Teaching the county commission free enterprise: Lesson 1
By Michael Lewis
A war of words between Miami-Dade County's mayor and its county commission offers proof positive that the commission is the worst place to deal with county contracts.
Mayor Carlos Alvarez, who is intent on wresting control of contracts from commissioners, pointed out last week that the commission's insistence on issuing an ambulance contract with no competitive bids cost taxpayers $900,000.
Commissioner Natacha Seijas shot back a memo telling the mayor that while competitive bids indeed would have saved money, she led the fight to bar competition because a lower price would have meant less quality.
The commissioner believes the more we pay the better because quality automatically rises with cost.
Don't go shopping with this lady.
And don't let her and her fellow maximum spenders deal with the county's contracts.
Her reasoning is clear - if fatally flawed. We need good ambulance service. If we let other firms bid, they will bid less but that will lower quality and "I certainly do not want my family and friends to be transported by a second-rate ambulance service."
The commissioner makes no claim to having looked into any service but the one that has had the contract since 1986 - the past few years without competitive bids allowed. She knows this service is best simply because she pays more for it.
This is the reasoning the mayor is fighting - that and the waste and favoritism and worse in county contracts that have been rampant for years under the commission's sway.
His solution is to have a strong mayor oversee contracts. A better choice is a strong manager: Don't forget, the county manager recommended that the ambulance contract be contested to get the best possible deal, but the commission overruled him.
Wherever contract authority should reside, however, the commission is absolutely the wrong place. There's no way we should allow a commission that doesn't understand free enterprise to control contracts.
A lower price, Commissioner Seijas, doesn't necessarily mean lower quality. When there is competition, all competitors sharpen their pencils and shave profit margins to a minimum and seek maximum efficiency if they want to win. The contract, even at a lower price, would still be profitable to the winner.
There is no incentive for the present contract holder to keep profits low or become more efficient because it is guaranteed the job if no other bidders are allowed.
Once there is competition, the opportunity for saving - without necessarily cutting quality - is real. And since County Manager George Burgess had recommended bids judged on both price and quality, there's no way a fair, unrigged bidding process could go wrong.
The only reason to maintain a no-bid situation is if commissioners have a clandestine reason for wanting the present firm to keep winning year after year at any price. I don't know what that reason might be - and the commissioners sure won't be talking about it. But why else should commissioners subvert the free-enterprise system?
How much could the county save with competitive ambulance bids? The mayor says $900,000. It actually could be higher or lower.
Unfortunately, we'll never know because no other bids are allowed. The commission apparently doesn't believe in saving through efficiency or in seeking contracts at the lowest possible margin rather than the highest possible.
"This particular procurement item seems to demonstrate the importance of involving the elected leadership of this community in the process," Commissioner Seijas writes to the mayor.
Actually, it demonstrates just the opposite - commissioners are not looking at contracts the way a wise custodian of public funds and public safety would. There is nothing wrong, and everything right, with looking for minimum costs of equal or better service. And by denying competition, the county can never achieve either.
"Sometimes it is important to focus on the bigger picture," Ms. Seijas writes to the mayor.
When is she going to start?