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Lucrative City Garbage Contracts Up for Grabs

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City Hall
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PATERSON, NJ – With more than $46 million worth of contracts at stake, there’s no doubt that Paterson’s garbage collection and disposal work looms as a valuable prize for the private companies in that business.

But the city’s decision on who should get the prize has become a matter of dispute among four of the companies that submitted bids for the work. The issue has been complicated by the school district’s last-minute decision to withdraw from an agreement to share in the city’s garbage contracts.

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All of that leaves municipal officials struggling to untangle the mess without getting sued by any of the firms, while also trying to get the best price on the job and avoiding any disruption in Paterson’s trash collection services.

The City Council spent more than an hour talking trash at their meeting last Tuesday as they considered a plan to reject all the original garbage bids and seek a second round of proposals. The likelihood that the award of the three-year trash contracts would be delayed triggered an unusual – if not illegal – impromptu negotiating session as representatives of various companies offered to do the interim work for less than what the city is paying now.

Eventually, though, officials realized they risked violating the state’s bidding laws and discontinued those talks.

Paterson’s two garbage contracts – one for collection and one for disposal – expired June 30. The city extended the previous deals as it worked on getting new contract in place, which was to include a plan to start a “shared service” agreement with the school district that officials said would save both entities money.

But late in the summer, after the school district a new business administrator, education officials decided they could get a better price on their own. That threw into question the original bids taken by the city, which had included the schools’ garbage.

Under those bids, Suburban Disposal of Fairfield, which currently handles the city’s trash collection as Roselle, would have won that job again at a price of $10.5 million for three years and options for two more years of $4.1 million and $4.2 million. Meanwhile, Sajo Transport of Kearny would have gotten the disposal contract at $15.98 million with options of $5.5 million and $5.7 million for the fourth and fifth years.

Paterson administration officials had decided that the school district’s withdrawal required the bids to be done all over again. The city council was going to vote to do that last Tuesday, until an attorney for Suburban, Adam Wolper, spoke at the meeting. Wolper said his company felt the bids were still valid, adding that the city would reap $3.6 million in savings over three years if it went forward with bids as they were.

Three other representatives from three other bidders also spoke at the meeting.

Gary Giordano, president of Smentkowski Carting of Jersey City, argued against the city’s decision to declare nullify his company’s bid on the grounds that it offered in different terms than the city had asked. Giordano insisted his company would have been lower than Suburban’s if the city considered his proposal.

Christopher Turano, an attorney for Veolia ES Solid Waste of Totowa, told council members that there were problems with Sajo’s bid on the disposal contract and argued that his firm had submitted the lowest proposal that complied with the bidding requirements.

Michael Mastrangello, chief development officer for Sajo, offered to handle Paterson’s garbage disposal work on an interim basis – until the contract situation is ironed out - for 25-percent less than what the city is now paying.

Giordano and Wolper, meanwhile, offered to do the collections on an interim basis for less than the current price.

The prospect of achieving short-term savings on both contracts has council salivating. They quickly came up with the idea of awarding the interim contracts on an emergency basis.

But City Corporation Counsel Paul Forsman warned the council that circumstances did not meet the requirements under state law for awarding emergency contracts.

After an exhausting discussion, the council decided to wait until October 25 to make the decision on whether to seek new bids as well as what to do about garbage collection and disposal for the interim.

At present, those jobs are being done by the previous contractors under a contract extension that expires November 6, officials said.

 

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