The owner of a San Francisco-based lighting company is questioning why a massive, citywide project was given to the Pacific Gas & Electric Company—and not subject to an open, competitive bidding process.
At the May 5 meeting, City Council approved entering into a contract with PG&E to replace more than 300 streetlights with LED technology. Jason Tanko, president of Tanko Lighting, urged council to put the project out to bid at the May 19 council meeting—and that process never occurred.
Tanko said his company submitted a quote to the public works department two weeks before council approved the PG&E contract. After the quote was submitted, City staff told Tanko his company’s quote was roughly $385,000 less than PG&E’s quote.
Over the course of two weeks, Tanko attempted to connect with City staff leading up to the May 5 vote. Tanko’s efforts were unsuccessful, he said.
“It’s possible the City is not getting the best value with the current vendor,” he said at the May 19 meeting, noting that PG&E’s price was not included in the council packet for the May 5 meeting.
After council’s decision, Tanko said City staff told him Gilroy offered PG&E a counter proposal—which happened to be just below Tanko’s recent offer.
“We are very concerned with the way the quotes were handled leading up to the recommendation to council,” Tanko added. “Had we not attempted a good faith manner to provide the City with this proposal, PG&E’s price would have remained high.”
City Transportation Engineer Henry Servin countered that Gilroy has gone through a “very transparent process” with this project. Citing an exemption from the competitive bidding process under California’s Labor Code, he added that the item was open to the public for discussion—but not for bidding.
“No one came forward and objected or opposed during a public hearing at the May 2 meeting,” Assistant City Attorney Jolie Houston said. “We can’t discuss the contract and renegotiate it at this meeting since it’s not on the agenda.”
According to Servin, Gilroy would have had to hire inspectors if council did not approve a contract with PG&E and would need to pay additional fees for disposal of the lighting slated for removal.
“Any fixture they received is taken from cradle to grave to minimize cost to the City,” Servin said. “We don’t want to risk someone putting those in the dumpster.”
Councilman Peter Leroe-Muñoz made the motion to adopt City staff’s original recommendation regarding the intensity of the LED lighting—the contract was not scheduled for discussion—and he added a caveat that any possible future discussion of renegotiations be eliminated.
“It appears as though everything was done within our proper legal purview and a decision was made,” he said. “We stand to, potentially, lose money if we delay the process any further. It was a legal process, and I say we go forward.”
Council unanimously approved Leroe-Muñoz’s motion.
Still, Tanko said he has unanswered questions, adding that his small company is focused on converting street lighting could save Gilroy more than $15,000 a month in energy costs by finishing the project “much faster.”
“How did PG&E know to go lower than our quote?” he asked. “If the pricing was handled in an unusual manner, does this invalidate PG&E’s last number?”
