CONTRACTING FOR HOUSING AND COMMUNITY DEVELOPMENT IN THE CITY OF NEW PROSPECT

1. You are a member of the evaluation panel appointed to review the bids and make a recommendation to the council about which entity to award the contract. One or two people in each group should play the following roles on the selection panel: council member, the client of the city’s current housing service, city manager and/or assistant, a public employee from the neighboring jurisdiction’s community development office hired to serve as a consultant on the panel, the city’s legal counsel, and a member of city’s procurement, purchasing, or finance staff.
2. The city lacks a formal scoring system for bids. As a member of the selection panel, your task is to weigh the advantages and disadvantages of each provider in terms of 1) cost, 2) experience, 3) capacity to fulfill the terms of the contract, 4) likelihood the provider will be responsive to the service population, and 5) “value-added” benefits the provider has to offer the city.
3. As a group, you must arrive at a consensus on which bid offers the “best value for the public.” This is the bid you will recommend to the council for a contract award.

Bids

1. The lowest bid comes from Schulte Homes, Inc., a private, for-profit housing developer. On the plus side, Schulte came in with a bid that is less than the city’s current budget for managing these programs. They are a large, multi-million dollar corporation with a demonstrated track record of success and unquestionable management capacity. Their proposal contained a potentially valuable “extra”: the offer to construct and manage two low-income apartment dwellings in the city. On the negative side, Schulte has no experience providing the types of services outlined in the scope of work. The bidder did not say whether they intend to rent some of their low-income units to citizens for whom they were also managing rental subsidies. Finally, the provider failed to address the requirement of the proposal to describe how citizen complaints would be handled and what mechanisms would be used for soliciting client input in agency programs and services.
2. The second-lowest bid came from La Lucha, a community-based nonprofit agency that operates an emergency housing shelter, food pantry, substance abuse support program, and advocacy services in the city. Their bid also came in below the city’s current budget—just slightly higher than that of Schulte’s bid (less than 1% above Shulte’s bid). La Lucha’s strengths include a long history in the community and a reliable presence as advocates for the region’s poor in the city, county, and state. They also have experience with the at-risk-of-homelessness population. One benefit that La Lucha brings with their tax-exempt status is the ability to generate additional revenue through private donations. Although they have some experience managing public funds through small grants from the county, La Lucha is mostly funded through private donations and churches and relies heavily on voluntary labor. A contract award of this size would lead to a major increase in the scope and scale of their operations. Implementation delays are likely: The organization would need time to hire new staff and shore up their administrative capacity.
3. The second-highest bid is from the public employees currently working in the Planning and Community Development office. The public employee’s bid is about 15% above the lowest bid. Yet, the bid offers a number of benefits. The public employees have the most experience with the management of the specific programs out for bid; they have experience with delivering the services and have the greatest degree of technical expertise in managing the federal grants and adhering to their regulatory requirements. The staff is also experts in Fair Housing laws. The public employees’ proposal conformed perfectly to the bid specifications, yet contained no “extras.” Their proposal provided a detailed plan for responding to citizen complaints; however, their plan did not really differ from what the city has done in the past.
4. The highest bid comes from Neighborhood Networks, Inc., a national nonprofit with an office in the region. Their bid is about 17% above the low bid, yet this provider offers many advantages. They are a highly successful, multi-million dollar national nonprofit with a mission geared toward housing and community development. They have extensive experience with the target population, and their management capacity is reliable. About 70% of the corporation’s funding comes from the government, so they are an experienced government contractor and grant administrator. Their nonprofit status is another inherent advantage; they can raise revenue independent of government by offering individual and Contracting for Housing and Community Development in the City of New Prospect 3 corporate donors a tax write-off. Unlike La Lucha, Neighborhood Networks has full-time staff dedicated to fund-raising and development. The executive staff of Neighborhood Networks maintains close connections with key staff in HUD and employs a lobbyist to maintain a presence in Congress regarding housing issues. Neighborhood Network’s proposal outlined several protocols for incorporating citizen participation.

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