ANAHEIM : Bidder on City Work Threatens to Sue

A company that wanted to provide janitors, gardeners and security guards for four city buildings threatened to sue Wednesday after the city’s Maintenance Department was allowed to review the firm’s bid before saying it could do the work for less money.

Homer W. Watson, director of operations for Ameriko Inc., said his company should have been told that the Maintenance Department was also going to be considered for the five-year contract to maintain City Hall, its new annex, the central library and the police station, and that it should have been required to submit a sealed bid just as an outside firm does.

Ameriko and Koll Management Services submitted sealed bids for the contract, which were opened June 24. Ameriko, a Pasadena firm, said it could do the job for $5.1 million, while Koll said it could do the work for $12.2 million.

The Maintenance Department, which now provides services for those buildings, was then allowed to review Ameriko’s proposal before saying that its workers could do the job for $4.8 million. The City Council agreed Tuesday to give the job to the Maintenance Department.

“It appears that our prices were used as a benchmark, and if that is true, there is a huge question of ethics,” Watson said.

“I have been in this business a long time and I have never seen anything like this. . . . We are checking with our lawyer about possibly filing a lawsuit.”

City Atty. Jack L. White said the city did nothing wrong by allowing the Maintenance Department the opportunity to beat Ameriko’s price and to use its own employees if they can do the work for less money.

“I think one mistake (Watson) makes is when he says the city should become a bidder for its own work,” White said. “The city cannot make a bid to itself. And once the bids are received, the city retains the right to decide whether it should have the work done outside or by its own employees. It depends on what is cheaper.”

But John O’Leary, a senior analyst at the Reason Foundation, a nonprofit Los Angeles think tank that advises governments and industry about privatizing government work, said the $300,000 the city projects it will save by using its own employees might not exist in five years.

“If a private firm runs into unexpected costs along the way, it has to deal with those costs itself,” he said. “But if a government entity runs into unexpected expenses, it’s the taxpayers who will pay the costs.”

The squabble comes less than a month after a split council imposed a moratorium prohibiting City Manager James D. Ruth’s contracting with outside firms to do jobs currently done by city employees. The ban did not apply here because the bids were taken before the ban was imposed.

At Tuesday’s council meeting, Sharon Ericson, president of the Anaheim Municipal Employees Assn., the union that represents most city maintenance employees, said city employees will do a better job than Ameriko, while saving the city money.

“We really cleaned (Ameriko’s) clock,” she said.

That angered Watson.

“If you know the other company’s bid before hand, of course you are going to be able to massage the numbers to make your own bid more favorable,” Watson said.

“Anyone who can’t do that should throw his calculator away.”