Challenges and rewards
Some communities initially worried that pooling resources might result in staff reductions. “The concern was that one community would run it and their staff would disappear. But there’s plenty to do. You still have to manage your own portion of the work,” says Burke. “And we really reach out to the communities to share in taking the lead. Maybe we’re working on two contracts and someone else is between projects.”
No resulting staff reductions have been reported, but some smaller communities were able to cut back on outsourcing for bid writing and other administrative services. Participants have benefited from the efficiencies of pooling the efforts of their administrative, legal, engineering and purchasing staff. This has helped maintain services despite funding cuts. As Newlon put it: “We never have enough resources for all the infrastructure we have to take care of.”
On the other side of that coin, there was concern that administering the program would increase the staff burden. This was especially true early when administrators, attorneys, engineers and purchasing agents spent many hours laying the groundwork for producing bid specifications acceptable to all parties. Reconciling the differences was one of the biggest initial hurdles. In subsequent years, however, renewal contracts require minimal rewriting.
Credit: Richard Lanenga Photography
Municipal Partnering Initiative pricing per square foot for sidewalk replacement has consistently remained near zero for the 2008-13 average. MPI divided this service into seven bid groups to optimize costs.
This collaborative effort on bid specs produced possibly the greatest benefit of the program: Culling the best solutions for each contract.
“We take everyone’s specs, lay them all side by side, and look for the best approach,” says Newlon. “This helps identify best practices.” For example, when comparing specs to develop a joint bid for tree trimming, Glenview administrators found that Wilmette had better contract language about how long tree branches could remain on the parkway.
Some communities were concerned about damaging relationships with current contractors that might get squeezed out in the process of consolidating contracts. And some contractors felt they would be taking a greater risk (all efforts into a single contract) for a smaller reward (reduced pricing).
“Whenever the purpose is to change the marketplace there are always concerns about winners and losers,” says Newlon. “For example, maybe a small contractor won’t be able to bid [on certain contracts].” However, most communities have many individual, non-MPI projects and often use smaller contractors with whom they have established relationships.
Those contractors who land MPI contracts can benefit from having to generate only one bid covering multiple communities rather than separate bids for each town, thus filling their entire construction season and, in some cases, expanding their services to new areas. These efficiencies can be reflected in lower pricing.
Smaller communities have their own pros and cons to consider. These communities have the most to gain through economies of scale. “They may do 1,000 square feet of sidewalk in a year, but they get the contractor’s pricing for 24,000 square feet,” says Peter D’Agostino, management analyst for Glenview.
However, these communities may lack the staff resources to share the administrative load. Also, some small agencies have expressed concern about getting a lower priority in scheduling their work with the contractor. While compromise sometimes is needed, in other cases a contractor doing a big project in a neighboring community can more readily pop in and out for a small job.
Other issues that had to be addressed were differences in fiscal years and funding sources among the participating governments. In such cases, communities may be divided into subgroups by fiscal year or those using Motor Fuel Tax (MFT) funding. Another method for accommodating different budget groups is using a clause allowing an extended period for a community to award a contract.