CH2MHILL Got $800,000 in Start-Up Costs

CENTRAL — When the bids for Central’s City Services contract were opened last week, the current contractor, CH2MHILL, had the most expensive proposal — $2.7 million higher than the low bidder, IBTS, for the five-year contract.

The other two bidders, CSRS and Severn Trent, also had bids lower than CH2MHILL.

But the bid documents do not disclose another fact: CH2MHILL actually has an $800,000 advantage over the other bidders.

The reason is, the City of Central paid CH2MHILL $800,000 for “start-up” costs in 2008.

Under the privatization agreement with CH2MHILL, these start-up costs were not itemized or accounted for.

How the money was spent has not been documented for the city.

Last week, the Mayor’s Committee on City Services received a Request for Proposals for a new master privatization agreement for a five-year period beginning July 1, 2011.

Unlike the previous contract between the City of Central and CH2MHILL, the new contract would provide no money for “start-up” costs.

The bids received for the first year of the contract were:

• IBTS — $3,027,000

• CSRS — $3,500,000

• Severn Trent — $3,537,908

• CH2MHILL — $3,538,293

While CH2MHILL still has the advantage of the $800,000 it was paid, the other bidders are having to fund any “start-up” costs themselves.

Despite these disadvantages, the other three bidders still outbid the incumbent firm.

If it loses the City Services contract, CH2MHILL will get to keep the equipment it used to provide City Services — even equipment purchased with “start-up” funds — unless the City buys it back.

A new City Contractor will have to supply all necessary equipment at its own expense.