Was it smart business and public policy, or just another example of power brokers ensuring that local vendors, people of color, women and employees can’t build wealth?
This is the question that Minneapolis community members and City officials are debating in the wake of a December 2, 9-4 city council vote recommending that the City’s three-year $34 million contract to manage 32 municipal parking ramps downtown be awarded to AMPCO System Parking (headquartered in L.A. and a subsidiary of the huge ABM Industries, Inc.) instead of locally based MPI, an employee-owned company with a majority of women and people of color.
MPI had been awarded the contract, one of the City’s biggest, in the past. Their bid was almost $500,000 lower than AMPCO’s.
“We were very disheartened that we lost the contract,” said Dennis Carter, MPI director of human resources, “because you pretty much gave your all. You saved money, and you implemented things, training for staff specific for the Minneapolis municipal parking ramps. You did everything they recommended.”
As a result, the new company, which is owned by its 400 employees (325, or 81 percent, of whom are people of color), will fold. “The only client we have is the City of Minneapolis,” said Carter. “As a matter of fact, I think it was in our contract that our only client could be the City. On March 31, MPI will close its doors.”
City says decision was fair
“We absolutely stand by our recommendation,” said Mike Sachi, City Parking and Skyway Systems engineer. Sachi helped craft the recommendation in favor of AMPCO that the Department of Public Works gave to the city council.
“We were sensitive to the fact that the incumbent operator and their employee base are locally owned and have many women and people of color,” Sachi said. “AMPCO has said that they will rehire as many of the existing employees as they can. They’ll be holding job fairs and making sure that MPI employees have every opportunity to stay on board.”
Sachi said that this is exactly what AMPCO did last year when they took over parking operations at the airport — they offered every Standard Parking employee (the former operator) a job.
Sachi added that AMPCO is good to its workers. “AMPCO is 40 percent employee-owned, and they do offer reduced stocks for employees. In addition, all of their employee groups are union represented, whereas MPI did not have janitorial and security representation. So there is a huge potential for better wages and benefits for the employee groups moving forward. AMPCO is also comfortable working with the Teamsters.”
Sachi said that 85 percent of AMPCO’s 8,000 employees are people of color and that his department worked with the City’s Civil Rights Department to look at issues of fair representation.
“One of their staff [Roxanne Crossland] was on the evaluation team. She did review the goals and proposals of both companies. One of the issues they were looking at was contracting through women-owned or minority-owned businesses… Both MPI and AMPCO met the goals.”
Crossland was contacted for comment for this story, but she referred this reporter to her boss, Roger Nubby, who in turn referred me to the City’s Communication Department.
Racial representation not the deciding factor
“We were evaluating their proposals based on what we asked for on the RFP [Request For Proposals],” Sachi said. “We were looking at each company’s operations plan, costs and fees. So we weren’t as focused on what the makeup of their employee base was, necessarily.
“Scoring was divided into the three major components: costs and fees, experience and background, operations transition and marketing,” said Sachi. “There was a total of 1,000 points possible. To move on to interview process, proposals had to score 70 percent of possible points.
“MPI and AMPCO were the only two companies that met that criteria. The MPI proposal scored highest on the costs and fees. AMPCO scored higher in experience and background and operations and marketing. Both companies moved on to the interview.
“We asked a number of questions related to proposals and met the interview team,” Sachi continued. “Partially as a result of written responses and partially as a response to interview, we recommended AMPCO. That recommendation was approved by the city council on December 2 and begins to take effect on April 1, 2006.”
AMPCO Senior Vice President Mark Muglich was contacted for comment on the contract, but did not respond by press time.
Vendors of color should watch City closely
Minneapolis Fifth Ward City Council Member Natalie Johnson Lee, who was one of four dissenting votes on the contract, takes an entirely different view of the proceedings.
“There is no reason why MPI shouldn’t have gotten the contract,” said Johnson Lee. “They were the low bidder. For the most part, the proposals were both equitable. The difference was that AMPCO had experience with marketing. But the challenge was that the City had never asked MPI to do marketing. Our style is more like, we’ll tell you what we need you to do and then you do it.
“MPI is a Minnesota-based business, a minority-owned business, an employee-owned business. They had helped build the parking ramp service to where it was; they had been providing good services. Then we bring in a national company. But there was nothing that was to me that great of a disparity that would indicate we needed to change vendors.”
In Johnson Lee’s view, the City is sending mixed messages that could have grave consequences for locally, employee-, and people of color-owned companies. She said, “People are going to have to pay close attention to the contracts that are coming up. This is a contract that minorities already had — one of the largest ones in the city.
“You can frame this in terms of minorities, Minnesota-based businesses; you can frame it in terms of employee-owned businesses. But how are we going to grow local businesses if we bring in outside businesses on big, important contracts like this? What is the message that the City’s really sending here?
“I think minority contractors are going to have to watch the City,” said Johnson Lee. “If nobody’s there to rattle the chain or shake the barrel, we’re going to lose out on a lot of women- and minority-owned business contracts.”