Today's Topics:
ALERT - White pigmented HDPE milk jugs
Political Involvement of Solid Waste firms
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Date: Fri, 17 Oct 1997 17:16:14 -0500
From: RecycleWorlds <anderson@msn.fullfeed.com>
Subject: ALERT - White pigmented HDPE milk jugs
Bruce Fortin of EnviroPlastic just called me to say that a major New =
England dairy, H. P. Hood, today announced that it will be introducing a =
white pigmented natural-HDPE milk jug. He said if Hood gains market =
share following introduction of their white bottle, other dairies can be =
expected to follow suit, and, potentially, explore other colors to =
distinguish their brand from the others.
Bruce stated that this would be economically devastating for HDPE =
processors, upon whom curbside programs depend, and hence upon local =
programs. The first immediate impact would be in healthy markets when =
the price paid would be cut to 50-65% of the present price paid for =
unpigmented natural HDPE. This is the typical price spread between =
clear (or more accurately cloudy) natural HDPE used in milk and water =
jugs, and pigmented copolymer HDPE used in such things as detergent and =
shampoos.
But, the second type of impact would be even more devastating, he said. =
This is because, when the HDPE commodity cycle turns down, past =
experience demonstrates that only the higher value natural HDPE market =
continues to move: it becomes all but impossible to move the pigmented =
stream.
That is to say, the natural HDPE stream, which is approximately 60% of =
the total natural/copolymer HDPE market, would be devalued in the best =
of times and, in the worst, made unusable just like copolymer HDPE.
When contacted by Bruce, H.P. Hood indicated that it did not check with =
the recycling industry before making its decision and did not appear =
concerned about these impacts on recyclers.
Those who want to communicate their views to the dairy can write or =
call:
Mr. Peter Ross
H.P. Hood
90 Everett Avenue
Chelsea, Mass. 02150
617-292-4800
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Date: Fri, 17 Oct 1997 08:50:35 -0700
From: John Reindl <reindl@co.dane.wi.us>
Subject: Political Involvement of Solid Waste firms
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I have been getting a number of requests for the home pages of the
articles on the political involvement of Waste Management in Wisconsin,
so I thought it would be useful to post the Web site to the list:
http://www.thedailypage.com/wasteman.htm
There are actually three separate articles available through this site:
1. An article in Isthmus, a weekly paper in Madison
2. An article in the monthly Milwaukee Magazine
3. An news release that was put out jointly.
The articles are fairly different, so it is useful to get all three.
John Reindl
Dane County, WI
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Click here to read press notices released September 18, 1997 by Isthmus and Milwaukee Magazine.
Why did state officials renew a five-year, no-bid contract with the giant garbage hauler after it botched the first one? By STEVE KORRIS Six weeks before the election of 1994, executives of Waste Management Inc. threw a party that raised more than $20,000 for Gov. Tommy Thompson's reelection campaign. Three days later, the company's political action committee gave the governor another $10,000. Six weeks after the election, Thompson's Department of Administration renewed a five-year contract with a Waste Management subsidiary, without competitive bidding, to dispose of the hazardous waste of state agencies. Waste Management's top lobbyist calls it a coincidence. "We never got a contract that we did not earn," says Lynn Morgan, manager of legislative and regulatory affairs at the company's state headquarters in Menomonee Falls. Still, to lock up the business of every state agency for five years, without bidding, was for Waste Management a dream come true. To make it even sweeter, the state allows local governments to waive their bid rules and "piggyback" on the contract for farm and household cleanups. How much the contract is worth, only Waste Management knows. The state's cost is about $1 million a year, but the Department of Administration receives no record of local piggyback payments, which are likely even greater. An 18-month contract with the Milwaukee Metropolitan Sewer District, for instance, was worth $823,000. The contract was awarded by five anonymous employees of the government that Thompson leads. Somehow, they were able to overlook the subsidiary's dismal performance during its initial five-year no-bid contract. The episode raises questions about the influence of Waste Management in Wisconsin. An article in the October issue of Milwaukee Magazine released this week details how the firm has secured profitable contracts with local governments in the Milwaukee area, arguably to the detriment of taxpayers. Beyond that, the story of how Waste Management came to land a major contract and have it renewed despite serious performance problems suggests that Wisconsin should consider fundamentally reforming its systems for awarding contracts. BUNGLING THE JOB In simpler times, a state agency with a load of hazardous waste would take bids and hire the low bidder to take it away. The first agency to award an ongoing contract was the Department of Transportation, which hired Aqua-Tech of Port Washington in 1985. The contract was open for other agencies to use on the same terms, but the University of Wisconsin System chose instead to hire Chemical Waste Management, a Waste Management subsidiary in Alsip, Ill. Soon, some agencies were piggybacking on Aqua-Tech, while others were choosing "ChemWaste." In 1988, Superintendent of Public Instruction Herbert Grover arranged for public schools to piggyback on ChemWaste. This initiative, coming from a Democrat, infuriated Aqua-Tech owner David Opitz, a Republican who serves today as chair of the state party. Opitz wrote to a fellow Republican, Administration Secretary James Klauser. He asked how an out-of-state company could get the job without bidding. He said ChemWaste's prices were too high, and that its plan for transporting hazardous waste was illegal and dangerous. Weeks later, Opitz got a letter from Klauser. It said the contract was appropriate, the company was a big employer in Wisconsin, the prices were fine, and everything was safe. Opitz had found a force stronger than his party. Soon, he would be shut out completely. DOA officials decided to award a single five-year contract for all state agencies, and to waive bids. By law, there should be a statement justifying the waiver, but it is absent from the record. ChemWaste, Aqua-Tech and three other firms presented proposals in 1990. A team of technicians from various agencies evaluated the proposals and chose ChemWaste. The company bungled the job from the start. Its invoices for one month overcharged by more than $5,000. State contract manager Ellen James demanded immediate improvement and warned, "If these concerns are not promptly and satisfactorily addressed, it could severely impact the renewal of this contract." Service was spotty and records were unreliable. James changed jobs, and the new manager, Marie Hass, summoned the team of technicians to discuss the future of the contract. They agreed to renew it for a year, but made the renewal conditional and expressed serious concerns. UW System technicians, seeing little improvement, poured out their frustrations to Hass in 1992. They said ChemWaste was slow to dispose of a variety of wastes. They said they were getting neither the records nor the regulatory information they needed. They said some of their wastes were going to unsafe incinerators. More problems emerged in 1993. Technicians from various agencies told Hass that in most cases, they were not receiving certificates of destruction. Cargo lists were missing too. ChemWaste was slow to answer hard questions "and sometimes we never do get a response," noted Hass in a summary of the session. The technicians were also unhappy with prices. Hass relayed this objection to Eric Laut of ChemWaste, but he was not moved. "The state of Wisconsin recognized, in their evaluation process, that we were not the lowest price company, but rather, the company that can best protect the interests of the state," he wrote back. Checking the charges continued to be a nightmare. "The invoices we are receiving are riddled with errors," UW technician Leigh Leonard wrote in 1994. She found an invoice on which the date, the code number, the billing rate and the mobilization fee were all wrong, and the cargo list number was missing. Leonard was upset enough to ask for the pros and cons of competitive bidding versus evaluated proposals. She asked if the state could streamline the process for going off the contract due to lack of performance, and if the state could hire different vendors for different wastes. SUSPICIOUS TIMING Department of Administration officials responded coolly to Leonard's request. They said that having a single contract "allows for pooling of state expertise." Five years was the right length because "It takes the state and the contractor the better part of two years to work out all of the intricacies of the contract." As the contract came up for renewal, the DOA said five evaluators picked from the technical team would rate the proposals in five categories. The most important one would be service. Cost would rank second, followed by responsiveness, site quality and corporate experience. Eight companies submitted proposals. ChemWaste sent along its annual report, which stated that it was laying off hundreds of workers, taking a $550 million charge against earnings, and borrowing from its parent. But the bad news hardly mattered because financial strength was just one of six factors related to site quality. On Sept. 20, 1994, Waste Management executives held a party for Thompson in the Chicago area. The governor's campaign reports show 28 contributions on that date, totaling $20,050, from company officials and their relatives. ChemWaste got the contract in December. There is no evidence of any link between the contributions and the contract, but the timing is troubling. "That would certainly sound suspicious, from an outsider looking in," says Jack Huffman, director of the procurement and purchasing management program in the business school of the UW-Madison. "If competitive bidding is waived," he says, "and the vendor who gets the purchase order is also a political contributor, does that sound right? I would have to say no, for the good of the organization and the stakeholders of that organization. You like to separate all purchasing decisions from anything else that is going on." DOA records show that the Laidlaw company of Pecatonica, Ill., outscored ChemWaste in the more important categories: service, cost and responsiveness. But ChemWaste more than made up for the deficit with big scores in site quality and experience. The judgments are a mystery because the judges are. The evaluators' names are confidential. This is done to prevent improper contacts during an evaluation. But, as Huffman notes, confidentiality is no longer needed after a contract is awarded. VIRTUAL MONOPOLY Where one curious tale ends, another begins. Laidlaw's David Ayres does not believe the evaluation was unfair: "It was a big bid and I almost got it." What was unfair, he says, was a monopoly that the Department of Agriculture, Trade, and Consumer Protection (DATCP) enforced for ChemWaste. DATCP awards grants to counties for the cleanup of farm pesticides. The rules for the grants say counties can hire firms approved by the department. A note to the rules says the department will approve operators who have contracted with the state to dispose of hazardous wastes. When the rules were drafted in 1992, a reviewer at the Legislative Council asked if DATCP would also approve operators who did not have a state contract. The department said yes, but this clarification never made it into the rules and, until this year, no county asked for competitive bidding. Says Nicholas Neher, administrator of the department's agricultural resources management division, " I am trying to guess why it has not happened." Sen. Fred Risser (D-Madison), who received a copy of the rule in his capacity as Senate president, has some idea: "It may have been perceived that only one contract is possible, although the law would indicate that a number of contracts could be made." The monopoly was broken this year by a coalition of nine northwestern counties. Regional planner Dale Cardwell of Spooner says local officials believed that Laidlaw was doing a better job on household cleanups than ChemWaste was doing on farms. The counties asked the Ag Department for approval of Laidlaw, and they got it. DATCP attorney James Matson says the awarding of this contract to Laidlaw clears the whole five-year record, by proving that the contract with ChemWaste was never exclusive. COMMON SENSE There is a better way to manage hazardous waste: bid it. The Illinois Environmental Protection Agency, for example, take bids for household cleanups every other year. Agency officials hire the low bidder and the next lowest bidder or two, so they can steer business away from a company that raises prices or provides poor service. Dave Walters of Illinois EPA says state agencies there arrange hazardous waste disposal on their own, as Wisconsin agencies once did. He does not understand Wisconsin's reliance on a single contract. In Illinois, he says, "We would not be able to approve one without authority from the legislature." Taking an even stronger position in favor of competition is Dane County Cleansweep manager Honore Kraemer. She took bids last year on 18 different waste streams. The Heritage company won 11, capturing five-sixths of the Cleansweep dollars. Waste Management's subsidiary, renamed AETS, and the Clean Harbors company earned small contracts. "I thought that management of three different contracts would be cumbersome, but it has not been," she says. "It pays to set up a contract this way. The contractors will object because they are not making the money they would have made if it was set up the other way, but we still got seven to bid." The Waste Management contract is just a small part of a much larger picture. The state of Wisconsin spends more than $5 million a week on contract services, not including road and building projects. In the 1995-96 fiscal year, it made payments under a staggering total of 62,647 contracts with private organizations. Unfortunately, 17 years have passed since anyone took a critical look at the process through which state contracts are awarded. On that occasion, the Legislative Fiscal Bureau dug up enough bad news to jar the Legislature into action. Bureau researcher Tony Mason recalls it as "this large flat stone that we turned over." Agencies seldom took bids, he found, and 87% of contract dollars were allocated through negotiation with a single source. There was no mechanism for evaluating performance, and no way of determining the value received for dollars spent. In response, legislators in 1981 passed several reforms. They told agencies to identify contract expenses in budget requests, to review the relations of officials to contractors, and to evaluate contracts as they expire. They asked for an annual report on the number, nature and value of contracts. A committee was set up to propose further reforms. The group, chaired by Rep. Thomas Hauke of West Allis, held six hearings at the Capitol in 1982. That, however, was about all it did. "It sort of dead-ended," admits Hauke. "It went nowhere, and it has been pretty well abandoned. We held hearings, but we could not get responses to our questions. Everything was so hard to get to. We pretty much hit a stone wall." In 1983, the Legislature moved away from reform. It passed a law allowing agencies to waive bids and solicit proposals when bids were "not practicable or not advantageous." The Department of Administration, under Gov. Tony Earl, stressed that waivers were not to be granted lightly. It published a rule stating that "Competitive bidding is the preferred method for procuring contractual services, and shall be used in every case that permits the preparation of specifications or standards, or both...." The rule still stands, but state officials have since waived bids more than 2,000 times. Lawmakers should be checking to see if these waivers were truly more practicable or advantageous than bids. They also need to tighten the cooperative purchasing law, so that local governments cannot piggyback on state contracts for which bids were waived. It is a practice which defeats the law's purpose, which was to save money. It allows companies to land contracts without bidding, and with little accountability. "Competition," says Sen. Risser, "would presumably be to the benefit of the taxpayers. That is common sense, isn't it?" The king of trashWaste Management dominates the state's garbage biz.At the intersection of campaign cash and government contracts, few companies stand out like Waste Management. Company employees, their relatives, and the company's political action committee gave Gov. Tommy Thompson $43,390 for his 1994 campaign. They have contributed $27,800 toward his next race. Forty-four Waste Management employees keep the PAC account fat with biweekly payroll deductions. Since 1990, the PAC has poured $101,420 into the pockets of political candidates, and $50,540 into the treasuries of legislative campaign committees and political parties. Waste Management's generosity has touched more than two-thirds of the Legislature. In the Assembly, 66 of 99 representatives have cashed campaign checks from the company's PAC. In the other chamber, 23 of 33 senators have run with the company's money. Waste Management lobbyist Lynn Morgan says the company is meeting its obligation to participate in democracy, and doing so with full disclosure. "Our contributions are far from the largest," she says. "Other companies are more aggressive, through PACs and overall. Our giving is proportionate to our size." If so, the size is extra-large. According to the state Elections Board's 1993-95 report on PACs, the only companies that gave more to candidates, parties and legislative campaign committees were Bank One, Firstar Bank and Northwestern Mutual Life Insurance. (The board has not published its 1995-97 report.) Waste Management was created in 1968, when Milwaukee and Chicago trash haulers merged their operations. The company, based in Oak Brook, Ill., began buying smaller companies by the dozens each year. In 1970, the city of Milwaukee hired a Waste Management subsidiary to haul household trash to suburban landfills. The contract so strengthened the company's position that by 1972 it was able to buy out its top two Milwaukee competitors. From there, Waste Management consolidated the trash business throughout much of Wisconsin, securing more and more local contracts for collecting, hauling and burying trash. Today, Waste Management owns seven large landfills from Franklin to Ladysmith. Its capacity to bury trash exceeds that of all other private landfills together and all local governments, like Dane County, that own landfills. Middleton, Sun Prairie, Stoughton and Monona pay Waste Management for full service from curbside to landfill. So do nine other cities, 38 villages and 60 towns. In all, the company performs the municipal function for about 350,000 state residents, more than all other companies combined. -- S.K. -- S.K. |
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Date: Fri, 17 Oct 1997 16:03:08 -0700
From: Institute of the Northcoast <inc@northcoast.com>
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End of GreenYes Digest V97 #252
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