VOLUME I COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COMMITTEE ON PARKS, RECREATION & CULTURAL AFFAIRS - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, October 17, 2001 10:15 a.m. - - - RESOLUTION 010533 - Authorizing Committee on Parks, Recreation, and Cultural Affairs to hold hearings on the NeXturf procurement for Veterans Stadium. - - - PRESENT: COUNCILWOMAN BLONDELL REYNOLDS BROWN, Chair COUNCILMAN RICHARD T. MARIANO, Vice Chair COUNCILMAN JAMES F. KENNEY COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO COUNCILMAN MICHAEL A. NUTTER COUNCIL PRESIDENT ANNA C. VERNA COUNCILMAN ANGEL L. ORTIZ COUNCILWOMAN JANNIE L. BLACKWELL - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center Plaza, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 I N D E X RESOLUTION 010533 Greg Grillone, Director, Veteran's Stadium------ Richard Tustin, Director, Capital Programs 6 Office--------------------------------------- 6 Christopher McCabe, Esq., Representative, Law Department----------------------------------- 44 Ruben Amaro, Assistant General Manager, Baseball Operations, Phillies------------------------- 65 Reeder Fox, Esq., Counsel for Ewing, Cole------- 83 Pradeep Patel, Senior Vice-President, Ewing Cole------------------------------------ 90 - - - 3 RESOLUTION 010533 - 10/17/01
Good morning. The City Council Committee on Parks, Recreation, and Cultural Affairs is now in a Public Hearing to hear testimony on Resolution 010533. Joining us at this Committee hearing are City Council Members Frank Rizzo, Councilman Mariano, Madam President Verna, myself Councilwoman Blondell Reynolds Brown, Councilman Angel Ortiz, Councilman Jim Kenney, and Councilwoman Jannie Blackwell. We want to ask the clerk to read the Resolution 010533. The clerk will now read the title of the Resolution.
Resolution 010533, a resolution authorizing the City Council Committee on Parks, Recreation, and Cultural Affairs to hold hearings on the NeXturf procurement Veteran's Stadium, as to whether the procurement of a new playing surface was needed, whether the procurement process by which the decision was made was appropriate, and whether the NeXturf problems have been adequately addressed, as well as reviewing and evaluating the City's sole-source bidding process and policy.
This is an opportunity for 4 RESOLUTION 010533 - 10/17/01 us to gain some insight, better understanding, into the procurement process, particularly as it relates to sole-sourcing. And so that's the broad question we will be looking to and we move through these proceedings. We want to can the sponsor of this resolution, Councilman Frank Rizzo, to provide us with opening remarks.
Thank you, Madam Chair. President Verna, thank you for joining us this morning here. Again, I would like to welcome everyone here this morning. And my objective is to walk through this entire process from the very beginning. And we are going to ask the Recreation Department to come to the witness table. And we would just like to go through the entire process on how we got where we are today on the actual decision to replace the existing playing surface prior to the product that we are -- that we have in Philadelphia Veteran's Stadium right now. So that obviously is very important to talk about, the process that was utilized to make the decision to replace the playing surface. 5 RESOLUTION 010533 - 10/17/01 And then we are going to talk briefly about some of the problems associated with it. And the city controller's office is here today. And the city controller, or the City Solicitor, has asked us to try our best to avoid, because there is the potential of a lawsuit involving the problems associated with the change-over and the cancellation of the preseason game. So we will stick pretty much to the information that the controller has already developed and identified. So, Madam Chairman, if we could bring the first group to the table, it would be appreciated.
Please allow me to acknowledge, joining us is City Councilwoman Marian Tasco, also a member of this committee. Please come forward Recreation Department; Veteran's Stadium Director, Greg Grillone. First panel will also include capital Programs Office, Richard Tustin, Director; and John Starkey, Project Manager. Also joining this panel will be a representative, the Senior Vice-President for Ewing, 6 RESOLUTION 010533 - 10/17/01 Cole, Cherry & Brott, Mr. Patel. And finally on this panel will be Phillies representative Ruben Amaro. We will need each one of you, before you speak, to state your full name, for the record, the department you represent or agency you represent, and then proceed with your testimony. GREG GRILLONE: My name is Greg Grillone, G-R-I-L-L-O-N-E. I am with the Recreation Department and I am the stadium director. THE CHAIRWOMAN: Please proceed with your testimony, sir.
I don't have any prepared testimony. THE CHAIRWOMAN: Any of those names I called have testimony, before we proceed to questions? Please. RICHARD TUSTIN: My name is Richard Tustin, and I am the Director of the city's Capital Program Office. Good morning, members of City Council, Committee on Parks, Recreation, and Cultural Affairs. In July of 2000, the Capital Program 7 RESOLUTION 010533 - 10/17/01 Office was asked to oversee a contract with Ewing, Cole, Cherry, Brott to assess the physical conditions of Veteran's Stadium. Under a lease agreement with the Phillies and the Eagles, the city is required to keep the stadium in a, quote, good and suitable state and condition for use intended and to be made the same, making all such repairs to, restoration and replacement of the structures, other improvements and equipment thereof and therein, and that may be required from time to time. The assessment report would allow us to evaluate and prioritize items that required repair or replacement. The field turf was last replaced in March of 1995 and its condition was a major concern for both teams. A G-max test, which is a measure of the shock absorbancy of the turf itself were performed on the turf in 14 locations and yielded readings from 95 to 242. In order to put these numbers into perspective, natural grass has a G-max or a shock absorbancy of 70. That's plus or minus, it is 65 to 8 RESOLUTION 010533 - 10/17/01 75. Ratings of 130 to 150 result in a noticeable decrease to the shock absorbancy of the field by the players. And G-max ratings of over 150 indicate a very hard surface which would be found to be objectionable by almost any sports player. 9 of the 14 test areas, or 64 percent, taken at the stadium fell within the 130 to 150 range, and one rating was as high as 242. The firm of Ewing, Cole, Cherry, Brott had been used by the Department of Recreation for stadium projects.
Excuse me. Talk into the mike. I am having a problem hearing.
The firm of Ewing, Cole, Cherry, Brott had been used by the Department of Recreation for stadium projects over the last ten years. The project director, Mr. Pradeep Patel, worked on the original Vet Stadium turf installation while working for the firm of McCormick, Taylor, and the replacement fields both in 1987 and 1995 while working with the firm of Ewing, Cole, Cherry, Brott. 9 RESOLUTION 010533 - 10/17/01 Because of his and his firm's past experience on these type of projects, their history with the Department of Recreation and the sports teams, the Capital Program Office requested a proposal from them to research, evaluate, design, and oversee the construction of the new field surface. In October of 2000, Ewing, Cole, Cherry, Brott submitted their field turf evaluation report, which was reviewed at a meeting on October with 12 representatives of the city's Finance Department, 13 the Department of Recreation, the Law Department, 14 and Procurement. 15 On October 19, the Capital Program 16 Office, Ewing, Cole, Cherry, Brott, the Phillies, 17 and the Eagles met to review the report. As a result of these review meetings and responses to followup questions --
Excuse me. Will you repeat that. Capital Program Office --
The Capital Program Office, the firm of Ewing, Cole, Cherry, Brott, the Phillies, and the Eagles met on October 19 to review the report, which was two days after we reviewed it 10 RESOLUTION 010533 - 10/17/01 internally with various city departments.
Correct. As a result of these review meetings and responses to some followup questions by the teams, all agreed that only the NeXturf product met the unique characteristics of the stadium. The design documentation was completed by Ewing, Cole, Cherry, Brott, and the project was bid as a sole-source in November of 2000. The contract was given a Notice to Proceed on November 21, 2000, and the installation was completed in time for the Phillies' home opener on April 6, 2001. Thank you for allowing me to provide this testimony, and I will be happy to answer any questions at this time.
Mr. Grillone? Councilman Rizzo, you want to speak with whom? 11 RESOLUTION 010533 - 10/17/01
The question I would like to ask, the statement also I would like to make, is that the turf that was described of being in the media as the worst playing surface in the league, was that a Southwest product that was there?
At some point there was maintenance on that Southwest product required to meet the terms and conditions of the lease. I understand that there was approximately between 30 and 50 thousand dollars, and apparently there was a communication, to Southwest to make certain repairs. And it was submitted that the repairs would cost between 30 and 50 thousand dollars; is that correct?
That was on the high end. But there were some repairs that were needed to, my 12 RESOLUTION 010533 - 10/17/01 recollection is, involving some of the zippers that hold some of the pieces in the enzone together, as well as some tears that needed to be addressed.
Well, if that was on the high end, can you tell me how much -- I believe that there was a letter or a request through the procurement department to make those repairs. How much were the repairs going to cost the City of Philadelphia to make the playing surface conform to the terms and conditions of the lease?
My recollection was that the purchase order was a not-to-exceed number, I believe, of $25,000.
Yes. What happened was, when we finally reached a number, which I think was 13 RESOLUTION 010533 - 10/17/01 a not-to-exceed of 25,000, they sent us a communication that said, you know, they would make the repairs, and we would schedule when that would need to be done. And that if in fact subsequently we chose a Southwest product to replace the field, that they would not charge us for those repairs.
The product was a Southwest product, was five years into a warranty period of seven, eight years? How many years was the product warrantied?
The warranty was eight years, Councilman. And we actually had six full playing years on that particular field. And that was not unusual, you know, to make a decision to replace a field before the actual warranty period had reached its full term. We had done that in the past.
The deficiencies or 14 RESOLUTION 010533 - 10/17/01 the repairs that were required, I understand that they were not part of the warranty that was associated with the playing surface, that's why they indicated that there would be a potential, on the up side, $25,000 to make the repairs? Why weren't those repairs under the warranty?
They were conditions that were related more to wear and tear, and not necessarily, you know, defect of the product. So it wasn't covered under the warranty. Things such as zippers are things that -- the turf people can talk more about it. But I think it is known that there is a certain useful life of those particular components, which is much less than the warranty for the fabric or the turf itself and its pad system.
Was Southwest the only company that could have made repairs to this surface? Would other companies have the ability to make those repairs and have the opportunity to say, We are not going to charge you if we get the deal. But if we don't charge you, you are going to 15 RESOLUTION 010533 - 10/17/01 get a bill -- if we don't get the deal, you are going to get a bill?" Could somebody else have had that same opportunity?
I don't know, Councilman. All I will say is that I have been at the stadium since 1984. And every time there was a need for repairs, we have always contacted and had the actual manufacturer of the product make the repairs. In this case, throughout the life of the stadium, it has always been a Southwest or one of their, you know, preceding companies, either Monsanto or AstroTurf.
The statement was made that the performance of the playing surface left a little bit to be desired, whatever the word you used, about the amount of cushioning in the product. If this product, in your opinion, you had problems with this after the six playing seasons, were you satisfied with the performance of Southwest product that was there? Were you pleased with the product that was there, when it was in its sixth year? 16 RESOLUTION 010533 - 10/17/01
I thought the product was okay. But obviously we had -- I don't want to say, "we." I mean, the city had embarked upon an evaluation of the stadium as a facility and what things would need to be repaired or replaced in the succeeding years throughout the life of the building. And I felt with the advent of the new turf systems and with the complaints that we had gotten -- a lot of which I will admit I believe is perception, but nevertheless, we continued to get complaints about it -- and the threats of lawsuits and whatnot, I felt that the turf system should be an item that should be replaced.
My final question, at least in this go-around, after the repairs were made to the existing surface prior to this product being put in, this newer Southwest product being put in, after the repairs were made, did the playing surface meet the terms and conditions of the lease? If you are a landlord and your tenant comes and says, "I don't like the color of the carpeting in the hallway. Would you change it," I 17 RESOLUTION 010533 - 10/17/01 don't think too many people that are landlords would do that. As a landlord to the Phillies and Eagles, after you have spent, which you really didn't spend -- and I think I am going to have some additional questions about the appropriateness of that transaction, where a vendor can come and say, "We won't charge you, if we get the deal. But if we don't, we will." I have a little problem with that. My question to you, after you made the repairs, did the playing surface meet the terms and conditions of the lease?
Councilman, you know, I am not a lawyer and I am not going to answer a legal question. But in my mind, in terms of the functionability of the surface, I mean, I thought it met -- it was a playable field. But that didn't mean that, as I said earlier, with the advent of the new systems and with the discussion about a blueprint in terms of what components of the stadium could or should be replaced in the succeeding years, I truly felt that the turf system should be one of those items. 18 RESOLUTION 010533 - 10/17/01
I can understand that. But, again, my question is -- you don't need to be a lawyer; you are the director of the stadium -- after you made the repairs to the playing surface, you said it was a playable surface. I need you to answer the question. Was the playing surface repaired? And after those repairs, did your tenants have the ability to challenge you and say that this repair, this playing surface, is not acceptable, that it doesn't meet the terms and conditions of the lease? Yes or no. 15
No. I think it met the terms and conditions of the lease. Yes.
Thank you. We spent millions of dollars, millions and millions of dollars, trying to project an image of Philadelphia as a come-to destination. And over the last eight years we tried to project an image of competence. Of, in essence, trying to get away from that W.C. Fields image of 19 RESOLUTION 010533 - 10/17/01 many decades. On August of this year, that millions 4 of dollars were really fritted away on national TV, 5 on all the morning programs, in every sector of the 6 country, newspapers and so on. 7 Millions of dollars that the city spent 8 on trying to rebuild this image really went down the 9 tubes. And we still have not received an adequate 10 explanation for it. 11 You said that Capital Program, Ewing, 12 Phillies, and Eagles met to review a report produced 13 by Ewing. And out of that you decided to sole-source the bidding process, or to shortcut the bidding process and sole-source it out to -- what is it called? -- Southwest. Right?
Councilman, we were not trying to short-circuit any standard city process. What we were trying to do is --
I asked whether out of that meeting with Ewing, and out of that report, you guys decided, the city decided, to sole-source the process?
I don't know if the meetings we had with both city departments and agencies and the followup meeting with the teams, where we reviewed the report and the products available --
Hold on just a second. I am waiting for the fire alarms to go. Go ahead.
Again, out of the meetings we had both internally with the different departments, procurement being one of them, and also the meetings we had with both teams, and the fact that we reviewed the reports, we reviewed the products that were given to us as possible replacements, and also knowing the unique construction of that stadium and how it is used, it was the decision of all of us, jointly, that the NeXturf product seemed to be the only product that met the requirements for a new field. That decision or recommendation was 21 RESOLUTION 010533 - 10/17/01 stated at a meeting on October the 17th, at which point in time the Procurement Commissioner, who was present, also agreed that the correct method of proceeding would be through a sole-source bid.
So on October 17, relying on the report by Ewing, you decided to recommend to the Procurement Commissioner that he go with Southwest and make Southwest the only company to bid for this project?
No, Councilman, that's not what I said. What I said was, on October the 17th, we reviewed the report that was provided to us by our professional consultant, who was paid to go out and evaluate several products and to come back to us with their recommendation of a product or more than one product that could meet our specific needs.
Yes, they did. In fact, if you would like, I would like to read an excerpt from an article that was in the --
Just a question, that's all. We are trying to find out certain things here. I just want to know how the process got to the point in which we went with only one company bidding for this project. So you had the meeting. The Phillies and the Eagles were involved in the decisionmaking --
I wrote a letter of justification, why we recommended that the product be -- why the project proceed as a sole-source bid, which is standard.
Do you have a copy of that letter? 23 RESOLUTION 010533 - 10/17/01
Could you make a copy of that letter available to this committee?
Could you state the reasons that you stated in the letter to Mr. Applebaum?
I can try to summarize what I said. Because I don't have the letter, and it was written a while ago.
I will. I believe the justification was that, due to the nature of the stadium, the fact that it was a multi-purpose stadium; the fact that it was used by more than just the sports teams, for other events as well; the fact that we had a substrate under the new turf or under a turf that we were not about to change because that would have involved ripping up everything, all the way down to the stone and the drainage system below; due to the fact that we were told that our bleacher system, the seating 24 RESOLUTION 010533 - 10/17/01 system, had certain restraints on what it could be pulled out over -- and the thickness of the product seemed to be a major issue in all of these -- that it was our recommendation that the NeXturf product was the best product and the only product to use for this particular project.
Did the Phillies at any moment divulge that they had a relationship with Southwest at that time?
Did they say that their practice field was, how you call it, the surface of the practice field in Florida, was done free of charge by Southwest?
But they were part of the decision-making process of this bid?
So then Mr. Applebaum received your letter and you made a decision? 25 RESOLUTION 010533 - 10/17/01
After. You relied totally on that report, and you made no further inquiries?
The basis of the decision was the report and the testing that was done of the field. Were there any companies that came in to Mr. Applebaum after our justification letter? I believe there were. I believe A field Turf product came in.
You didn't have a business relationship with Southwest?
Do we know whether Ewing had a business relationship with Southwest?
It goes to whether they are going to a company they already have business with.
I understand that. The Capital Program office had no 8 knowledge of it. To my knowledge, no other city department or agency had any knowledge of any relationship between Ewing, Cole, Cherry, Brott and Southwest Recreation.
Allow me first to acknowledge and say thank you to Councilman Michael Nutter for joining these proceedings. Point of order, Councilman Rizzo?
Point of order. For the record, I have two memos. I would like to point out two memos to Mr. Tustin that I was prepared to discuss with the Procurement Commissioner. There is a memo dated December 7, 2000, where the City Solicitor's office asked the procurement department about this document that you 27 RESOLUTION 010533 - 10/17/01 just referred to. And I won't read the entire memo, but I will read, the traditional sole-source justification memo was not prepared for this project. Then on September 21, September 21, 2001, again a letter from the Deputy Procurement Commissioner, to the Procurement Commissioner, explaining the rationale behind the sole-source. And I will read this quickly. "The decision to award a sole-source contract for Veteran's Stadium playing surface was made as a result of an engineering study conducted by Ewing, Cole. On October 17, 2000, a meeting was held with the Capital Programs office, Recreation Department, Finance Department, Procurement Department, and representatives from Ewing, Cole. At that time discussions were held on the engineering report and it was concluded that the only viable option for the playing field was the NeXturf product." "Viable," again, I'm not sure. I don't know too many engineering studies that come to a conclusion and use the word "viable." But, okay. "Of the playing field was the NeXturf product. Based on that, the capital programs office 28 RESOLUTION 010533 - 10/17/01 prepared a sole-source bid to purchase the playing surface from Southwest Recreational Industries." And this, again, this memo is dated September 21, 2001. And when the City Solicitor was trying to gain information for obviously preparing for some issue, this particular memo from the Deputy Procurement Commissioner indicates that there was no 9 traditional sole-source justification memo for this project. Are you aware of that?
I am not aware of either one of those memos, Councilman Rizzo.
No, I am not aware of that. Traditionally what happens in our office is that, when we do make a request for sole-source -- which is a rarity, I must say, we don't do it very often -- we have a standard form memo that we use. Part of that form memo that goes to the Commissioner, the first part of it, is justification. The justification is filled out, which identifies why -- what our reasoning is for 29 RESOLUTION 010533 - 10/17/01 requesting a sole-source bid. And that memo is usually sent, signed by me, and forwarded to the Procurement Commissioner. I understand the Procurement Commissioner hands that to his Deputy Commissioner to review and also confirm. But I will let the Procurement Commissioner decide or tell you what is done in his office.
Good morning. Thank you. What other cities have used this NeXturf? Are there other stadiums in this country that used the NeXturf?
I believe there is. I believe I have some information right here. The NeXturf installation is right now at the Atlanta Falcons football club in Atlanta Georgia; Jack Russell Stadium, which is the training facility in Philadelphia; the Addison Stadium, which is at University of Oregon; PGE Park, which is the City of Portland, Oregon; Waldo Stadium, University 30 RESOLUTION 010533 - 10/17/01 of Western Michigan; Glass Bowl, University of Toledo; Owasso High School baseball infield in Owasso, Oklahoma, I guess that is; Wissahickon School District Stadium field in Ambler, Pennsylvania; the Rainier Beach High School baseball and softball infield, Seattle, Washington; Soccer Loft, indoor soccer, Grand Rapids, Michigan; and Sports Town Indoor Soccer in Macon, Georgia.
But no other professional stadiums, except the one you named.
Did you know this information prior to the bid being awarded to this company? And did you all check to see if those high schools or colleges had problems with the material?
As part of the evaluation process, there were actually site visits to look at the different products. There was a group that went to Atlanta Falcons' football club in Georgia. That group consisted of members of the Eagles and the Phillies, 31 RESOLUTION 010533 - 10/17/01 as well as our consultant, Ewing, Cole. And Mr. Grillone, who was the stadium manager, also went to that site visit. Not only do I they believe they talked to representatives of the Atlanta Falcons, but I also believe that the Phillies had several members of their team perform some normal exercise, including batting and running, on the field surface, so that they were comfortable with the product.
Did the Atlanta Falcons report that there had been any problems with the NeXturf?
To my knowledge, no. But I was not at the site visit. Greg, do you have any answer to that?
Quite the contrary. They were quite pleased with the product and the results that they had experienced so far. It was a relatively new installation. But, to that point, they were more than satisfied and thoroughly pleased.
Indoor. It is an indoor 32 RESOLUTION 010533 - 10/17/01 practice facility.
It is an indoor practice facility. But it is not a playing field, outdoor playing field, where there is a lot of wear and tear?
It is a practice, football practice, facility, right. The Falcons play in the Georgia Dome.
So we don't have any professional stadium in the United States that uses this NeXturf?
Not at that time, no. 19 There were none at that particular time.
Given the history and the problems we have had with our stadium, and the reputation of our stadium, did you think to take the opportunity to investigate all kinds, different kinds, of turf, so that we could be on the cutting edge or provide the best product for our stadiums? 33 RESOLUTION 010533 - 10/17/01
That was what the consultant did. And, for me, it is a real personal issue. And obviously it is my building and I care about it. And I put a lot of blood, sweat, and tears into the place. And that was exactly the feelings that I had, that that's why I wanted the turf replaced, quite frankly.
Mr. Tustin, I know this is a sole-source contract, but what role did MBEC play in this? Did they have a role or were they required to have a role? Are they supposed to have a role in the selection process?
On most of our projects that we do -- well, you are asking specifically about this project. Because this was a sole-source, one manufacturer would make the product and that same manufacturer installs the product, it is not done through an outside contractor. It is a manufacturer manufactured and installed product. I don't believe MBEC did play a role in this particular project. 34 RESOLUTION 010533 - 10/17/01
Does your office take a proactive role, or a proactive stance, to see that MBEC plays a role in the selection process?
Yes, Councilwoman, we do. In fact, every year when we put together our projects that will get submitted to the city Planning Commissioner for capital funding, we meet with representatives of the Minority and Business Enterprise Council, we review every one of our projects that we anticipate putting out for professional service, we discuss which projects are best suited for minorities, women, disabled. Several of our projects we put out as 100 percent minority MBEC, as opposed to portioning off portions of it. To summarize, we play a very active role with MBEC in all the projects we do. And I think our department probably has one of the highest percentages of most of the city agencies that do professional services contracts.
Is there any time that you have discussed with MBEC the need not to have minority participation in a project?
Yes, Councilwoman, there 35 RESOLUTION 010533 - 10/17/01 are. On occasion, if in fact we feel there is a project that's somewhat unique and we discuss with them the fact that it is unique, whether it be -- I will use an example, a building automation system that may only be manufactured by three or four companies in the country. We will talk about that issue with the Minority and Business Enterprise Council and tell them of what our concerns are and what we think the limitations are. And we don't do anything without them concurring, agreeing with us, or not agreeing with us. Most of the times they agree with us.
What special skills or special qualities did this company have that you selected for this --
Well, as I said in my opening testimony, when the Capital Program office was first brought into the project -- in the past, the Department of Recreation would have handled these projects. But we were brought into the project in July to oversee it I think because it was such a large project. The firm of Ewing, Cole, Cherry, Brott had already done work for the stadium and the Department of Recreation over the last ten years. So they were very familiar with the stadium itself not only as a firm, but their individual project people were very familiar with the stadium and the unique characteristics of the stadium. We also know that that particular firm has done sports facilities around the country and, in fact, I believe oversees, as well. And the Capital Program office, I should say, has used that company in the past on other projects for other city departments and agencies. So we were familiar with their qualifications and the fact that they were already on board to do the assessment report, that the Department of Recreation had already used them for 37 RESOLUTION 010533 - 10/17/01 the last ten years, on all sports-related projects, including replacement turfs, in the past, it was our opinion that they were a very good choice to do the design of the field turf project.
But if you used the same company for ten years, and you don't go out and seek bids from other companies, how did you know you were getting the best price for your dollar? I mean, it is nice to develop relationships and have people do the work. But how do we know what we are paying for? What price comparisons do you use to make that selection? THE CHAIRWOMAN: My followup would be, at what juncture do you review a sole-source bid? I have heard three times, because I wrote it down, over the last ten years. So what juncture is that sole-source bid reviewed to point to the issues raised by Councilwoman Tasco?
Because the other issue around that is, once the relationship is developed, it doesn't give other companies an opportunity to come in and bid on the work; it doesn't give other companies the opportunity -- we don't know what other companies are out there, you 38 RESOLUTION 010533 - 10/17/01 don't know what other companies are out there. We don't know if the other companies have a better track record in terms of their minority requirements, and we don't know what kind of employees they have.
Correct. Let me try to explain that by explaining a little bit how the Capital Program Office normally does a selection of a design professional for any project we do. Not necessarily the stadium turf project, but for any project in general. We do project management for 14 different city departments and agencies at this 15 time. We have a database of over 200 design and engineering and related firms that we keep in our computer. We meet regularly with firms that either solicit us directly to do projects for the city or firms that have gone to Minority and Business Enterprise, and they have sent over a letter to us saying, "We have a new firm. " And we meet with those firms on a regular basis. 39 RESOLUTION 010533 - 10/17/01 Every time we do a project, any kind of a capital project, it is our policy to go out and solicit Requests for Proposals, RFPs. We usually go out to, at minimum, five firms, on every project we do, asking for them to give us a proposal to do the work for us. The Requests for Proposal we send out gives a brief synopsis of the type of work that's involved, the agency who the work will be being done for, the scope of the work, and also what we think the project budget of the job will be. Those five firms will then solicit or submit to us proposals. Those proposal are evaluated by not only people from our office, but also representatives of the department we are doing the project for, whether that be the Police Department, the Fire Department, the Health Department. We also have on our evaluating committee a member of Minority and Business Enterprise Council. They sit on the evaluation committee, as well. We require that the firm's proposal include in a separate envelope, sealed envelope, 40 RESOLUTION 010533 - 10/17/01 their fee, their proposal fee, to do the job. We do not open that letter with their fee proposal until after the review has been done of the technical qualifications of the firms that are submitting proposals. That evaluation is done by at least a five-member committee. And a recommendation, based on their technical capabilities, is then -- we create a rating system and we put who we think is the best technically qualified to do the job, down to the lowest technically rated. Only after that do we open the letter that tells us what the fee is for that particular project. Now, when we develop a budget, project budget, for any project, we have to include in there what we believe the construction costs will be; any special testing that may be required; the costs of any special testing that may be required to put a proposal or design together; as well as an estimate of what we think the design fee should be, what we think a fair price would be, for any firm to do that job. If it is a small project, like a roof 41 RESOLUTION 010533 - 10/17/01 replacement or a low-cost project, we estimate that a fair fee for that could be in the neighborhood of percent of what the construction value would be. 5 On larger projects, that percentage goes 6 down. So it is not a fixed number. 7 So we have, based on a project by 8 project, an idea as to what we think the design fee 9 should be, what we think a fair price would be to do 10 that work. So that at the end of the review of the technical portion and we open those letters, we look at those fees. We then put the fees next to the firms and how those firms have been rated. A professional service contract is not a low-bid contract. We have the right to select a firm that may not give us the lowest possible fee. But what we do do is, we look at the fee and compare that against what we feel the fair fee should be. And if in fact the design firm's fee is higher, we will go back and negotiate with that firm to have them reduce their fee down to what we believe is a fair price to do that work for us. So our first and primary concern is 42 RESOLUTION 010533 - 10/17/01 getting a company that is most technically qualified to do the particular type of work that we look for.
Let's just go back. And thank you for all that information, but how do you come to five companies? What if you had companies? You only 8 select five of those companies? Why don't you 9 request all 20 companies to submit the proposal? 10
Because the five 12 limits the amount of people that can participate and 13 it limits your ability to see what more companies 14 can offer. 15
It is a minimum of five 16 companies. 17 Depending on the projects and the review 18 of our database and the information provided to us 19 in their office portfolios of the type of work they 20 have done in the past, we will select more than five. The five is a minimum that we usually go to. We have had as many as 10 and 12 and 13 firms submit proposals. We do try to look at our database and identify all the firms that have the capability to 43 RESOLUTION 010533 - 10/17/01 do a project before we decide how many firms to solicit and send RFPs out to. So it is not just five. It really does depend on the type of project we are doing. And I must also say that when we do send information to MBEC, and we tell them the firms that we have looked at and that we want to invite to the project, there are many, many occasions where they will send us a letter back saying, "We would also like you to include some other firms." And we, as a policy, always include those firms.
Let's go back to the stadium. Were the finances of the company investigated to determine what would happen if there had been a default in the contract?
The contractor? 44 RESOLUTION 010533 - 10/17/01 The contractors are required to put up bonds to cover their work. In other words, if for any reason they cannot perform the work, they must have a bond that would cover the value of that work. So that if they were to go out and be bankrupt, the bonding company would be required to come in and hire another firm or find a way of completing that project at their cost, at no 11 additional cost to the city.
I am going to ask this question because I am not going to be able to stay. Who will reimburse the City of Philadelphia for the losses suffered as a result of the cancellation of the preseason football game between the Baltimore Ravens and the Philadelphia Eagles and the losses suffered by the Eagles, the Ravens, the NFL, and the advertisers on TV and radio? THE CHAIRWOMAN: Please state your full name, sir. CHRISTOPHER McCABE, ESQ.: Christopher McCabe. I am with the Law Department. 45 RESOLUTION 010533 - 10/17/01 And the concern of the law department is, that question touches upon the liability concerns that the law department has. And for that reason we would prefer that that question not be asked or answered by Mr. Tustin.
Who is going to answer it? MR. McCABE: Because of the potential litigation.
Could I have a followup? If it is being litigated, it assumes that we have taken a position, the city. MR. McCABE: We haven't taken a position one way or the other. We don't know what the litigation is going to be and who is going to bring it.
Excuse me? MR. McCABE: We don't know what the litigation will be or who will bring a litigation.
It is not being litigated, then? 46 RESOLUTION 010533 - 10/17/01 MR. McCABE: As of now I am not aware of any lawsuit, but there is a potential for litigation.
There is a potential. But I assume that the city has developed a position. I mean, are we not seeking restitution? MR. McCABE: I don't know. I can't answer that question. I don't know what position has been taken by the city or various departments.
We have not taken a position that some sort of restitution should be coming to us? Forget about the bad publicity that we got nationwide and all of the money that was wasted in building, you know, Philadelphia Loves You Back, and so on, except you can't play football. Right? We have not taken a position that we should be compensated for the losses that the city experienced during that period of time? MR. McCABE: Councilman, I don't know whether we have or not.
Who does? Who knows? MR. McCABE: I don't know who would 47 RESOLUTION 010533 - 10/17/01 know. Perhaps the Solicitor.
Who is going to pay for the city employees' overtime? Who pays for that? Who pays for the costs? Who pays for the employees to reengineer the conversion from football to baseball, and who will pay the city's cost?
Overtime. MR. McCABE: Councilwoman, I don't have an answer to that question.
Has anybody in the Administration looked at that? MR. McCABE: I don't know.
How did the employees get paid? Where will it be accounted for in the budget? MR. McCABE: I can't answer that question.
Is there anybody from the Administration who can answer that question? MR. McCABE: I can find out. 48 RESOLUTION 010533 - 10/17/01
Have we thought about it, the question, it is going to cost us, and how do we recoup our cost? THE CHAIRWOMAN: Would those kinds of provisions be discussed in the lease, as a contingency? Hello. Can anyone help us with that answer?
I cannot answer the question concerning litigation. I do know that the cost --
I have been advised by the City Solicitor's office not to make an opinion on that until --
Did we ask Southwest to bear all of the costs, part of the costs, a little bit of the costs for the fiasco that we endured that day? 49 RESOLUTION 010533 - 10/17/01
Councilman, I have been asked by the Managing Director's Office and the City Solicitor's Office not to pursue anything at this point because --
I am not saying that we are litigating. I am saying, have we asked them, have we written them, as to what responsibility they should bear for that day? Have we written them at all? Have we inquired of them? Is there a contractual basis? THE CHAIRWOMAN: Let's refer to Councilwoman Tasco.
In addition to that, you know, we read and understand that each department is going to have to cut back their budget costs. Now, with this cost overrun and overtime -- I imagine these employees are in the Recreation Department; right?
All departments. What impact would that have on the proposed budgets of those departments in providing services for other things in this city, where we had 50 RESOLUTION 010533 - 10/17/01 used the money to pay for the overtime?
Councilwoman, I can't comment on that. I don't know the answer to that question.
Madam Chair, I think we have to get someone in here who can answer those questions. THE CHAIRWOMAN: I would ask the Veteran's Stadium director, can you help us with the answer to that question?
Can you repeat the question? I am not sure what you are really asking. I mean, in terms of who paid the city employees that worked overtime, I mean, at this point the city paid them.
But who is going to recoup that cost? It is not our responsibility to do that. The company put in a product, the product doesn't work. Our employees have to change it from one game to the next, and that cost us overtime. That money comes out of our pocket that can be used for services someplace else. 51 RESOLUTION 010533 - 10/17/01
I don't think that's been decided yet. And I certainly don't have the answer to that. And in addition, just so everyone understand, to the extra costs that the city has borne in terms of --
Where is that going to go? Does it depend on what department you work in? If you worked in Recreation, it goes to the Recreation? If you work in Fleet Management, it goes into Fleet Management? Who is ultimately responsible in the city for that? Councilman Rizzo and I and Councilwoman Tasco were working there for our individual department. We get our pay every two weeks. You add the overtime, we get the pay. Who will eventually be responsible? Will your department cover your employees? Will any other employees from other departments that may have been called out cover that? I think what we are trying to get here on that, not if Ewing, Cole is responsible, not if 52 RESOLUTION 010533 - 10/17/01 Southwest is responsible, but this question is, who is actually responsible? Do you just shift that around? Is it interdepartmental shift for budgets? Because your budget might be high because you have a lot of guys working on it.
From a practical standpoint, at this point, I think each individual agency that has offered resources to the problem, I think at this point, they are responsible for that. I don't think that an ultimate decision has been made. I don't think that the Managing Director's Office has reviewed it. I don't think that the Law Department has ultimately reviewed it. And what I started to say before is, in addition to all the additional costs that city agencies may have borne to this point, there has been a significant amount of costs borne by Southwest Recreational. And I am sure they will talk a little bit about that. And they certainly have not, as far as I know, come back to the city and sought any type of reimbursement for those costs. And I wouldn't expect that they would. 53 RESOLUTION 010533 - 10/17/01 And, you know, I am not a lawyer.
We are not concerned about Southwest. That's their problem. We are concerned about the city, and the costs to the city, and who is going to reimburse the city for its costs that it incurred to straighten out this fiasco.
I understand that. And I think the honest answer at this point is, I don't think anybody really knows yet or has, you know, investigated that question.
But if the city does, and it eventually comes down from the Managing Director's Office at a cabinet meeting, is that what we are looking for? Is that how that happens?
If somebody was called and may have had some expertise that wasn't with the Recreation Department, and he had a lot of overtime, I think that's the question my colleagues are asking, eventually you either wash that or work that out between the departments.
Firing all these 54 RESOLUTION 010533 - 10/17/01 questions off, we are not going to get the answer, but we will fire the questions off. Do we know how much it cost? Have we calculated the total cost of what it cost the city?
I know -- THE CHAIRWOMAN: I am going to put a comma there with Councilwoman Tasco's question and allow Council Jim Kenney, who has been waiting, to get his questions on the record.