3:34 PM EST, November 5, 2013
There is no question that Baltimore needs to improve its water billing system. Chronic errors have produced thousands of inaccurate bills with mistakes totaling millions of dollars. The fact that two meter readers admitted to fabricating their work — and the fact that they could get away with it — only underscores the point. Baltimore residents are going to have to pay ever-increasing rates to cover the cost of repairing the water system's aging pipes, and they can't be asked to shoulder that burden if they don't have confidence that the bills are accurate. The system needs to be fixed, and it needs to be fixed now.
That said, we urge the Board of Estimates to delay its decision on whether to award a contract for installing new smart meters to Washington state-based Itron Inc. A protest letter filed by the losing bidder, Columbia-based Dynis LLC, raises some substantial questions about the process that should be answered before the city moves forward.
The city's procurement board is recommending that Baltimore accept Itron's $85.3 million bid, and on the face of things, it's hard to imagine how it could do otherwise. Dynis bid nearly $185 million for the project. But the very fact that the two bids were separated by such a large amount should give officials some pause about whether it's possible to make an apples-to-apples comparison between them.
Dynis argues that it is not. In its request for proposals, the city asked responding companies to bid on a variety of tasks not directly related to the installation of smart meters, such as replacing copper pipe of various diameters. In its protest letter, an attorney for Dynis says the company asked questions about how to account for that work in its bid but got no useful answers. Those items alone represent a third of the price difference between the contracts. That issue deserves exploration, not just out of a concern about whether the process was fair to Dynis but also so the city can be sure that Itron's bid accurately reflects the true cost of the work it would eventually be called on to perform.
The other significant difference between the two bids is that Dynis is proposing to provide smart meters that will send data about usage to the city's billing system automatically and wirelessly. Customers would be able to log onto a website to monitor usage continuously, allowing them to identify leaks and other problems. Itron proposes to use that technology in the city and in about a quarter of Baltimore County but to leave three-quarters of the county with a different system that will require a worker to drive by all of the homes periodically to get readings — much in the same way that BGE reads its meters now.
Baltimore County, because of its large geographic size, poses a challenge to deploying a fully wireless system. Dynis says it will be able to do so because the meters it proposes to install communicate on a dedicated slice of the wireless spectrum — a fact that contributes to the difference in cost but eliminates the potential for interference with the signal. Itron proposes to use meters that communicate on an unlicensed part of the wireless spectrum, which means they may face interference from the smart meters BGE wants to install and a variety of consumer products from garage door openers to cordless phones and baby monitors. Consequently, to employ a fully automatic system, Itron would need more repeaters and receivers than would be feasible to cover Baltimore County.
All that begs a question: If the benefits to the more advanced wireless technology are so great, is it fair for city officials to decide to stick three-quarters of Baltimore County with a less desirable system? Conversely, if the non-automated system is good enough for three-quarters of the county, why are we bothering with the higher-tech version for everyone else?
Much of the discussion of these bids has centered around the political connections of the two firms. Both of them have substantial ins with Mayor Stephanie Rawlings-Blake, who says she has been uninvolved with the process so far. She may well be reluctant to do anything but accept the procurement board's recommendation, and we certainly wouldn't suggest that the city choose Dynis' $185 million bid instead. Given that a third company whose bid was rejected for technical reasons came in at virtually the same cost as Itron, it seems likely that its price is closer to the right one.
That said, there is reason to question whether ambiguity in the request for proposals prevented the city from getting truly comparable, competitive bids, and there needs to be more public discussion about the costs and benefits of the two kinds of technology for smart meters, not to mention the equity of creating a system in which some customers have one and some have the other. For those reasons, the Board of Estimates should defer the matter for further consideration.
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