On Monday, Judge John H. Gillis Jr. in the Circuit Court for the County of Wayne will hear oral arguments over whether to suspend a temporary restraining order as part of a complaint filed by LGC Global FM, a large general contractor in Detroit, against the Detroit Public Schools Community District.
The complaint centers on a recent $38 million-per-year procurement of facilities maintenance services for 101 schools and 13 administrative locations owned by Detroit Public Schools Community District (DPSCD). LGC is one of three vendors currently under contract to provide maintenance services for the schools.
Contrary to state law and DPSCD’s own policies, the complaint states the educational institution has determined to enter a contract with one or more vendors — specifically GDI in Canada — on terms that were not competitively bid, at prices that are many millions of dollars more than LGC offered to perform, and without the required approval of the full DPSCD Board.
In April, DPSCD released a request for proposals (RFP) to perform facilities management services at all of DPSCD’s schools for a one-year base period, with options that would allow the period to extend to five years.
The RFP included services as well as capital equipment, parts, and materials. Over the initial two-year period, the cost of capital equipment, parts, and materials called for under the RFP is anticipated to be $4 million or higher, the complaint states. The RFP sought a price from vendors to maintain all of DPSCD’s schools.
All vendor proposals were required to be submitted by May 7, 2018. According to the complaint, six vendors, including LGC, responded to the RFP. There was no public opening of the proposals.
The complaint states, that without explanation, DPSCD subsequently required the vendors to provide “best and final offers.” The RFP made no reference to “best and final offers.” Although “best and final offers” actually amounted to new proposals that would have been delivered after the expiration of the deadline specified in the RFP, LGC complied with DPSCD’s request, and it revised its proposal downward.
The total annual price of LGC’s revised proposal was $35.5 million. Pursuant to a publicly disclosed memorandum, the total annual price offered by GDI in Canada, which the DPSCD superintendent proposed for award of the contract, was $38.6 million.
In addition, the complaint highlights a reduction in work scope that DPSCD appears to have offered to GDI alone. Although LGC based its proposal on the servicing of all DPSCD schools, the Contract Motion reveals that the proposed contract with GDI would exclude 10 schools from GDI’s scope of responsibility.
Specifically, near the end of the Contract Motion, DPSCD includes the following statement: “In addition, the District will directly provide cleaning services to 10 schools in a pilot to consider whether returning to the historical District-staffed facilities management program is feasible.”
The complaint states the effect of the district’s plan to maintain 10 schools would reduce GDI’s cost of performance. LGC claims that nowhere in the RFP nor in any subsequent conversations with LGC did DPSCD ever suggest that it planned to self-perform 10 schools. If it had shared that information with LGC, the company says it would have been able to reduce its price substantially, likely by 10 percent or more.
The complaint states the difference between LGC’s price and that of GDI would likely grow to some $7 million per year. Over the potential five-year term of the contract, it would amount to a $35 million excess cost to DPSCD.