L.A. Needs New Contract System
The Los Angeles City Council’s Public Safety Committee made the right decision this week when it delayed action on a bid by Motorola Inc. for a $51-million police radio communications contract, pending some tangible assurance that the company will deliver on an existing contract.
“This is about the city negotiating smart contracts. It has nothing to do with impugning Motorola,” committee Chairwoman Laura Chick said Thursday. That’s the right attitude. Now it’s up to the council to follow through.
Motorola has an existing $20-million contract to upgrade Los Angeles Police Department patrol car computers, on which officers receive 70% to 80% of their emergency calls. But Police Chief Bernard Parks said in a strongly worded letter last month that the effort was behind schedule. He also said he believed that Motorola was attempting to significantly change the terms of the contract. The LAPD is even concerned that Motorola’s new system might not be any better than the current, outdated one. The company insists that its changes would benefit the system it is installing.
Contract issues like these are good arguments for performance-based contracting, an old idea that the city should look at afresh. That approach would have addressed the problems and concerns that surround the Motorola contract.
It’s a simple concept: detailed performance standards for specific objectives; regular progress reports; monetary incentives for superior work, delivered early or on time; penalties or even a halt on payments for delays, shoddy efforts or a final product that doesn’t measure up.
In addition, many agreements made under such an approach feature competitive bidding for subcontractors, which was lacking in the Motorola deal, as it is in most city contracts. Competition among subcontractors would help avoid even the appearance of sweetheart deals that benefit political pals.
Results-based contracting would help prevent what has too often been a bastardized low-bid process. A firm “low-balls” its competitors, then presents scads of change orders, at additional cost, which are routinely approved by administrators. That pads the bill over the course of the contract, ultimately bilking the taxpayer. The Metropolitan Transportation Authority has repeatedly run up against the change-order problem on its expensive subway projects. That’s the kind of business-as-usual sloppiness that can no longer be tolerated in Los Angeles.
