LOWELL, Mass. — The Massachusetts Inspector General’s Office (IGO) has determined this city violated state bidding laws when it procured a new wireless fire alarm solution. The deal forced some property owners to buy connecting radio boxes from the company that installed the system.
City officials switched to the wireless system because the telegraph-wire alarm system it employed became costly to maintain and was unreliable, reports The Lowell Sun. Currently, state law regulating public construction work states that based on competitive bids, the “lowest responsible and eligible bidder” should win the contract for construction or repair of any building projected to cost between $25,000 and $100,000.
However, in March 2009 the city issued a request for proposal (RFP) in its quest to find a firm to install the wireless radio alarm system. The RFP called for the installation of 68 alarm boxes on city-owned properties, as well as the deployment of equipment in the dispatch center to receive signals from the alarms. It also required the connection of all non-municipal fire boxes to the new system within two years.
After receiving six bids, ranging from $77,849 to $394,500, a technical review committee of fire department officials awarded the contract to East Coast Security Service of Salem, N.H., which offered the lowest bid.
Complaints by the Lowell Housing Authority (LHA) prompted the IGO to investigate the case. The authority questioned the requirement that property owners of residential buildings with 13 or more units purchase a radio box from one company.
During his inspection, then-Inspector General Gregory Sullivan found that the specifications in the RFP did not present a way for the city to meaningfully compare systems proposed by the vendors. Ultimately, Sullivan determined that the city violated Chapter 30B of the state law, which outlines the process that many goods and services must be procured depending on price thresholds.
After reviewing the IGO report and information from the city, Sullivan discovered that East Coast Security overcharged non-municipal buildings for the fire alarm boxes. Residential buildings with more than 13 units or more paid $2,475 for each fire alarm box. That was far more than the $1,100 that electronic security contractor paid to obtain the boxes.
Thus, by requiring those connecting to the new alarm system to purchase boxes from East Coast Security, the city “completely obliterated price competition,” that would have occurred under Chapter 30B, Sullivan wrote in his review.
Recently, the state Supreme Judicial Court threw out a similar policy in Springfield, Mass. In the wake of that ruling, the city has abolished the requirement for property owners to purchase boxes from East Coast Security and directly connect to dispatch.