Ch2M Hill: Big Bucks with No Competition
The largest line item in the City budget is up for renewal and this has yet to be discussed during a Council meeting.
According to CH2M Hill contract, 120-day notice is due, if the Council decides Not to renew the contract, which expires September 30, 2016. The option to renew is to be placed on the council agenda no less than 150 days, which was last month.
Otherwise, the taxpayers are on the hook to pay for 180 days to terminate the contract, which is the equivalent of almost $2.5 million.
Also, if the City Manager decides to hire a CH2MHill employee, the City would have to pay Ch2M Hill 100% of the staff salary (for over $100k).
The legal jargon is confusing, though one thing is clear, CH2MHill is a Revenue-driven company. The estimated contract amount is $4,775,000/year, or $400k month. There are lots of variables and stipulations for add-on costs.
Since 2006 incorporation, Johns Creek entered a public/private partnership with CH2MHill, an engineering and operations consultant, to provide a wide range of municipal services, including public works and community development.
This contract has never been put out to bid, and though the scope of work CH2MHill does keep diminishing, the dollar amount keeps increasing. With No Competition or Comparison shopping, who knows what is the best value?
GA Weekly Post wrote an interesting article about this Trillion Dollar Industry.
Below are PDFs of the Master Contract and most recent amendments.
Source: City of Johns Creek
This issue has been raised in several of the City Council Work Sessions that I have viewed online.
Where should the process to bid out these services originate from? The City Council? The City Manager? Or both?
There seems to be a very cozy situation between the CH2MHILL employees and our hired City Staff. At what point do those cozy relationships become a conflict of interest?
Councilman Gray I know you have spoken up on this topic? As our representative, we'd like to know where we are going from here.
Or shall we just kick this mega million can down the road for yet another year?
Yes it had been discussed casually last year when they extended the contract.
It should have been on the agenda at the very least last month for extensive discussion on how to proceed.
Next weeks agenda should be interesting.
I discussed this frequently on my campaign as a great opportunity for savings. If CH2M Hill wouldn't renegotiate the substantial overhead, then the city could bring over those employees from Pub Works, CD, etc. Then, it would provide great savings for the taxpayers, better accountability and control by the city, and provide better job security and compensation for those employees. It is a classic "win-win-win." Only losers being the execs at CH2M.
CH2M Hill admitted criminal conduct and paid almost $20MILLION in time card fraud.
https://www.fbi.gov/seattle/press-releases/2015/last-charged-conspirator-sentenced-in-ch2m-hill-time-card-fraud-case-u.s.-totals-nearly-20-million-from-those-responsible
Yes, the contract needs to be restructured. But, before we do that we need to design the optimal model for city government, assess the opportunity for improved efficiency and effectiveness and then solicit responses from various suppliers.
Too often, companies rush to outsourced or renegotiate existing contracts and leave money on the table. I laid this process out for staff last year. It's now time to revisit the status of this process and make progress.
Bob Gray
Post 4
Put CH2M on notice that contract will expire. Offer to extend on month to month basis unitl city can put together their plan. If they balk, let contract expire and hire our own departments. I would rather have CH2M overhead/profit and bonus money go to the city and remain in community.
For more details on contract service delivery options as presented to the council during this work session agenda from January go here:
http://johnscreekga.granicus.com/GeneratedAgendaViewer.php?view_id=1&clip_id=121
Why didn't Johns Creek insist on a termination for convenience clause, i.e., either party can terminate the contract with our without cause with a 90 day notice; this clause is common in this industry. Re-bid the contract. Many other Georgia governments have replaced this firm - Sandy Springs, Fulton County, Rockdale County, Augusta, Forsyth County, Clayton County, Barnesville, Warner Robins, and Vidalia. There's a reason why this government is not being fiscally conservative on this contract, and it doesn't pass the smell test. Any cost savings could be used to help fund traffic relief, paving, and/or drainage projects in our City.
It is a 180 day termination clause.
This is not a true termination for convenience clause. I've never seen a term. clause that cost $3 million. I've been in this industry for years and there's no way it will cost them $3 million to demobilize. It also appears the City may be able to rebid the contract without penalties. Hopefully, the lawyer advising the City is not the same one that negotiated this contract.
Apparently Ch2M Hill worked themselves a good deal.
Have a look at the contract below. It stipulates 180 days. Page 30. Section 25.
https://www.johnscreekpost.com/wp-content/uploads/2016/05/CH2MHILL_Contract_-1st-_Amendment_Approved_December-2010.pdfthe original It
"Crooked" Bodker makes bad deals for the taxpayers of Johns Creek(P.88). Wonder how much campaign contributions Ch2M Hill or its employees ponied up over the years?
This contract is clearly not in the best interest of the City, its taxpayers, and it completely stinks. Other than CH2Mhill, someone or some people have benefited from this one-sided contract.
My family of registered voters will be holding on to this one and deal with it during election time. This is the same firm that entered into a deferred prosecution agreement with the U.S. Attorney's Office District of Connecticut and paid a $2 million fine.
This company was also in the middle of a major scandal in connection with a no-bid $3.9 million contract in Cleveland, and several people went to jail. Los Angeles DWP sued this firm for $13.5 million, plus punitive damages for alleged overbilling. Clayton County also removed this firm from its SPLOST Program for alleged overbilling.
Why is this element in our fine community?
This company has no business being in the business of serving the public. They are corrupt. They do ANYTHING for a buck. Shut these guys down. Learn more about what they did to their own exec Tom Huntsinger who told them to stop their unethical behavior. They literally killed him.