Review of Detroit Land Bank's Bid Selection Process Relating to Hardest Hit Funds

8/17/2019 Review of Detroit Land Bank's Bid Selection Process Relating to Hardest Hit Funds

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M E M O R A N D U M

TO: Carrie Lewand-Monroe, Acting Executive Director

Detroit Land Bank

FROM: Mary Townley, Director of Homeownership

Michigan State Housing Development Authority

DATE: October 26, 2015

RE: Review of Detroit Land Bank’s Bid Selection Process Relating to

Hardest Hit Funds


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Detroit Land Bank Bid Process Analysis

Overview

On October 14 and 15, 2015, Roxy Eaton, Blight Elimination Team Lead, Marissa Hendee,

Compliance Officer, and Tonya Young, Community Development Program Manager, performed an

on-site review of the Detroit Land Bank’s bidding process. While on-site we worked with James

Wright, Deputy Director, Detroit Building Authority, Tom Ouvry, Consultant, Detroit Building

Authority, and Martha H. Delgado, Compliance Grant Manager, Detroit Land Bank Authority. The

Detroit Land Bank (DLB) provided the list of all bids from the first and second round of Hardest Hit

(HH) funds. The list noted 97 total bids (removing deconstruction or “decon”), and showed that the

lowest bid was selected 56 times (58%) while 41 were not the lowest bid (42%). Broken down by

funding round, within the first round of HH funds, the lowest bid was selected 55% (36/66) of the

time. In the second round of HHF, the lowest bid was selected 65% of the time (20/31).

For our analysis, we reviewed all bids selected that were not the lowest bid (41) and a sample of

what the DLB self-reported as the lowest bid selected. For example, for HHF3a, HHF3b, HHF3c,

HHF3a was noted as the low bid selected while HHF3b and HHF3c the low bid was not selected. So

within this section, HHF3a was reviewed to ensure it was the low bid for that bid package andHHF3b and HHF3c were reviewed to see why the low bid was not selected. The sample reviewed

to ensure that the DLB accurately self-reported the lowest bid being selected showed no

discrepancies.

For scoring, Hardest Hit round one funds and bid selection were done by a score and rank

methodology. HH round two funds and bid selection were done by several different scoring

methods. The first method was the “Curve” scoring, the second scoring method was the “Step”scoring and the third, and most recent, scoring method is the “Step with Stipulated Terms”

scoring. These methods are somewhat defined in the Evaluation Criteria or Evaluation Section

portion of the applicable Request for Proposal or Request for Qualifications however the history


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properties within the bid package, Award amount, Date awarded, Date completed and any

additional information needed to support the bid selection.

This spreadsheet must be able to support why the lowest bidder (and in some cases thesecond and third lowest bidder) was not selected and show that the lowest bidder has other

“bid packages” in process that supports the lack of “capacity”.

Issue #2 - The DLB must document and explain deviations of 30% or more of the bid selected

compared to the lowest bid. One bid that was reviewed had a deviation of $828,571 or 46%

from the winning bid compared to the lowest bid. With the winning bid having a demolition

cost per structure of $18,139.

Issue #3 - Explain why the scoring committee scored on “capacity” of contractors and gave

higher points on unit performance that exceeds the number in bid package. For example, the

bid package was for 16 properties and the scoring committee gave points based on the

contractor indicating they can demo 40, therefore they gave that bidder more points. (See

hhf1c)

Issue #4 - Establish a minimum threshold needed to score and rank bidders. For example, abidder was marked as having no wrecking license yet they were scored higher than another

bidder that did have a wrecking license. (Example, hhhf4D – KCI General Contractor)

Additional Items to be Addressed from Round 1:

• Going forward, the DLB must ensure the scoring summary sheets are complete and

document why there may be blanks in the scoring summary sheets. Do not changehistorical information.

• Document consistency in scoring numbers such as rounding vs. not rounding. A rounding


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o

As part of Curve and Step scoring, include explanation for the subjective scoring

categories of “Bid Amount” and “Contract Duration”.

Make sure the DLB can explain the formula used for “Bid Amount” score and“Contract Duration” score.

o Consider documenting a scoring plan/process for potential Round 3 funding.

Additional Items to be Addressed from Round 2:

• Change the verbiage on Section 5G of Step with Stipulated Term to read “may” vs. “will”.

•

It was advised that the DLB consider adding a “capacity” scoring metric since this appearsto be a factor, if not the primary factor, in determining the winning bid.

• The DLB must clarify in the RFP regarding tiebreakers, such as using interviews or

prioritizing Detroit Headquartered Business (DHB)/Detroit Based Business (DBB)

contractors.

• Timeframe requirements documented in the Stipulated Terms document must be

documented in the final contract.

•

The DLB must document who is on the scoring committee, this would include showing anappropriate level of expertise within the committee.

• The formulas used for scoring must be defined in the bid package.

• Clarify posting of Request for Proposal (RFP) vs. Request for Qualifications (RFQ).

• The final term date needs to be amended in existing contracts.

• Additional information regarding change orders needs to be provided to ensure actual

expense reflects bid prices.

o

This would include documenting what the change order process is and having adetailed list of what change orders have been approved and for how much.


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Review of Detroit Land Bank's Bid Selection Process Relating to Hardest Hit Funds

Documents

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