Documents/RRSD/6: Fair and Open Competitive Bidding

Commitment 6: Fair and Open Competitive Bidding

To achieve efficiencies in city operations and implement the will of the voters, open and fair competitive bidding on city services should be conducted on a regular basis.

Other Information:

San Diego voters overwhelmingly approved Prop C in 2006 to require the city to use competitive bidding to achieve taxpayer savings. Unfortunately, now more than four years later, not one single service has been subjected to competitive bidding under Prop C – with millions in cost savings forgone as a result. At its most basic level, competitive bidding of services is a powerful tool for improving quality and saving money when properly implemented. Competition in services involves the examination of an activity of an agency to determine whether the activity should continue to be carried out within the agency or should be purchased from an outside entity. Put simply, should the agency “make” or “buy” this activity. Yet in a larger sense, competition goes beyond the decision to “make” or “buy” to examine such considerations such as: Whether an activity is needed in the first place Whether an activity should be “re-engineered” to be more efficient Whether an activity should be “sourced” differently, either through another staff unit, another agency, a non-profit organi zation, a program partner, or a private-sector vendor. The issue of improving “performance” should dominate the three considerations above—with the concept of “competition” driving the process to ensure the best sourcing solution is adopted by the agency. However, true “competition” can only be achieved when multiple players are competing under a fair and transparent process where performance results expected from the activity in question are clear. The Roadmap to Recovery not only seeks to jumpstart competitive bidding of city services, but challenges the city to improve contract management and oversight. The Roadmap also embraces the notion of “Strategic Sourcing” whereby the purchases by city departments are viewed collectively – with opportunities for savings achieved at a city-wide level. Finally the Roadmap examines ways the city can contract or lease out its existing assets to private operators to produce savings and/or new income streams to provide General Fund services.