Solid Waste Collection, Removal and Disposal Joint Bid

One municipal service that is generally taken for granted by the residents, but a service that is essential to the well-being of a community, is Solid Waste Collection, Removal and Disposal.  Consisting of three component parts - garbage, recyclables and yard waste - for most of our member municipalities, the cost of collection and disposal represents a significant annual expenditure that has to be accommodated in municipal budgets.  Given the magnitude of this expense, it is a contract that can be secured only by a competitive bid.  In and of itself, preparing for this bid is a time consuming and expensive undertaking.  SHACOG has performed this function since 1998 for its participating municipalities.

Because of the contiguous nature of some municipal boundaries, years ago several SHACOG municipalities experimented with an independent joint bid.  Premised on the idea that their collective size would positively impact their cost, they successfully secured a multi-year contract at a price better than each would have achieved on their own.  Recognizing the value of this approach, the responsibility for the bid for a successor contract was eventually transferred to SHACOG with participation open to its entire membership.

From the average resident’s perspective, solid waste collection, removal and disposal is routine: place the items for pickup at the curb and they are removed.  From the municipality’s perspective, however, the process is replete with numerous service details, collection conditions and performance requirements.  Embodied in the specifications of each individual municipal contract, given this diversity, SHACOG, with continuous municipal input, developed a set of specifications that addressed all of these requisite elements.  While much could be standardized, some individual considerations had to be met for virtually all participating municipalities.  This resulted in a unique amalgamation of standard specifications, agreed upon by all, and individualized specifications, applicable only to one or more municipalities, into a single bid document.  This created a common basis upon which the bidders could establish their prices while meeting all of the needs of all participants.

Another unusual aspect of the process is that while SHACOG undertook all of the “front end” work of getting the contract to bid, i.e., developing the specifications, conducting meetings, placing the advertisements, and tabulating the bid results, the municipalities retained the right to individually accept or reject a bid.  Because of the nuances and variables in the bid, the participants were able to tailor a contract to their own needs by selecting the options available from the multi-page bid tabulation.  An additional advantage achieved was the ability to collectively react to universal issues that arose during the contract term.  Past matters demonstrated that the presence and clout of the group was superior when dealing with a major vendor.

Having produced an initial five-year contract, the success of this joint bid effort is proven in the fact that SHACOG is now preparing the fifth iteration of this bid in 2018.  Embracing 19 member municipalities, it was inclusive of their almost 100,000 residential units.  The largest competitive bid released at the time in the Commonwealth of Pennsylvania, it produced contracts valued at approximately $110 million over the five year contract term.  Just as significant is that based on then prevailing bid results in other municipalities, the participants achieved an aggregate savings in excess of $1 million in the first year of the contract.  Savings from this joint effort, therefore, were twofold:  achieving a better price for the service and avoiding the administrative time, effort and expense involved in preparing for and releasing the bid.

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