Wheelabrator protest rejected

Published 10:25 pm Friday, April 8, 2016

The regional trash authority has denied a protest by its current trash incinerator to the authority’s decision to award post-2018 trash disposal to another company.

Wheelabrator filed a formal protest on March 14, followed by a supplement March 22, saying the Southeastern Public Service Authority added new criteria while evaluating three proposals it received in response to a request for proposals.

The protest also claimed RePower, the company issued the intent to award, did not post a required bond and seemed to have been given more points for experience in a scoring rubric than it deserved.

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In its 18-page response, dated March 31 and signed by Executive Director Rowland Taylor, SPSA denies that the intent to award was arbitrary or capricious.

The authority’s agreements with its eight member localities expire in January 2018. The request for proposals and notice of intent to award have been part of the long process of determining what the authority will look like past that point.

Wheelabrator currently takes the majority of the region’s trash and incinerates it at a plant in Portsmouth, generating steam that powers the Norfolk Naval Shipyard’s 94-building facility and more that is sold onto the grid.

RePower, on the other hand, intends to convert the region’s trash to plastic “energy pellets” at a Chesapeake facility, which does not yet exist. The energy pellets then would be sold to utility customers as an alternative to coal as a fuel supply.

A third company that submitted a proposal, Republic Services, offered to dispose of waste in its Lawrenceville landfill, about 80 miles west of Suffolk. It has not protested the intent to award.

Both Wheelabrator and Republic were given higher ratings than RePower for experience and ability, the response notes. A Wheelabrator spokesman, Joel Rubin, has said it does not appear fair that RePower got only five points fewer than Wheelabrator when it has never operated a similar facility before.

The response also says Wheelabrator knew about the “new criteria” Wheelabrator says was introduced. SPSA applied a “system-wide cost” analysis to each company’s offers because there were differences in each set of pricing assumptions and the nature of services.

“SPSA determined that it needed a way to ensure it was fairly comparing the proposed prices,” Taylor wrote. All three companies learned of the process in April 2015 in connection with the commencement of substantive negotiations.

Wheelabrator says the use of the headings “pro” and “con” used in a slide presentation given at a March 4 meeting of the SPSA board indicates that SPSA changed the evaluation criteria.

“Nothing in our review of the Wheelabrator protest or the procurement records supports a conclusion that the ‘quantitative comparison’ established ‘new criteria,’” Taylor wrote.

It also noted that the price of Wheelabrator’s proposal exceeded the price of RePower’s proposal by about $8 million per year using SPSA’s system-wide cost analysis, and thus continued to rank lowest in the evaluation factor most heavily weighted by SPSA.

SPSA’s response also rejected other claims by Wheelabrator:

  • That there was an appearance of impropriety in the procurement because SPSA met with RePower on more occasions than it met with Wheelabrator, negotiated a written agreement with RePower and had an email exchange with RePower about RePower’s desire to have the agreement approved by Feb. 28;
  • That Wheelabrator was downgraded because it also processes commercial waste in its facility;
  • That SPSA offered preferred rates, credits and advantages to RePower that were not offered to Wheelabrator;
  • That SPSA failed to properly evaluate or disregarded risks associated with the RePower proposal;
  • And that RePower’s proposal was incomplete due to a lack of bid bond posted, since the request for proposals required only “demonstration of financial capability,” which it says RePower did.

“Given the enormous price disparity between the proposals, one could argue that not selecting the RePower proposal would have amounted to arbitrary and capricious behavior,” Taylor wrote.