With respect24 to contracting out from departments, I25 113 3/2/11 - LAW & GOV'T - RES. 1008481 don't know whether -- I'm sorry. Is it2 Cassel or Cassel?3
Cassel. I6 don't know whether you're aware of7 departments' requirements to do a8 cost-benefit analysis prior to doing9 either an RFQ or RFP for a professional10 service contract or for any other work11 that we might decide to outsource rather12 than do internally through Procurement or13 otherwise. Is that a requirement to do14 an outside contract, that a cost-benefit15 analysis be done and presented to Finance16 or somebody else?17
No, there is not a18 citywide requirement to do that kind of19 analysis.20
So really21 when a department comes to you with Class22 200 dollars and they want to spend them23 on something that has been appropriated24 by this body and signed by the Mayor,25 114 3/2/11 - LAW & GOV'T - RES. 1008481 there is no internal analysis done as to2 whether or not it is actually cheaper or3 more expensive to hire -- to do this4 internally, whether it can be done5 internally and what the cost benefit is6 of outsourcing that? Is this a fair7 statement?8
No. Well, there's9 no citywide requirement to do that kind10 of analysis, but certainly, as I said,11 there are 2,000, plus or minus,12 professional services contracts let each13 year, and I wouldn't guess what14 proportion of them have that kind of15 analysis to back them up, but, I mean,16 certainly in my years in City government17 both in Finance and in the Managing18 Director's Office and in operating19 departments, I can say that has been20 required many, many times. I mean, it21 absolutely happens. I'm just saying it's22 not a requirement for every contract.23
Please24 provide the Chair with copies of any25 115 3/2/11 - LAW & GOV'T - RES. 1008481 written analysis that was done prior to2 the awarding of the current 2,0003 professional service contracts; in other4 words, whatever kind of written5 documentation you have for that. In6 other words, I'm looking for what exists,7 not for you to go back and create8 something.9 Are you familiar with, to10 Councilman Goode's earlier point,11 something called Philadelphia First12 legislation that has been introduced by13 almost every member of -- co-sponsored by14 almost every member of this Committee?15
Basically it18 would require that when we do outsource19 any contract through Procurement, because20 we have to change the Charter to deal21 with professional service, so22 construction contracts, cleaning23 contracts, et cetera, that 50 percent of24 man hours performed on that contract have25 116 3/2/11 - LAW & GOV'T - RES. 1008481 to be performed by Philadelphia2 residents.3 To Councilman Goode's point, is4 there an objection of the Administration5 to this as an economic development tool6 when -- assuming you've done a7 cost-benefit analysis, assuming it makes8 more sense to go to an outside contract9 and it can't be performed less10 expensively by City employees, shouldn't11 we be hiring Philadelphia residents to12 perform these contracts?13
And,14 Councilman, I think we've had some15 significant large conversations with you16 and your staff about this legislation.17 In concept, the Nutter Administration18 certainly agrees with this legislation.19 We have some concerns about its20 implementation and its legal21 ramifications, and we've made some22 suggestions on ways to amend it that we23 think are more legally defensible. But24 in concept, that's why then-Councilman25 117 3/2/11 - LAW & GOV'T - RES. 1008481 Nutter introduced the LBE legislation to2 begin with. He is a large believer in3 hiring locally to improve the local4 economy, and that has not changed when he5 became Mayor.6
Right.7 There is an LBE preference for contracts8 that are Procurement contracts, which is9 essentially a five percent bid10 preference. What we have proposed in the11 legislation is an amendment to that,12 which actually allows for an opportunity13 for a local contractor, as amended, as14 we've discussed with the Administration,15 to submit with their bid that they would16 match a bid of within X percent of their17 bid, so that it is not done after the18 procurement process but done during the19 procurement process.20
I don't want23 to turn this into a legal debate, but if24 we agree in concept, let's problem-solve25 118 3/2/11 - LAW & GOV'T - RES. 1008481 the solution together rather than what2 we're currently getting from the Law3 Department and others, is this is why we4 can't do it. We always seem to be able5 to find a way to do something when the6 Administration wants to do it. The Law7 Department will go way out there. When8 we're proposing something, Well, I'm not9 sure we can do that. Let's do it and10 we'll wait until somebody sues us and get11 Philadelphians employed.12
And,13 Councilman, to be fair, I certainly had14 said similar things when I was on the15 other side of the street.16
No. In this19 case specifically, we've made significant20 efforts to try and make this legislation21 work. There are -- I think there's --22
Okay. Well,23 I look forward to working with the24 Administration on getting this done,25 119 3/2/11 - LAW & GOV'T - RES. 1008481 because we need to put Philadelphians to2 work.3
There's no4 argument. I think we're willing to work5 with you and your staff to get this6 legislation done. I'm sure there's going7 to be some bumps along the way, but in8 concept, I think we agree.9
I'm aware of10 specific professional service contracts,11 most recently RFPs that went out, that12 did not change the cost structure where a13 law firm performing services for the City14 that opened an office just to perform15 services for us here. Essentially there16 was another RFP put out for their exact17 service, after they had already won, that18 basically said, You don't apply, because19 we're trying to diversify this work. So20 they fired -- the contract for half the21 services was awarded to somebody in New22 Jersey, a very politically connected23 firm, and we lost nine City of24 Philadelphia employees so that a bunch of25 120 3/2/11 - LAW & GOV'T - RES. 1008481 people in New Jersey could have jobs.2 So I don't -- I think part of3 the cost-benefit analysis the City ought4 to do is just that, who is going to5 perform the work, what does that mean for6 us in terms of employing Philadelphians7 every time we outsource also.8
Understood,9 Councilman. And as a whole, I think10 Shelley Smith and the Solicitor and the11 Law Department deserve some credit.12 They've made significant efforts to bring13 that work back inside the Law Department14 and contract out less over the past15 couple years, and those numbers are16 represented in their contract numbers.17
So with18 respect to the fact that there is no19 centralized database of the fact that20 every professional service contract and21 other -- like they're all out there, each22 department is sort of negotiating it,23 creating its own standards, doing its own24 grading, all that stuff, I would echo25 121 3/2/11 - LAW & GOV'T - RES. 1008481 Councilman Kenney's point, which is a2 point that I've made for the last three3 years in budget hearings, that what we4 need to do is have a centralized5 electronic procurement process so that6 every single contract is in one place,7 available to the public, available to the8 stakeholders and unions and everybody9 else who wants to see it, sort of like10 there's a seamless process. Where they11 have actually done this, they have been12 able to save significant amounts of money13 in the administration of contracts, and14 the administration has been far more15 effective and the grades and everything16 else are transparent to City Council, to17 unions, to other stakeholders.18 So this could be done in six19 months. We've been talking about this20 for three years. There's no reason not21 to do this. We have capital dollars to22 do it. There's private off-the-shelf23 software that can be implemented to do24 this. There's Cloud software that can25 122 3/2/11 - LAW & GOV'T - RES. 1008481 manage contracts.2 It's unbelievable to me that3 for you to respond to a Right to Know4 Request, you have to go to each5 department because you don't have copies6 of all the contracts in one central7 place.8
Well, so for9 professional services contracts, all10 those contracts are managed centrally11 through ACIS, the Automated Contract12 Information System. So we do know and13 can produce a report, and we actually do14 produce a report quarterly that's15 available on the City website and is with16 the Department of Records that lists17 every single contract that was active18 during that quarter, the term of the19 contract, the dollar value of the20 contract and any payments made for that21 contract.22
That's all23 dealing with inputs. It doesn't deal24 with how well the contractor performed25 123 3/2/11 - LAW & GOV'T - RES. 1008481 the contract, whether or not we were2 satisfied with it. There's no way for3 any member of the public or Council or4 anybody to know, other than, Hey, this5 money was appropriated, we had this6 contract, we paid these guys.7 So I understand what you're8 saying, but in order for us to perform9 our oversight job and hold people10 accountable for what is over 25 percent11 of the City spend, we have to have a12 better system, and it needs to be13 electronic and it needs to be protected14 so that any changes made, it's clear who15 made them and how we follow it, et16 cetera.17 So if that is something that18 you're working on -- and I know through19 the Private Sector Outreach Board, there20 have been, out of that process,21 amendments proposed to the Charter to22 allow us to use GSA schedules and other23 things. I mean, we're moving in the24 right direction, but the pace of change25 124 3/2/11 - LAW & GOV'T - RES. 1008481 has to speed up.2
Understood,3 Councilman, and we certainly understand4 your frustration with the pace. We are5 moving in that direction.6 Having said that, the systems7 that the Nutter Administration took over,8 we have underinvested in technology for a9 very long time.10
And we11 continue to do so and have for the last12 three years.13
I think the14 Nutter Administration has made a15 significant investment in technology.16
We're going18 to -- we have a commitment to technology19 and we're moving in that direction. It20 has taken longer than we wanted, but I'm21 confident that we're going to get there.22
Right, and23 we're -- I mean, I don't want to preface24 the budget, but I think we're going to25 125 3/2/11 - LAW & GOV'T - RES. 1008481 see a delay in the implementation of2 technology investment.3 So I understand what you're4 saying. It's a great sense of5 frustration to me that it can -- we can6 provide transparency, accountability,7 access to the public and every other8 stakeholder in the City through the use9 of technology. We can create10 efficiencies through the use of11 technology. We can create a fair process12 through the use of technology, including13 the opportunity to have electronic14 notices go to every stakeholder involved,15 unions, allow potential competition by16 them if they want to take over the17 Synagro plant or something, et cetera,18 and we don't do it. The pace of change19 in the City has to change.20 Thanks.21
Thank24 you, Councilman.25 126 3/2/11 - LAW & GOV'T - RES. 1008481 Before I recognize Councilman2 Jones, if I can just say to the3 Councilpeople -- and I said this to4 Councilman Goode -- I know you're asking5 for a lot of information. If you can get6 me a list of what you're requesting, if7 you can get me a list of what you're8 requesting and maybe a timeframe that you9 think is reasonable to follow up with the10 Administration so you could get it to me,11 or even better, Ms. Marconi, who is way12 more organized than me.13 So saying that, Councilman14 Jones.15 COUNCILMAN JONES:16 Mr. Chairman, again, thank you and the17 Committee for the dialogue which was18 started today.19 And I want to say to the20 Administration, to the respective unions,21 this is an opportunity. This is an22 opportunity for us to create a win, win23 and win scenario, that we win by24 utilizing Philadelphia-based companies,25 127 3/2/11 - LAW & GOV'T - RES. 1008481 we win by utilizing Philadelphia-based2 workforces when cost effective. The3 taxpayers win when we constantly create a4 vigilance over our spending.5 If nothing else we've learned6 in this crisis is that we have to do7 this. I mean, it's a concept that's time8 has come. And, yes, there are9 procurement laws on the books, there are10 contracting-out laws, but if we're not11 monitoring what the net impact to our12 budget is on this, then we're missing13 again an opportunity.14 I think that the Private Sector15 Task Force can be a part of the16 discussion, along with the unions. What17 I've heard over and over again in the18 testimony is that that exchange of19 information, that exchange of data to20 make good decisions, is not happening as21 much as it should.22 We've brought this process up23 in our budget negotiations and budget24 deliberations in past years, and each25 128 3/2/11 - LAW & GOV'T - RES. 1008481 year we've kind of presented it to the2 Administration as something we should do,3 but we're at the point of demarcation4 where we're going to insist upon that.5 We're giving you enough of a head-start6 opportunity to be able to give us that7 analysis and to afford to do some good in8 our budget deliberations.9 Mr. Abernathy, you're an10 alumnus of this body. I saw Councilman11 Kenney look at you in fond admiration as12 you gave your testimony. You know how we13 think. Unfortunately, you know how we14 think. So to be forewarned is forearmed.15 We're going to look at this. This issue16 is not going to go away.17 I saw members of the Committee18 writing down notes and talking about19 possible legislation that may be20 introduced, and I'm thinking that this is21 a good beginning dialogue and let's not22 waste this opportunity.23 Thank you, Mr. Chairman.24
Thank25 129 3/2/11 - LAW & GOV'T - RES. 1008481 you, Councilman.2 And before we conclude, I just3 wanted to bring up the subject that I4 think both unions brought up, and,5 Mr. Abernathy, you may not have the6 ability right now to comment, but there7 seemed to certainly be a concern that8 there was not, to use Councilman Jones'9 term, the dialogue that was kind of10 needed, because obviously all these folks11 have a lot of knowledge, and the more12 knowledge exchanged, maybe the better13 results.14 So, again, I don't know if you15 have a comment on that, if you can16 comment. I know you may not have been17 involved in this, but it does seem to be18 that real concern of the exchange of19 ideas or the consideration of those ideas20 aren't taken seriously enough. And I21 don't know if that's fair or not, but22 it's out there.23
You know, I24 don't know the specifics of these issues,25 130 3/2/11 - LAW & GOV'T - RES. 1008481 but I can say that I think we have the2 best workforce in the world. I think3 Philadelphia workers make this city run.4 The Nutter Administration recognizes that5 and we appreciate it.6 On these issues specifically7 and the conversations with management, I8 don't know the circumstances. I'm happy9 to raise it with the commissioners and10 the deputy mayors and find that out.11
If you12 could. Because I think that's important,13 because the more ideas exchanged, I think14 the better. That's what we're doing15 today. But obviously I'll openly admit,16 Cathy Scott and Bobby Davis and all those17 guys, they know more than we do about how18 these departments run and they have the19 experience. So I think including them --20 I'm not saying they haven't been, but21 there seems to be concern they haven't22 been included enough.23
Okay. No25 131 3/2/11 - LAW & GOV'T - RES. 1008481 other questions.2 Anybody else here would like to3 add any testimony or words?4 (No response.)5
Let me6 just say, the record will remain open for7 the information that has been requested8 by the members, and I think there's quite9 a possibility we may be convening again10 to talk about this subject.11 Sir, you wanted to say12 something?13 If you're going to say14 something, you got to say it up here.15 Otherwise, the stenographer can't hear16 your fine words there.17 (Witness approached witness18 table.)19
My name is20 Carlton Sampson, District Council 47.21 I was really involved with the22 crunching of our numbers, and I just23 wanted to put out here that it's really24 important that if we can get this stuff25 132 3/2/11 - LAW & GOV'T - RES. 1008481 all at once -- they mentioned ACIS. One2 of the things that I found with ACIS is3 that it helped me find out what contracts4 they did not give me, which then sent me5 out trying to find more contracts. We6 spend more time trying to get the data7 than we do actually analyzing the data.8 And Councilman Green is not here. I9 think it was Councilman Green who talked10 about the need for technology. Well, as11 you talk about the City jobs and things12 that we can do, what they're doing to13 satisfy that need for technology is14 creating more and more exempt positions.15 For some of these positions, it's work16 that the City workers are already doing,17 and because we could not get that data in18 time to crunch it to put it together like19 we did the health data, we weren't able20 to put that forward today, but we're21 hoping that you guys do provide us with22 that data. We can crunch those numbers23 down for you in time for this budget24 process.25 133 3/2/11 - LAW & GOV'T - RES. 1008481
That's a2 good point. Obviously when we get that3 information, we need to talk to you4 folks, too. So that dialogue goes in a5 circle, I guess is the best way to say6 it.7
Thank10 you. Thank you for your comments.11 Anyone else?12 Louise, I knew you couldn't13 help yourself.14 (Witness approached witness15 table.)16
Please17 identify yourself for the record. And18 you're the smart one. You got gloves on19 in here. It's kind of cold in here.20
My name is Louise21 Carpino. I represent the probation and22 parole workers and other professional23 court employees, AFSCME Local 810.24 I have a question about the25 134 3/2/11 - LAW & GOV'T - RES. 1008481 City contracting with companies that are2 privately held, so that the taxpayers3 cannot know who is benefiting from the4 profits that they're making off the5 taxpayers' investment. And I was just6 wondering what Council's position on that7 was.8
When you9 say "information," just be a little10 more -- what are you looking for? What11 are you trying to get?12
Well, for13 instance, to offer an example, Aramark14 Corporation went private in 2006, and now15 there's no way to know who any of the16 shareholders are. I mean, you can go17 back and look at the companies that18 merged with it in '05 and '06 and see who19 the shareholders were then, but once the20 company is privately held, you're not21 allowed -- I mean, there's no way to go22 on the SEC website or anything and for23 the taxpayers to know who is profiting24 off this company. And that's a huge25 135 3/2/11 - LAW & GOV'T - RES. 1008481 contract, the Aramark contract with the2 prison food and the commissary, and all3 you can know is who the president is.4 And I just find that -- I'm wondering5 what Council thinks about that, and if6 there's any other contracts with7 companies that are privately held that8 the taxpayer is paying but can't know who9 is profiting from.10
To be11 honest with you, I don't have an answer12 for you right now. I think we have to13 take that under advisement, discuss it14 with each other and try to figure that15 one out. I'm not sure. I'm sure there's16 legal ramifications. I'm just not sure.17
Thank22 you, Louise.23 Anybody else who would like to24 testify?25 136 3/2/11 - LAW & GOV'T - RES. 1008481 (No response.)2
Hearing3 none, the Committee on Law and Government4 will stand in recess.5 Thank you.6 (Committee on Law and7 Government recessed at 12:10 p.m.)8 - - -9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 137 1 CERTIFICATE2 I HEREBY CERTIFY that the3 proceedings, evidence and objections are4 contained fully and accurately in the5 stenographic notes taken by me upon the6 foregoing matter on March 2, 2011, and that7 this is a true and correct transcript of same.8 9 10 11 12 --------------------13 MICHELE L. MURPHY14 RPR-Notary Public15 16 17 18 (The foregoing certification of this19 transcript does not apply to any reproduction20 of the same by any means, unless under the21 direct control and/or supervision of the22 certifying reporter.)23 24 25