Replies to This Discussion

Permalink Reply by Drewbacca on October 5, 2013 at 11:04am

True... between military spending to "defend" our oil supply and all that free on-street parking, we don't see the true cost of automobiles. 

Jeff Schneider said:

I would also like automobile users to pay the total costs for their transportation choice.  For example, property taxes are used for a large portion of street maintenance expenses (including the cost of providing "free" on-street car parking).  Everyone who pays for a place to live pays property tax directly or indirectly.  "Free" on-street parking alone is a government subsidy for car drivers worth about $1k per car annually in my estimation.

It seems strange to me that bike-share should be the *only* transportation system that is expected to be profitable for taxpayers. 

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Permalink Reply by Thunder Snow on October 5, 2013 at 3:42pm

Yep, if the Illinois Policy Institute is really watching out for the taxpayers, they'd get more bang for the buck by coming out against the Illiana Expressway, planned for the south suburbs/exurbs.  Instead of worrying about spending millions on Divvy, which creates a fairly green transportation alternative here in Chicago, the Institute should come out swinging against paving over some of the world's most fertile farmland here in Illinois, extending suburban sprawl into yet more Illinois counties, costing taxpayers at least $1.3 billion.  Don't get me started on the knuckleheaded "Halsted Flyover" being built in Greektown for who knows how much money, intended to save out-of-state truck drivers a few seconds traversing the Circle Interchange.  But highways are IMPORTANT INFRASTRUCTURE (even if those of us without cars may never use them in our lifetimes) and bikes are...toys.  I think the Illinois Policy Institute members see Divvy bike sharing as government funded skateboards or Lego sets.

 

*Just looked at a map of the proposed roadway.  Obviously, my downstate geography is lacking. It looks more like Channahon or Manteno east through Beecher, and on to Indiana, rather than further down in Peoria, as I had thought.  My bad.  But my point at relative spending: billions for roads, millions for bikes, with no complaints about road spending...is still valid.
 
Jennifer on the lake said:

Peoria?

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Permalink Reply by Tom Dworzanski on October 6, 2013 at 9:26am

Well there definitely doesn't seem to be anything criminal in any of this.

Jeff Schneider said:

What really bugged me, and what motivated me to write so much on this thread, was Reboot's accusation that the deal was "crooked".  It's a very serious thing to accuse people of criminality.

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Permalink Reply by Reboot Oxnard on October 6, 2013 at 11:07am

I asked you for an explanation, based on the experience you say you have in manufacturing of some of the particular details about why you think this contract is most likely fair and reasonable. Fairness then requires me to share the same based upon my experience. As someone who has been directly involved as a vendor in thousands of contracts with federal, state and local (including Chicago) public purchasing agencies, I can tell you two things with certainty that this contract process should give everyone pause. It has many of the hallmarks of a crooked deal, including:

• ·         A 30-day RFP. This contract was let via a Request for Proposal, not a Request for Quote; the difference is not semantics. When the city wants to buy a bunch of rock salt for the roads or printer paper, the items they are looking to buy are well understood and readily available from a large number of sources and all they need to do is let those sources know what they want, how much of it they want, where it needs to be delivered and what the payment terms are. Easy, peasy, all they want is a price, so they issue an RFQ.  A large contract for an unusual project, on the other hand, is far more complex and would normally require an RFP and have a longer window to allow prospective vendors time to assemble a qualifying proposal. There are a number of possible reasons for the relatively short window, from experience I’ll tell you that one highly likely possibility is that there was a vendor for whom the bid was intended and what the agency was really looking for were enough additional bidders to provide a smoke screen to disguise that this was essentially a no-bid contract. This happens with disturbing frequency – not just in Chicago but more often here than many other places.

• ·         The specifications. You may think that a high-end heavy-service bike like the Trek Police bike doesn’t correlate well to the Divvy bike and maybe it doesn’t but is there any meaningful performance difference? Why isn’t a police bike suitable for Divvy use? What is it that makes a bike designed for hard use, a proven design that is mass-produced unsuitable and requiring a substitute that is several/many times as expensive? The police bikes are ridden for more miles/hours/days than the Divvy bikes ever will be in exactly the same environment as the Divvy bikes by people who are undoubtedly better riders but also riding far more aggressively than Divvy bikers. I used the Trek police bike as an example because at $1200 it is a high-end bike – by way of comparison, the Fuji police bike only costs about $600, per. One of the easiest ways to engineer the results of a bid award is to draw the specifications so narrowly that there is only one qualified response available – and that means you can’t rely on a mass-produced nearly commodity product but will must use a unique and, preferably, impossible to duplicate (think copyrights and patents) design.

• ·         The cancellation of the RFP. RFPs are rarely canceled, usually because the agency has made a mistake that it can’t fix in a timely manner; otherwise they issue a modification and extend the date to allow additional time to prepare a proposal. In this case, however, reports are that Alta didn’t meet the vendor requirements to do business with the City, in which case they should have been disqualified and the other proposals considered – problematic if the fix is in for Alta. We don’t know what happened to this RFP because the City has refused to explain – also very unusual – but we do know that Alta was able to straighten out their license problem and have a second shot at the prize when the City issued a new RFP.

• ·         The award. In an unusual maneuver the contract was not awarded by the purchasing department but by a vote of the City Council. This isn’t way out of whack for a large contract but an indication that this contract was too important to leave to the purchasing department or that someone wanted them out of the process. 49 – 1 is another indication that there was political strong-arming and horse-trading behind the vote, what is known in Chicago as, “the fix was in.”

• ·         The modification. Despite two attempts at writing the specifications for the contract via the RFPs, upon award the contract was almost immediately modified, extending it from one year to five and increasing its value from ~$30 million to ~$65 million. This is not as unusual as it should be and is, for anyone who has followed the shenanigans at Northerly Island, an excellent way to exclude otherwise competent vendors.

All-in-all there is no smoking gun proof that this deal was crooked but lots of circumstantial evidence points that direction. Responsible stewardship of public funds demands that the possibility be considered, not dismissed just because we like what it being done with the money. This is Chicago, after all; we’d like to think it never happens here but we know otherwise. As to the use of the word, "crooked", just as because a rim is bent doesn’t necessarily mean a spoke is broken, a crooked deal doesn’t mean any laws were broken. Indeed, the essence of public crooked behavior is that the people that are bent are also the ones writing the rules and controlling the process – unless they’re daft toadstools they’re going to make sure they don’t need to break any of them. This isn’t a Democrat/Republican or Progressive/Conservative thing, this is a hairball thing and hairballs are a full-spectrum disorder. In sum, then, as someone who has lived in Illinois for decades and watched the bid process both from the outside and in, I stand by my assertion: this was a crooked deal.

 

TL:DR, I suspect but fairness required more than a sound-bite kind of answer. I hope this helps. Let me close by restating: I’m a supporter of shared bike programs and although I think this deal was crooked I have the fondest hope that Divvy becomes a success. It matters to you and to me. The chances of that success happening are hurt if we stick our collective heads in the sand and refuse to directly confront any shenanigans that might hurt its chances. Allowing the costs to be driven to ridiculous heights by profiteering corporations and politicians is certainly not going to improve the chances of success and that is a rot that I assume you would like to prevent. I know I do.

Jeff Schneider said:

What really bugged me, and what motivated me to write so much on this thread, was Reboot's accusation that the deal was "crooked".  It's a very serious thing to accuse people of criminality.  When you do it, you had better have some real evidence, or be prepared to write a nice apology.

So far, neither evidence nor apology has been forthcoming from Reboot.

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Permalink Reply by Adam Herstein on October 7, 2013 at 4:18am

Well, my tax dollars go towards building of highways…

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Permalink Reply by Skip Montanaro 0mi on October 7, 2013 at 7:12am

h' 1.0 said:

That said-- I lost the thread somewhere-- is $5100 really the actual cost paid for each bike? Is there a source for that?

I don't think so. I think the authors ignored all the other Divvy expenses and just divided the costs by the number of bikes. They also assumed that for it to be a success it needed to be (at least) revenue neutral, which, as others have pointed out, might be a reasonable assumption.

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Permalink Reply by Adam Herstein on October 7, 2013 at 7:16am

Reminds me of when people complain about the price of technology products. "If the parts in the iPhone only cost $200 to make, then why am I paying $399 for it?" They fail to take R&D, marketing, manufacturing, payroll, etc. costs into consideration.

Skip Montanaro 12mi said:

h' 1.0 said:

That said-- I lost the thread somewhere-- is $5100 really the actual cost paid for each bike? Is there a source for that?

I don't think so. I think the authors ignored all the other Divvy expenses and just divided the costs by the number of bikes. They also assumed that for it to be a success it needed to be (at least) revenue neutral, which, as others have pointed out, might be a reasonable assumption.

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Permalink Reply by Skip Montanaro 0mi on October 7, 2013 at 7:55am

Skip Montanaro 12mi said:

.... as others have pointed out, might be a reasonable assumption.

*sigh* I can't type some days. Misspellings are generally not a problem, but I tend to omit entire words. Try this instead:

.... as others have pointed out, might not be a reasonable assumption.

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Permalink Reply by Ryan Lakes on October 7, 2013 at 8:12am

I don't know the details, but I especially disliked the local company not getting the bike sharing contract because that local's business may now be significantly decreased due to the new availability of Divvy bikes. To me, that's our city actively disenfranchising its own citizens/small business owners. To think that the community of Chicago can't rise to the challenge of putting some bicycles on the street for folks to rent is a bit ridiculous and not having done so just sets us back.

Otherwise, I'm glad bike sharing is here. 

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Permalink Reply by Skip Montanaro 0mi on October 7, 2013 at 8:49am

Ryan Lakes said:

I don't know the details, but I especially disliked the local company not getting the bike sharing contract because that local's business may now be significantly decreased due to the new availability of Divvy bikes.

I assume you mean http://www.bikechicago.com/ ? I'm sympathetic, but there's no guarantee that a local bike rental company would be able to adequately scale up to the needs of a city-wide bike sharing program. The odds are that another company that's already implemented one or more bike sharing programs elsewhere will have a better shot at success. Alta's website indicates that they operate seven bike sharing programs in the US and one in Australia. All told, they have installed over 13,000 bikes. Given the information on their About page, it appears they operate bike rental operations in New York, San Francisco, Miami, and Washington, DC as well. It's great to see a Chicago-based company broadening its base. I suspect they aren't all that badly affected by the introduction of Divvy.

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Permalink Reply by Ryan Lakes on October 7, 2013 at 9:57am

The city could have scaled up to handle the needs of a city-wide bike sharing program by partnering with a local entity. To the extent that the local entity is equipped to handle it themselves, all the better. Where they are not, consultants and subcontracts fill the gaps. That would have been my preference to ensure that the risks and profits of local investments stay local to the max and that regional identity is strengthened. I would have also preferred a unique bicycle design rather than the replicas of those in other cities.   

I only mean to share the concept that if Chicago truly is a world class city, then it can take care of itself. Empowering its own community members rather than outsourcing is how I imagine making that more of the reality.

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Permalink Reply by S on October 7, 2013 at 10:42am

I'm sorry but I disagree that scaling up to a large system would be easy and any gaps can easily be filled by subcontractors and and consultants.  If that were true, you wouldn't see the issues businesses run into as they try to expand from small stores/operations to larger sizes.  Having a patchwork of contractors and consultants seems like a recipe for errors and issues to come up and to have the various people blame each other for the problems.  

Being a world class city doesn't mean that you have the facilities to do everything needed by yourself.  I don't think any of the other world class cities uses purely local business for everything so why should Chicago try to hold itself to the same standard if it means that projects end up being implemented poorly?

Ryan Lakes said:

The city could have scaled up to handle the needs of a city-wide bike sharing program by partnering with a local entity. To the extent that the local entity is equipped to handle it themselves, all the better. Where they are not, consultants and subcontracts fill the gaps. That would have been my preference to ensure that the risks and profits of local investments stay local to the max and that regional identity is strengthened. I would have also preferred a unique bicycle design rather than the replicas of those in other cities.   

I only mean to share the concept that if Chicago truly is a world class city, then it can take care of itself. Empowering its own community members rather than outsourcing is how I imagine making that more of the reality.

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