Former McDonnell Douglas Dir of Procurement reviews MV trash contract

One sleek garbage truck

The elected leaders of Mission Viejo are in the same boat as hundreds of their peers in other California cities. Serving on city councils, for the vast majority, is a part time job. As candidates for office there is no prerequisite for having any experience in writing or negotiating major contracts. As such they generally rely on city staff for direction. My suggestion to members of the council was to reach out to those of us who have had contract experience. While I cannot confirm or deny anyone following that suggestion I took a pro-active initiative which follows this opening commentary.

As the Mission Viejo city council is about to select our next trash hauler, for an exclusive 10 year agreement that will approach $100 million dollars, I interviewed Mission Viejo watchdog Joe Holtzman and compared notes of the pending trash contract and our personal experiences in contract negotiations. In our discussions about this pending agreement, and we surely have spent a considerable amount of time on this the largest single contract under consideration by Mission Viejo, Joe has repeatedly reminded me that the spread between the highest bidder Waste Management and CR&R is  $1,750, 807 per year or $17,508,070 over the 10 year term of this pending selection. The total package is based on four categories. single family, bin service, roll off service and temporary bins.

Joe also pointed out that of the four candidates, only Waste Management, our current provider, requested exceptions to the contract. I will share Mr. Holtzman’s analysis in part 2 of this post. 

Note:  Unlike other contracts that we issue, in this case the citizens and business community will be locked into personally writing the checks every month for the next decade based on their selection.

Mr. Holtzman had served as Director of Procurement at McDonnell Douglas in Long Beach, CA where, in that position, he supervised in excess of 100 people.
Among his top duties and responsibilities at McDonnell Douglas was evaluation and negotiation of major sub contract proposals for commercial aircraft, that collectively, were in the billions of dollars. His team was also responsible for overseeing the performance of service contracts.

On Monday, May 17th the Mission Viejo city council may select the firm to have this exclusive service contract. We’re not talking about the space shuttle “Discovery.”

This is a service contract where the key elements are driver and truck safety while quietly picking up our residential and commercial trash in a timely fashion at the lowest cost to the residents and local businesses. Obviously sound financials and future rate increases are also evaluated.
I would consider Mr. Holtzman to be a forensics contracts expert based on his credentials as stated above. Having spent a considerable amount of time with Joe over the past 10 years I would say that his only agenda is to retain the vendor who will provide the best cost for the community.
His biggest concern is the variance between the highest bidder, Waste Management, and CR&R whose proposal is 25 percent lower. According to Joe’s math this differential will cost Mission Viejo taxpayers and local businesses a $17 million premium over the life of the contract that Joe opine’s cannot be justified.

Joe  Holtzman’s  Observations  on  the  MV  Waste  Collection  Candidates

The proposer evaluation process has been done without transparency to the MV public.

The foundation of the evaluation done for the city is based upon a proprietary and secret financial pro forma tool that is being withheld from the public’s view.

Only one of four proposers has requested corporate relief via exceptions and deletions to the MV Waste Collection Franchise Agreement.

Only one firm was unequivocally qualified by the city’s consultant and is the lowest cost.

Only one firm was unequivocally qualified by the city’s consultant and is the highest cost.

The lowest cost firm removes the rubbish from most of Mission Viejo’s neighboring cities.

The highest cost firm removes rubbish from two of Mission Viejo’s neighboring cities.

The lowest cost firm has transitioned two large OC sister cities in the last few years.

The highest cost firm has lost OC franchises in recent years.
The lowest cost firm has developed a service plan with the smallest carbon footprint.

The lowest cost firm has a plan for service that removes trucks from our interchanges.
The lowest cost firm proposes to supply the city with free mulch.

The lowest cost firm is headquartered in Orange County.
The highest cost firm is headquartered outside of California.

And, ladies and gentlemen the firm recommended to the Council for selection is:  The most costly to the residents, based out of state corporation, requesting the most corporate relief, which also affects the larger carbon footprint on Mission Viejo.


Select the lowest cost, qualified bidder for the benefit of the residents and lock in the savings with contractual safe guards that set a new standard for municipal procurement.

About Larry Gilbert