Rio Communities denies AC Disposal protest over contract

RIO COMMUNITIES — A bid protest by the losing company for the Rio Communities solid waste contract has been denied by the city.

In March, a month after Rio Communities city councilors unanimously approved a contract with California-based Universal Waste Systems for the city’s solid waste services, AC Disposal Services filed a protest with the city.

Because of the COVID-19 pandemic, a public hearing couldn’t be held until last month. On Tuesday, July 28, AC Disposal’s attorney, Tibo Chavez Jr., and owner and operator, Charles Montoya, presented their case in front of the council as well as the city’s hearing officer, Angela Valadez, who is the city’s financial clerk and chief procurement officer. The company contends their bid was unfairly evaluated.

During the hearing last month, Chavez indicated he wanted a neutral hearing officer other than Valadez because she was one of the evaluators for the solid waste bid as well as a witness. He also wanted to be able to subpoena several other witnesses, including Valadez, Gordon Reeves, the city’s code enforcement officer; Lisa Adair, the city’s clerk; and Stephanie Finch, the city’s director of finance. All four were on the evaluation committee.

Chavez also wanted to be able to question Rio Communities Mayor Pro Tem Peggy Gutjahr and former city manager Leisa Haynes, as well as the complete, unedited personnel file of Haynes, who was terminated by the council from her position in March.

While each of those requests were denied by the city, Chavez and Montoya were able to present evidence and argument last month. The Belen attorney asked the city to terminate its contract with UWS and for the solid waste contract to be rebid.

“There were violations of the procurement code and the bid evaluation process is invalid and flawed because of the arbitrariness which is supposed to be objective,” Chavez claimed.

The attorney told the hearing officer he believes that Haynes being terminated from her position causes concern about her relationship with UWS and her role during the bidding process.

“There were two News-Bulletin articles — one regarding her suspension and one about her termination,” Chavez said. “The second deals with Ms. Haynes responses to (the News-Bulletin) in regards to meetings with Universal Waste. She not only had meetings but lunch with Universal Waste during the bid and negotiation process, which is contrast to the procurement code.”

In March, when the city council voted to terminate Haynes, she told the News-Bulletin the main reason she was fired was because she had lunch with representatives of UWS.

“(I was told I was put on administrative leave) because I went to lunch with the solid waste company that was in consideration for the city,” Haynes said in March. “I kind of knew this was coming because I figured they (the council) wanted to run the city.”

The other reason, Chavez said, was about two items in the request for proposals — the discounts and fee schedule.

“The discounts are directed toward three groups — the indigent, seniors and veterans,” Chavez said. “None of these three groups are defined in the RFP, and without definitions and demographics, it’s impossible for the bidder to address the discounts.”

According to the city’s response to the claim, AC failed to provide detail of discounts that would be provided to seniors, veterans or low-income households. Valadez wrote if the company was unsure of the definitions, it could have acquired the informaton from the city.

The fee schedule, the attorney argued, was evaluated on the premise the company would provide for a local billing office as well as an estimate of gross receipts taxes that would be generated in the city. Chavez argued there is no method of determination of GRT because it is confidential and cannot be disclosed to a municipality.

Chavez also said the fee schedule was supposed to be set by each of the bidders. AC Disposal bid on a four, eight and 12-year basis, which was lower that UWS. He said UWS bid for an eight-year contract, two four-year terms that would be a maximum of the contract. UWS was ultimately approved for a 10-year contract.

“The 12-year contract should have been recognized as the low bid,” Chavez said.

Valadez, in her response, wrote the RFP simply requested an “estimate of gross receipts taxes that would be generated to the city.” She said the RFP didn’t request confidential documents.

The attorney said there wasn’t a local preference option, which he says his client was the only company to receive that 5 percent rating.

According to the city’s response to the claim, the city acknowledges the RFP didn’t “provide language describing the requirements for complying with any in-state preference provisions” … but “despite this misstep,” AC informed the city it was a registered New Mexico resident bidder but didn’t provide a copy of a valid resident business certificate.

“The bid process was tainted,” Montoya said during the hearing. “The evaluation process is arbitrary. We have evidence that city employees were having lunch with (representatives of UWS) during the evaluation process. We have a video and a copy of the paid receipt.”

Montoya provided a receipt dated Jan. 16, 2020, from Oasis Cafe for $86.18 paid by Mitch Blackburn, owner of UWS. Montoya also provided and played a video he obtained of the lunch in question in which Haynes and other members of the city’s staff having lunch with Blackburn and other UWS representatives.

Chavez argued the bid process was tainted because of the improper communications between city employees and UWS, saying the company that won the contract violated the procurement code and the statute regarding bribery of a public employee because of the lunch.

In her response to the protest and regarding the claim of the improper meeting, Valadez says while the city staff did meet with UWS to begin negotiation regarding the agreement. She wrote the lunch was held after both AC and UWS received letters on Jan. 9 indicating the highest qualified solid waste collection company had been determined.

“As such, at the time of this lunch, Universal had already been selected the winner of the RFP,” Valadez wrote.

She also determined there is no evidence that Universal had the intent to bribe city employees.

Despite the purchase of this lunch neither qualifying as a “bribe” or “gratuity” … the city placed Ms. Haynes on administrative leave with pay to allow for an investigation into Ms. Haynes’ actions regarding this subject as well as numerous others. Following the completion of this investigation, Ms. Haynes was ultimately terminated for a number of reasons not limited to this matter.”

When the city’s final decision was made public on Monday, Montoya said he is considering appealing it to district court.

“We’re considering all our options at this point, and going over the city’s written decision,” Montoya said.