Waste Management Loses Vote, Sues City
Oct 24, 2014
By Ken Epstein
The country’s biggest trash hauler is refusing to take no for an answer after the City Council voted overwhelmingly to reject Waste Management’s proposal, instead giving the 10-year, $1-billion contract to a local company that has cheaper rates and is pledging to local hiring and partnering with local agencies to handle the city’s waste.
Waste Management filed a lawsuit against the City of Oakland for illegally giving the contract last week in a 7-1 vote to its competitor – California Waste Solutions (CWS) – accusing the council of being “heavily swayed by long-term personal and political connections with (CWS),” according to the lawsuit filed in Alameda County Superior Court on Aug. 18.
The suit asks the court to set aside the council’s decision and award damages and attorney’s fees to Waste Management of Alameda County. As the only other bidder besides CWS, the company would effectively be awarded the contract.
According to the suit, Waste Management spent $1 million to create a proposal to meet the city’s needs to more efficiently handle recycle and compost trash. “(But) the City Council was dedicated to subverting the process to ensure (California Waste Solution’s) success,” the lawsuit said.
The real issue is not that the playing field was tilted toward CWS but rather that many in the community feel that city staff tried to rig the deal to go to Waste Management, according to Post Publisher Paul Cobb, who has spoken with numbers of members of the community and the City Council.
Cobb said a Freedom of Information Act request of emails would show staff’s role in the bidding process.
“I think its important for people to know that our vote brought significant cost savings to the people of Oakland,” said Councilmember Rebecca Kaplan.
“Waste Management should not have been surprised that it lost. It was significantly more expensive and offered significantly fewer services to the community,” she said.
Cobb said he was hearing that staff extended negotiations with the companies up to the last minute, making it difficult for a competitor like CWS to win the contract and get its operations up to speed in a relatively short period of time.
In addition, Kaplan said, “The city had an option to extend the contract through December 2015. Without tell us, staff chose to shorten the contract to June 2015,” tilting the field n favor of the incumbent.
The city paid a consultant $1 million to find companies to bid for the contract but only came up with two. Other cities like San Mateo and Contra Costa County did not have trouble finding six or eight bidders, Cobb said.
“Staff liked Waste Management, though it was charging much higher rates, and hated CWS, though it charged less and is committed to hiring local residents,” he said.
“They tried to make it look like CWS owner David Duong did not have the expertise, though he operated trash services in Ho Chi Minh City in Vietnam,” Cobb said. “I think the city has been fairly disrespectful of a vendor of color. He lives in West Oakland and hires 69 percent Oakland residents.”
“I look forward to the seeing the results of the city’s ‘disparity study’ – which was finally approved seven years late – only because Councilmember Rebecca Kaplan pushed for it,” he said.
“I think the study will show that the city is bypassing minority and women-owned businesses in favor of the usual suspects.”
“The Waste Management lawsuit is political ploy to the City Council to reconsidering option 2, which would give part of the contract to Waste Management.
“Even though Oakland is only 4 percent of Waste Management’s national business, they don’t want to cities to learn from Oakland’s example,” Cobb said.