Supervisors approve waiver for PUC construction-management contract after hours of debate on conflict concerns

Lede: The Board of Supervisors approved legislation on Jan. 27 that grants the San Francisco Public Utilities Commission a waiver of competitive procurement rules to award a construction management services contract (agenda item 11), after extended floor debate about a potential conflict of interest and how the board previously directed procurement for pieces of the larger water system program.

Nut graf: Supervisors examined whether splitting a previously bid $45 million delivery agreement into smaller pieces, and then awarding one of those pieces to a firm with a role in drafting the plan behind the RFP, was an adequate remedy to a conflict-of-interest determination described in the city attorney's report. The budget committee's analyst and other supporters said the RFP process had run and that there were only a small number of qualified bidders for the multi-billion-dollar Water System Improvement Program; opponents said the size and public nature of the work required more procedural safeguards.

Body: Supervisor Carmen Campos led the opposition to the waiver, arguing that the contract being considered ' a $26 million portion of a larger $45 million package ' still raised questions because one joint-venture partner had helped draft the plan on which the RFP was predicated and had been ruled conflicted for a portion of the work by the city attorney. Campos said that simply splitting the earlier award into two pieces did not, in her view, cure the appearance or reality of a conflict. She said the public deserves a competitive process for large expenditures.

Supporters on the budget committee and the PUC staff explained the procedural history: the commission had initially run an RFP, the highest bidder was a joint venture that included Parsons and others, and the city attorney's office identified a conflict limited to construction management services. Budget committee members said the committee had reviewed the budget analyst's recommendation and concluded that, given the limited number of qualified firms able to manage a multi-billion-dollar water program and the time and cost of rebidding, the waiver was reasonable.

The budget analyst and the City Attorney (as reported to the committee) advised that the split award satisfied the legal concerns raised earlier and recommended approval. PUC representatives said their program ' the Water System Improvement Program ' is entering a construction phase with many projects coming forward and that delays could increase costs for ratepayers; they noted many construction managers are under contract already or would be disqualified by conflicts.

The board debated the trade-offs: the danger of perceived impropriety versus the risk that rebidding would cause multi-month delays and higher costs. Supervisor Campos voted against the measure, saying she would not —overwrit— a process where public trust is at stake.

Ending: After the roll-call vote the ordinance was adopted (recorded vote shown in the meeting minutes). The board instructed staff to provide post-award transparency on contract terms and to report back on procurement safeguards for the multi-billion-dollar water program.