Casting Of Lots Is Not Lots Of Fun. So Let's Explain It With Breakfast Tacos.

Jun 14, 2018

There’s an old adage: Nothing screams comedy like line-item contract bid awards.

That is not a true statement. That was a joke. And it wasn’t funny.

The tedium of local government contracts – particularly, on the line-item level – doesn’t leave an audience in peals of uncontrollable, full-body-heave, bladder-evacuative laughter. It doesn’t inspire the mirth or hysteria or even mild bemusement.

But there he was earlier this week, Austin’s Purchasing Officer James Scarboro, getting laughs.

"I got a few chuckles when I had to explain this." 

Scarboro was explaining why the city had to essentially roll dice on a tiny fraction of a  $762,663 contract for PVC pipe for Austin Energy; the stockpile of piping will be shared across the utility's warehouses off St. Elmo Road and Kramer Lane. 

But before we dive into that rip-roaring discussion that is, indeed, decidedly unfunny, let's start with something more palatable: breakfast tacos. 

When cities want to buy something from a vendor, they put out the call, weigh the offers, finalize a contract and pay up.

So, because metaphors are fun, let's say the City of Austin's on the prowl for some sustenance. She wants a bacon, egg and cheese breakfast taco. She puts the word out, and a handful of vendors come through with taco offers. She could either purchase it in aggregate – meaning she could buy it as is right then and there, scarf it down and be done with it – or she, being both discerning and frugal, could buy it on a line-item basis – meaning that handful of vendors could make offers to provide the disparate ingredients of said taco – a Frankentaco, if you will.

Here's where it goes back to being unfun for a spell. Enter: Texas law.

If a city receives an identical bid, under state law, the contract is decided by where a bidder is headquartered. If it’s from Texas, that bidder gets the contract. Simple.

If both are from Texas, there’s a casting of lots, which happened this morning at an Austin City Council meeting.

It made for an amusing diversion ahead of Council’s approval of Brian Manley as Austin’s newest police chief. But it took hours to get to that moment.

Why? Back to James Scarboro and the tacos. 

The contract in question was split between four vendors on a line-item basis. (Think: Frankentaco). The contract awarded all four contractors, with the money being paid out for hundreds of different lengths and joints and brackets of PVC.

But two of the contractors, Techline and Texas Electric Cooperatives, had identical bids on two specific items, items 13 and 15.

It's important to note, the cost of each item, Scarboro says, was “a very, very modest amount" as far as contracts go.

He’s underselling it.  

All told, the two line items account for three-tenths of a percent of the overall contract, totaling about $2,400. The items in question cost $0.75 and $0.60 a piece, which a cursory internet search would lead one to believe is a pretty good deal.

The breakdown of the city's bid for Austin Energy's PVC. The orange cells in the sheet denote the tie bids between Techline and Texas Electric Cooperative.
Credit City of Austin

While state law is pretty prescriptive about this stuff, Scarboro says, casting of lots on aggregate bids – the whole taco – happen pretty infrequently. But nobody at the Purchasing Office has ever seen a casting of lots for line-item bids – or Frankentaco bids.

“Even at the aggregate level, where one company gets the contract and the other company doesn’t get the contract, that only happens once every couple of years – that’s pretty rare,” he said. “In everybody’s recollection, nobody recalls having to break a tie at the line item-level before. So this is pretty rare. It’s an odd circumstance.”

When it does occur, state law stipulates the mayor decide how the lots are cast. So, this morning, Mayor Steve Adler opted for two envelopes. Both contained cards with the names of the tied contractors, Techline Inc. and Texas Electric Cooperative, written on them. One was opened for item 13; another for item 15. He opened both and pulled Techline out of each.

Thus the city wrapped up this drama and acquired a much-needed metaphorical breakfast taco.