Local landfill outfit stuns rival

Wake County went with a Raleigh firm despite a lower bid from a Tennessee company

Staff WriterJune 9, 2006 

For nearly a year, a small Tennessee company was the favorite to run a new landfill in Holly Springs.

Santek Environmental was chosen by a committee of technical advisers, approved by a committee of town managers and recommended by county staffers.

But Monday, county commissioners decided to award the 25-year contract to a local company instead, even though it was $9.4 million more expensive.

The last-minute decision came as a shock to Santek employees, who said they didn't know that the commissioners were not going ahead with their proposal.

"In 20 years of business, we have never had anything like this happen to us," said Cheryl Dunson, vice president of marketing for Santek.

Raleigh-based Waste Industries won the contract, estimated to be worth $173.9 million over 25 years, after a last-minute campaign that played on its local ties.

In one-on-one meetings with commissioners and public hearings, company executives stressed that the company has been hauling trash in Wake County since 1971 and would be nearby if any problems came up.

They also said that they can bring more trash from their local-hauling business, helping the landfill make a profit.

"This is a home game for us, and the county can expect an extra effort," said Ven Poole, vice president of corporate development for Waste Industries.

Commissioners voted 5-2 Monday afternoon to award the contract to the Waste Industries. Those who voted for it echoed many of the company's arguments.

"With a company that's here in town, any time you have a problem you can sit down and have lunch with the CEO and work something out," said Betty Lou Ward, who made the motion to award the contract to Waste Industries.

The two commissioners who voted against the proposal -- Kenn Gardner and Tony Gurley -- said they were surprised by the last-minute switch.

"I was blindsided by it," said Gurley, chairman of the commissioners. He said he thinks Waste Industries will do a good job, but he is concerned that commissioners chose to ignore a yearlong selection process, two rounds of bidding and its own staff's recommendations.

Under state law, counties and cities are not required to go with the low bidder on a landfill contract.

Third bid's the charm

Waste Industries had originally complained that the selection process unfairly favored Santek.

In 2004, the county received bids to run the landfill from four companies: Santek, Waste Industries and two others.

Waste Industries' initial proposal was the lowest. But the company had included a number of provisions requiring the county to cover the costs if the site was rockier than expected and to build a gatehouse.

The county agreed to many of the changes, but it decided to reopen the bidding.

In a second round, Santek came in lower than Waste Industries. After reviewing the proposals, county staff recommended Santek's $164.5 million bid.

In late May, Waste Industries sent a third proposal to County Manager David Cooke. The proposal was lower than its earlier pitches but still more expensive than Santek's.

In a letter to Cooke before Monday's vote, Santek officials said that they were upset that Waste Industries was allowed to make a third bid. They maintain that their proposal is the least expensive and best.

"Our proposal was $9.4 million better than theirs," Dunson said.

Staff writer Ryan Teague Beckwith can be reached at 836-4944 or rbeckwit@newsobserver.com.

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