Waste disposal contract

Denali Disposal's appeal against the award of the solid waste collection contract to Alaska Waste was denied.

KODIAK — The Kodiak Island Borough’s Solid Waste Advisory Board denied an appeal of the FY2021-2027 waste disposal contract award during a hearing Tuesday. The appeal was submitted last month by Denali Disposal, accusing the borough of holding an “incompetent” and “unfair” process.

“I think this is far, far from over,” Denali Disposal President Burnadette Wilson told the Kodiak Daily Mirror after the hearing, indicating that she intends to challenge the decision in court. Wilson added that she has some concern over comments made by borough staff members under oath, which she believes to be inaccurate.

According to the borough’s procedures, after the Tuesday SWAB hearing, Denali Disposal representatives have the right to appeal to the superior court of the State of Alaska within 30 days.

“It’s definitely a mess,” Wilson said Wednesday, adding that she will wait to see how the borough responds to the decision before she takes further action.

The KIB assembly elected to award the new contract to Alaska Waste on May 6. In line with SWAB’s decision, the assembly is expected to sign the contract with Alaska Waste later this week.

SWAB reached a decision after Wilson and the borough’s Director of Engineering and Facilities David Conrad presented their cases. The board voted unanimously to uphold a previous decision made by Conrand, who denied Wilson’s letter of protest submitted on June 3.

Bids for the new contract were submitted by Denali Disposal, Emerald Sanitation and Alaska Waste. Alaska Waste, also known as Waste Connections of Alaska, Inc., has the current contract for solid waste collection, which is set to expire on June 30, 2020.

While presenting her case, Wilson argued that borough staff failed to convey critical information to her once the Request For Proposals was published. She added that it was unlikely that bidders were scored fairly during the process, given that Denali Disposal was ranked last among the three bidders.

Emerald Sanitation, a new company established by Kodiak resident Sam Rohrer, ranked second in the bidding process, while Alaska Waste was ranked first. 

“How is it that we came in ranked lower than a company (Emerald Sanitation) that doesn’t own a single piece of equipment?” Wilson asked when presenting her case.

She noted that her father, Dan Zipay, founded Alaska Waste, and that Denali Disposal has significant experience in the waste disposal business. 

“I don’t have a problem with the RFP. I don’t have a problem with how they intended to lay out the evaluation process. My problem is with the incompetency of those that were in charge of allotting those points and where and how the KIB staff came up with this.”

Wilson added that Denali Disposal was not given the opportunity to negotiate with borough staff as part of the RFP process.

“If we’d been treated fairly and been recognized as a viable respondent, had the opportunity to go into negotiations, I’m sure a lot of that could have been hashed out,” she said. “To not invite us to the negotiating table looks incredibly suspicious, especially on top of the fact that my numerous requests and emails went ignored.”

Wilson said that during the RFP process, she submitted a request to the borough to allot relative weight for businesses owned by women, Alaska Natives and other minority candidates in the bidding process, but she said the borough response to her request was not communicated clearly.

“It’s either coercion, or it’s incompetency, or it is indeed straight up discrimination. Because it’s not right and it’s not fair. What we’re asking for it to be treated fairly.”

According to borough staff, the RFP was amended following Wilson’s question on the matter.

The borough’s addendum states that “the relative weight evaluation criteria in the RFP will not be amended to provide a preference for women owned, Alaska Native owned, or minority businesses. All RFP responses will be evaluated on a non-discriminatory basis with respect to race, gender, color, sex, religion, and all other protected classifications.

Conrad, who spoke on behalf of the borough, said the borough code stipulates that the borough manager may negotiate with bidders, but is not required to.

“I think that ‘may’ is a very strong word. It doesn’t say ‘shall’ or ‘will,’” Conrad said. “Negotiation allows the evaluation and measurement of the quality and completeness of a written proposal in addition to the pricing provided. Unfortunately, some of that is subjective. There’s no way around subjectivity.” 

Conrad stated that Alaska Waste was selected because the evaluation team believed they would provide the best deal for the borough and its residents.

“I can state for the record that there was no collusion,” Conrad said, noting that Denali Disposal did not offer any proof of collusion.

The evaluation team included borough staff members Conrad, Meagan Christiansen and Matt Gandel, and external advisor Dan Pitzler. 

“The team assembled was a group of individuals who have no bias, were not influenced by any individual relationship or in-depth knowledge of any of the respondents,” Conrad said. “We simply live in the community and are KIB employees, taxpayers and users of the solid waste contract. To imply that any local team does not act with integrity and respect for this and other processes is an insulting and irrational claim. This is not about emotion. Rather, this is about choosing the best company to provide services for the Kodiak Island Borough.”

In announcing their decision, SWAB board members noted that they found the process to be flawed, but did not find sufficient evidence to invalidate the borough’s decision to award the solid waste contract to Alaska Waste.

“The board finds that the procurement was conducted in accordance with the borough code, applicable statutes and terms of the RFP,” said SWAB chair Nick Szabo, reading the board’s findings of fact after an hour-long executive session in which board members deliberated on the matter.

“While not an optimal process, there was no evidence of overt bias or unfairness in the execution of the evaluation. The evaluation appears to have rated companies on their merits. Therefore, the board finds that the challenge to the evaluation process is denied.” 

The findings of fact were approved unanimously by SWAB members, excluding the finding that the procurement officials had the discretion to negotiate with only one bidder and did not abuse that discretion. Board Member Ed Mahoney voted against that finding, while all other members voted in favor.

Prior to the beginning of the hearing, SWAB member Jeff Stewart requested to be recused from the hearing.

“There would appear to be no basis in borough code for the SWAB to conduct such a hearing, and therefore I question the legitimacy of this hearing,” Stewart said.

Stewart added that he disagreed with the KIB assembly’s decision to amend the hearing procedures at a July 9 meeting. The assembly voted to disallow “additional intervenors” from testifying, thus preventing other interested parties from testifying at Tuesday’s hearing.

“These changes are purportedly designed to narrow the scope of inquiry available to this administrative tribunal,” Stewart said. However, he argued that the changes may be disadvantageous to the appellant in the case. 

“I find that I would be inclined to vote in favor of the appellant’s petition due only to what I perceive to be misconduct on the part of the borough in this matter,” Stewart said, prior to his recusal. 

SWAB member Laine Welch was excused due to health concerns, bringing the number of voting members to five. 

Alaska Waste Division Vice President Mark Gingrich, who was present at the hearing, expressed appreciation for SWAB’s decision.

“We’re pleased with the Solid Waste Advisory Board denying the appeal and confirming the assembly’s decision to ratify the solid waste contract. The new solid waste contract provides a great value to the businesses and residents of the community and is also a bear-friendly agreement, which we know the community values. Additionally, we know that all of our employees here in Kodiak are very pleased with the results of this hearing tonight,” Gingrich said.

Commenting on a future court appeal, Gingrich expressed confidence that the decision would be upheld.

“We’re confident that the end result of any further appeals will be similar, as the borough followed their RFP process in a fair and equitable way, and our agreement was clearly scored by four of the independent judges strongly in our favor,” he said.

Borough Mayor Dan Rohrer, who was also present at the hearing, declined to comment on the appeal process.

The borough assembly is set to ratify SWAB’s decision at Thursday’s assembly meeting. Borough assembly members previously agreed that if SWAB rejected the appeal, they would sign the contract with Alaska Waste on Friday. 

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