response to that RFP. Assistant City Attorney Robin Sanders said, “I’m reminded of the ‘walks and talks and quacks like a duck’ thing.”


Throughout the hearing, TDS’ attorney James Hemphill of Graves, Dougherty, Hearon, and Moody, disputed that argument. Hemphill maintained that the company’s contract amendment was intended as just that and that the city’s negotiations with rival recycling firm Greenstar on a contract extension (see In Fact Daily, March 23) proved that such an effort could be conducted outside of the RFP process.


The First Amendment is also in play. Though Hemphill was specific in not asking Webb for a finding along those lines, he noted, “A broad interpretation of this ordinance might raise First Amendment issues.”


To that, Sanders responded, “It is our position … that TDS or any individual is absolutely entitled to express themselves relative to issues, but they are not entitled to do both that and be responders to an RFP.”


As the sides presented their cases, a fuller reading of what might happen should the City Council throw out the MRF RFP process was also revealed. According to Sanders, the city has determined that it is not required by law to award the MRF via an RFP process. That brings up the possibility, however slight, that Council members could vote to summarily dismiss the current RFP and award the contract to the firm of its choosing, including TDS.


If taken, that action would likely lead to litigation from one or more of the RFP respondents. Three finalists for the current MRF bid were announced at the May 13 City Council meeting (see In Fact Daily, May 14). A representative from each of those firms — Balcones Recycling, Waste Management/Resource America, and Allied Waste — was present for TDS’ hearing.


Alternately, if they were dissatisfied with the results of the current RFP, but wanted to continue with that form of process, the Council could vote to start the process over. But, if TDS remains disqualified from the MRF RFP after Webb’s ruling, they would remain unable to bid, even if the process were restarted.


Some form of decision is expected at the Council’s June 10 meeting. Webb’s findings are expected next week.

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