In murky aftermath of bid snafu, truckers jostle for trash contract
A tug of war between two Jackson trucking companies over a high-stakes contract for hauling trash was settled last week following days of political tension.
Jackson County commissioners had to decide which of the two local truckers would snag a $2.5 million four-year contract to haul trash to a landfill in Georgia.
Picking a hauler was rife with complications, however. The contract went out to bid twice and was voted on by commissioners three times over the past two months.
After the first round of bids, the contract was awarded to WNC White as the lowest bidder. But the validity of White’s paperwork was later challenged. The bid had been missing a number, which was later penciled in by a county employee.
So the first set of bids was tossed out, and White’s contract was reeled back in.
In a second round of bidding, Kinsland Trucking came in lowest. So the county awarded the contract to Kinsland.
White then lodged a protest.
With the bidding process still in dispute, the contract landed back on the commissioners’ doorstep yet again. Should they revert to the lowest bidder from the first go around, stick with the lowest bidder in the second go around, or rebid the contract one more time?
With the clock ticking to lock in a trash hauler before the current contract expires, commissioners called a special meeting last week to decide their next move.
Kinsland and a dozen of his supporters were in the audience. He had a lot riding on the outcome
For 12 years, Kinsland and his team of drivers had been hauling the county’s trash to a low-cost dump in Georgia. They do 1,200 runs a year — carting off several tractor-trailer loads of trash each day. They haul off another 180 loads of recycling to Asheville each year.
Now, Kinsland’s livelihood was on the line. His four drivers would be out of work as well if he lost the hauling contract.
To make matters worse, Kinsland just ordered three new trailers the week before to replace some of the older rigs in his fleet, not realizing his contract could be up in the air.
“It was $210,000,” Kinsland said. “These trailers are over $72,000 a piece.”
Kinsland made nearly $520,000 from the county last year. The trash-hauling contract sounds lucrative on the surface.
But Kinsland said he was having trouble breaking even. The cost he was charging the county per load was no longer enough to pay his drivers, buy the fuel and keep up his truck fleet. He has four big rig cabs and 10 trailers in circulation just to keep the trash moving through the staging area.
Kinsland told the county he would have to go up on the hauling fee. Meanwhile, White approached the county, wanting a shot at the trash-hauling gig.
“With a second Jackson County company indicating a desire to bid, in fairness to everyone, we felt like it was only fair to put it out to bid. And in talking to commissioners they also felt like that’s what we should do,” County Manager Chuck Wooten said.
After the first bids were tossed out, Kinsland faced a tough choice. His baseline hauling costs had been substantially higher than White’s: $495 per load, compared to $450 a load. But the glitch over the fuel surcharge meant Kinsland had a second chance.
Kinsland would obviously have to come down on his bid the second time to underbid White but Kinsland couldn’t assume White was going to stick with the same bid of $450 a load.
They had both seen each other’s hand. White knew Kinsland would try to undercut him. So White would have to come down from his first bid as well.
But there was a catch. Go too low, and you could lose your shirt.
“I came down as much as I possibly could,” Kinsland said. Any lower, he would be hauling trash at a loss.
Had the county put the contract out to bid yet a third time, Kinsland had no wiggle room to come down anymore anyway, and would have likely kept his price the same.
No harm intended
Leading up to last week’s commissioner meeting, Kinsland argued White’s bid should have been thrown out the first time around as incomplete. There never should have been a second round of bidding, let alone the prospect of a third round, Kinsland said.
Whether White’s bid was in fact incomplete the first time, or whether the instructions weren’t clear, is a matter of perspective, however.
In the bids, truckers were supposed to include their standard hauling fee, plus any surcharge triggered by high fuel prices. The surcharge is intended to compensate haulers if they get hit by high fuel prices over the four-year life of the contract.
Each trucker could craft his own fuel formula. But White left out a critical number out in his: specifically, when does the fuel surcharge kick in?
Knowing when the surcharge is triggered — when fuel hits $2.50 a gallon, $3.50 a gallon, or $4.50 a gallon — is a critical number to evaluate the bids.
So the county public works director, Chad Parker, gave White a ring to clear up the confusion. Parker told White he failed to stipulate when the fuel surcharge would kick in.
“They then provided that to Mr. Parker over the phone and he actually entered it onto the bid form,” Wooten said.
When commissioners initially awarded the contract to White as the low bidder — he was $45 cheaper per load than Kinsland in the first round of bidding — they didn’t realize Parker had penciled in the missing number on White’s bid.
When Kinsland requested to see the bids out of curiosity, he noticed a line written in a different pen and different handwriting.
“I started hearing there was some concern about modifications to the bid form, and I found out this information had actually been entered on the bid form,” Wooten said.
In a formal bid process it would be highly irregular and even illegal to allow a bid to be altered after it was submitted. Bids are kept secret until the appointed hour and opened all at once. There are no do-overs or missing blanks to fill in later.
But the county technically didn’t have to bid out the trash-hauling contract. It’s considered a service contract, and service contracts don’t have to follow formal bidding rules.
Parker said he viewed the bidding process as a starting point in negotiations, and his goal was to arrive at the best price for the county.
Since White was by far the lowest bid, at least on the hauling fee, Parker didn’t want to dismiss it summarily because of missing information.
“Since he was the low bid, I figured I should call him and get the surcharge filled in,” Parker said.
As the trash-bidding dispute waged on, a commissioner election came and went, changing the makeup of the county board. Two new commissioners — both Democrats — ousted former members. The board flipped to Democratic control by a 4 to 1 majority.
And that’s where the political tension came in.
Kinsland is a Republican, while White is a Democrat.
After the second round of bidding, Kinsland was awarded the hauling contract during the final meeting of the Republican-leaning board in November.
But White’s protest had landed in the laps of the new Democratic-leaning board.
Speculation was rife that the newly seated Democratic commissioners would try to take the contract away from Kinsland and give it to White, who was of their own party.
A dozen people were in the audience of the county meeting last week where commissioners took up White’s bid protest.
Several were wearing Jackson GOP buttons, sending a message to commissioners that their moves were being watched for partisan overtones.
Commissioner Boyce Dietz, one of the newly elected Democrats, addressed the unspoken insinuation during his comments at the meeting.
“This isn’t about politics. This is about hauling the trash,” Dietz said. “We are going to try to be as fair as we can with people here.”
Dietz also said the new board inherited the contract dispute and was forced to deal with it.
“I think it was handled sloppily,” Dietz said of the bidding process.
Ultimately, commissioners voted to uphold the contract awarded to Kinsland. They concluded White’s bid protest was without merit.
Commissioner Charles Elders said that Kinsland has a proven track record. Ramping up a fleet of tractor-trailers to do the hauling would be no small undertaking.
“Mr. Kinsland has the trailers ready to go,” Elders said.
Kinsland, whose base is in Whittier, buys a lot of fuel for his fleet from Elders, who owns a gas station in Whittier.
Elders was up for election this year, and during the final stretch of the campaign a rumor began circulating that Elders was backing Kinsland for the trash contract because he stood to gain by selling Kinsland fuel. Kinsland disputed that notion, chalking it up to dirty politics by Elders’ opponents.
Hedging the fuel formula
The main wrench in the hauling bids – both the first and second rounds – was the fluctuating cost of fuel. It’s a wild card for the truckers.
“When I first started, the fuel wasn’t that much of an issue,” Kinsland said.
But gas prices became volatile over the past decade. The hauling fee was supposed to cover fuel costs, but if prices spiked, the base hauling fee wasn’t enough to cover the fuel costs.
So Kinsland convinced the county to build a safeguard into the hauling contract to cushion against extreme spikes in fuel. Climbing fuel prices would trigger a surcharge to help cover fuel inflation over the contract’s four-year period.
When the latest contract was put up to bid, each trucker could devise his own fuel formula but that made an apples to apples comparison tough.
One trucker had a lower hauling fee, while the other had a lower fuel surcharge.
A missing number in the fuel surcharge formula is what caused the bids to be tossed the first time. The second time, White’s main bone of contention outlined in his bid protest sent in via an attorney, was that the commissioners used flawed reasoning when weighing the impact of the fuel surcharge.
White claimed that his bid was technically a better deal for the county. Even though his hauling fee was $3 more a load, his fuel surcharge wouldn’t kick in until $4 a gallon. With Kinsland, the county would be forking over a fuel surcharge once prices hit $3.74 a gallon.
“If fuel goes up and stays in that range, potentially the county would pay more over time,” Wooten said. “He felt like commissioners had not been fully informed the second time we made those bids.”
“His only basis is ‘Were the commissioners fully informed?’” Commissioner Vicki Greene asked.
A happy ending for some
Ironically, the county came out better as a result of the snafu. By sending the contract back out to bid a second time, the haulers came down in their prices as they tried to undercut each other.
The low bid was $10 a load cheaper than the low bid in the first round. Multiply that times 25 loads a week, and the bid do-over ultimately shaved $15,000 off the county’s annual hauling costs.
Still, the county will spend more on trucking in the future than it has been. The county paid $518,000 last year in hauling costs for trash and recycling.
It will be closer to $600,000 a year going forward. Kinsland said the rate he’d been charging the county was too low to cover his own costs, and he was forced to come up in his fee.
Technically, the county didn’t have to put the trash hauling contract out to bid at all. Services — be it architectural work, accounting services, or trucking — don’t have to be formally bid out and awarded to the lowest bidder.
In the past, the county had negotiated an exclusive hauling contract with Kinsland.
“We have been very satisfied with Mr. Kinsland,” Wooten said.
By the numbers: Jackson’s trash trucking
Jackson doesn’t have its own landfill. It’s cheaper for the county to haul off the trash and pay a low-cost dump fee at a landfill in Georgia than it would be to build and operate a landfill of its own.
• $600,000 — Projected hauling costs for trash and recycling combined in the coming year.
• 1,220 — Trailer loads of trash hauled to the Georgia dump each a year.
• 90 — Miles from Jackson’s trash staging area to the dump in Georgia.
• 186 — Trailer loads of recycling hauled to a recycling center in Asheville each year.
Two Jackson trucking companies angling for the county’s trash hauling contract traded places for the coveted spot of “lowest bidder” after the first round of bids was tossed out due to discrepancies.
WNC White $450 per load
Kinsland Trucking $495 per load
Kinsland Trucking $440 per load
WNC White $443 per load
*Does not include fuel surcharge, which kicks in when fuel hits $3.74 a gallon in Kinsland’s bid, and $4 a gallon in White’s bid.