TU* takes a look at the Cohasset Water RFP 3.09.2012

*Tinytown Unleashed

Tinytown Unleashed’s RFP expert has issued his first report on Cohasset Water’s RFP…with more to come.

Our expert says: 

I’m just getting into it now, but here are a couple of questions that pop up right away.

Funny-looking dates:

1. The description of the Town’s water system includes Neptune water meters with touch-pad readers dating back to 1997. The RFP for this equipment came out in 1993 and was the subject of our initial eye-opener re Cohasset water dept. practices. I recall having someone come to our house to install one of these meters with a touch-pad by the kitchen door in 1994. Twenty-three years is a long time to go between meter change-outs (meters read less and less if the water  volumes  that go through them as they age) and the reading equipment is both technically obsolete and labor intensive (i.e. expensive) to operate for purposes of collecting meter data. Is this just a typo or is someone trying to set this deal up to have a built-in multimillion dollar change order after the contact is awarded, while shifting enhanced net revenues from water operations from the Town’s income statement (a meter change-out would almost certainly more than pay for itself) to a corporation’s bottom line by overstating the contractor’s “performance?” Inquiring minds want to know!

2. Was the RFP really available on Feb. 27 or is somebody trying to artificially shorten the time an unwanted competitor to company X (Aquarion) has to write and submit a proposal? One classic way to signal arm’s-length proposals from legitimate competitors that a deal is “wired” and not to bother is to make it hard to find and obtain an RFP on time.

3. Was there really a pre-bid conference on March 7? If so, who attended.

Bonding requirement: I will get into the details of the RFP in a good bit more detail later today and over the weekend, but turnkey public-private partnership arrangements like this one are notoriously difficult to find bonding for. If the whole shebang has to be bonded, that will make it very difficult for any competitor to qualify and very expensive if the winning respondent ends up having to go to Lloyd’s or put a bunch of the firms capital into some kind of escrow arrangement. In any event, the cost of bonding has to be passed through to Cohasset rate payers. We like contra for bonds, but they are mainly used for construction and, in some cases, to assure that equipment shows up on time and in good order.

Contractor acting as escrow agent for revenues to be used for Cohasset bond payments: why is this money (for that matter all revenues) not going into a lock box under control of the Town, with an agreed-upon draw procedure for the contact or once deposits to the principal and interest a counts for the Town’s bonds have been met for a particular month. A certain amount can be pre-placed into an operating a count and a repairs/maintenance account so that the contractor will not be out-of pocket from the start. Isn’t one of the main points of privatizing a water/wastewater system to transfer risk risk from the municipality to the contractor in return for a good day’s pay, not to transfer the municipality’s money and up the risk of a bond default if something happens to the contractor?

More to come.

© Copyright 2012 Tanna K, All rights Reserved. Written For: Tinytown Unleashed
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  1 comment for “TU* takes a look at the Cohasset Water RFP 3.09.2012

  1. Mary A. Parsons
    March 9, 2012 at 1:22 pm

    I think peter said he used Aquarion’s work in Elizabeth City, Pa as a model for the RFP. I would like to hear the pro’s and con’s of this RFP and the pro’s and con’s of Cohasset running the water dept. without a contractor doing it.

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