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Attorneys at Law
Ronald C. Lewis
City Attorney, Houston
900 Bagby St., 4th Floor
Houston, TX 77002
John J. Gillespie
Chief Procurement Officer
City of Houston
901 Bagby B30
Houston, TX 77002
This Firm has been retained by EcoHub-Houston, LLC (EHH) to represent its
interests in connection with the City of Houstons Request for Proposal known as the
Single Stream Recycling Processing Services - Solicitation No: S74-T25967 (Single
Stream Recycling RFP). Inasmuch as EHH has delegated to the undersigned the
authority to bind EcoHub-Houston LLC, please accept this letter as EHHs official
notification of its Pre-Submittal Protest regarding this Single Stream Recycling RFP.
SUMMARY
On April 7, 2014, the City of Houston issued its Notice of Request for Proposal
(RFP), Solicitation No. S74-T25967, for what it described as a One Bin For All
Municipal Solid Waste and Recyclables Services program for the City of Houston (One
Bin For All RFP). After an extensive process of evaluation and elimination, the seven-
member evaluation committee for the City of Houston unanimously recommended
entering into best and final talks with EHH pertaining to the One Bin For All project.
After further numerous meetings and discussions, the City ultimately accepted the offer
of EHH and informed EHH of its actual selection as the winner of the One Bin For All
December 15, 2016
Page 2
On October 14, 2016, the City posted a new Request for Proposal known as the
Single Stream Recycling Processing Services - Solicitation No: S74-T25967 (Single
Stream Recycling RFP). This Solicitation is a rigged bid designed to kill the One Bin for
All concept once and for all, and to maintain the status quo with regard to municipal solid
waste management in the City. This rigged bid will result in Waste Management securing
a long-term low diversion and very expensive single stream processing contract. This
rigged bid will also result in Republic Services keeping the long-term disposal contract to
landfill 90% plus of all of the Citys waste in a 250 high mountain of a landfill, which is
unlined and surrounded by thousands of Houston residents, for decades to come.
Notwithstanding the terrible long-term environmental and social damage caused by
maintaining the status quo, the citizens of Houston will be subject to a new and perpetual
yearly garbage fee/tax of $100,000,000 per year, as recommended to Channel 2 News by
Director Harry Hayes in July of 2015 to support the Citys recycling program.
Mayor Sylvester Turner, in his respective official capacity as Mayor of the City of
Houston, as well as Harry Hayes, in his respective official capacity as the Director of the
Department of Solid Waste Management for the City of Houston, have each engaged in
multiple ultra vires acts. More specifically, Mayor Turner and Director Hayes have acted
without any constitutional or legal authority by ignoring and violating the constitutional,
statutory, common law, property, contractual and other equitable and legal rights of EHH,
arising and emanating from the One Bin For All RFP. Despite the fact that the City
accepted EHHs bid and selected it to be the contractor for the One Bin For All project,
thereby triggering property and contractual and other rights in its favor and for which
same may be protected and/or enforced in court, both the Mayor and the Director ignored
and failed to respect this factual and legal reality, choosing instead to refuse to allow the
City to sign a final contract with EHH, and, without constitutional or legal authority,
permitting the illegal issuance of the Single Stream Recycling RFP, wrongfully
cancelling the One Bin For All RFP, and for allowing a rigged Single Stream Recycling
RFP to be issued which fails to satisfy even the minimum requirements of due process,
fairness or equality of opportunity under the facts and the law pertaining to government
procurement contracts.
BACKGROUND FACTS
In 2012, the City of Houston submitted a proposal entitled One Bin For All to
the Bloomberg Philanthropies Mayors Challenge, which is a competition designed to
inspire American cities to generate innovative ideas that solve major challenges and
improve city life, and that ultimately can be shared with other cities to improve the well-
being of the entire nation. The Citys One Bin For All proposal suggested that a facility
could be built in Houston that would mechanically and biologically segregate trash into
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its recyclable and energy components from a mixed waste stream that would include
garbage, recyclables and yard waste combined into one bin and collected with one route.
Through the One Bin For All project, the proposal suggested employing game-changing
technology to allow for the disposal of all residential wasteboth organic and
recyclableinto one bin. The project was anticipated to achieve a recycling and landfill
diversion rate of up to 75 percent within two years.
On March 13, 2013, the City was awarded a $1,000,000.00 prize from the
Bloomberg Philanthropies Mayors Challenge for the One Bin For All concept. The City
was selected as one of five award-winners from a pool of over 300 applicant cities. On
information and belief, according to the Citys grant submission, the $1,000,000.00 prize
was supposed to be used by the City to pay for the procurement costs for the One Bin For
All concept. As will be described more fully herein, this did not happen1.
To make this innovative dream a physical reality, the City thereafter issued a
Request for Qualification (RFQ), Solicitation No. S10-Q24644, on June 12, 2013,
seeking qualified entities interested in implementing the One Bin For All concept. That
same day, the City issued a press release, touting the program as
a first-of-its kind innovation that will revolutionize the way we handle trash, achieving
high-volume recycling and waste diversion, reduced greenhouse gas emissions and lower
operating costs.
On June 27, 2013, the City held its Pre-Qualification Submission Conference,
whereby fifty-five (55) different companies from around the globe expressed an interest
in submitting bids. Although former Mayor Parker repeatedly lobbied industrial waste
giant Waste Management to submit a bid, this company refused to do so, stating that they
simply did not have a solution for mixed waste processing.
After over six months of intense work and vetting, EHH submitted its proposal of
approximately 3000 pages to the City in response to the RFQ. This submittal by EHH
included comprehensive detailed information including:
1
What happened to the $1,000,000 prize funds that were supposed to be used to cover procurement costs
for the One Bin For All project? Upon information and belief, the $1,000,000 prize was intentionally
misdirected to the Citys General Fund and was not used for the intended purposes of the grant, which was
to pay for the procurement of the One Bin For All submission.
December 15, 2016
Page 4
This massive volume of technical information was meant to educate the evaluators
regarding every aspect of the project submittal. The EHH submittal dwarfed the other
respondents submittals, at 6 full-size file boxes versus a smattering of envelopes and
medium size Federal Express Boxes. Eleven (11) other companies submitted proposals,
too. Of those twelve (12) proposers, the City created a short list of six (6) qualified
applicant finalists. EHH was selected as a finalist and was placed on that short list.
On April 7, 2014, the City issued its Notice of Request for Proposal (RFP) for
what it described as a One Bin For All Municipal Solid Waste and Recyclables
Services for the City of Houston. This Notice, which was issued pursuant to Chapter 252
of the Texas Local Government Code, was directed solely to the six (6) finalists deemed
to be qualified by the prior RFQ.
EHH submitted approximately 1,800 pages in response to the Citys One Bin For
All RFP. This submittal by EHH included comprehensive detailed information
including:
vii. references;
viii. project financial models;
ix. system process flow diagrams;
x. project mass balance;
xi. system engineered layout drawings;
xii. engineered site drawings;
xiii. 3D color site and equipment layout artist renderings;
xiv. patents;
xv. trademarks;
xvi. project schedules;
xvii. supplier brochures;
xviii. specifications and technical presentations from every single
machinery and technology supplier (20 manufacturers and technology
suppliers in total);
xix. material recovery graphs;
xx. financial institution information for the project finance team;
xxi. proposed site information;
xxii. project financing LOIs; and
xxiii. commodity broker information.
This massive volume of technical information was meant to educate the evaluators
regarding every aspect of the project submittal. The EHH submittal dwarfed the other
respondents submittals, at 4 full-size file boxes versus a smattering of envelopes and
medium size Federal Express Boxes.
After an extensive RFQ and RFP process of evaluation and elimination, the
seven-member evaluation committee for the City of Houston unanimously recommended
entering into best and final talks with EHH for the One Bin For All project. After
numerous meetings and discussions, the City ultimately accepted the offer of EHH and
informed EHH of its actual selection as the winner of the One Bin For All RFP on
February 19, 2015, thereby triggering an enforceable contractual relationship between the
City and this Contractor.
The economic and environmental benefits of the EHH proposal versus the status
quo are immense. For example, EHHs One Bid For All proposal results in an estimated
annual savings of up to $40,000,000.00 to the City and its taxpayers through route
consolidation, injects upwards of $2,000,000,000.00 worth of new yearly economic
activity, provides up to $800,000,000 of privately financed infrastructure development
and creates up to 2,800 direct and indirect jobs. Furthermore, because the proposal
guarantees a 75% diversion of waste from landfill burial, this will cause the following
environmental benefits: 1,000,000 metric tons of GHG reduction, which is the equivalent
to taking 200,000 cars off the road, saving 2,100,000 trees, saving 1,400,000 barrels of
oil, saving $200,000,000 of electricity, and saving 1,100,000,000 gallons of water. EHH
can build 14 similar plants to process the 27,000 tons of solid waste per day generated in
December 15, 2016
Page 6
the Greater Houston Area and make the entire region a waste free zone that would be the
envy of the planet. The associated benefits of a Waste Free Houston program would
increase 14-fold. The EHH proposal not only meets, but exceeds, the goals of waste
management clearly articulated by the City of Houston and the State of Texas.
Furthermore, Houston is a c40 City (www.c40.com) and, as a member, has committed to
reduce its GHG emissions. There is nothing that will have more of a positive effect on
GHG reduction than EHHs proposal.
It is also important to note that all of the technologies included in EHHs winning
proposal are commercially proven and have been successfully operating in America and
internationally for decades. The technologies are also fully performance guaranteed by
the individual industry leading manufacturers, as well as by the systems integrator that
provides the entire integrated system a company known as Stadler (which is a 225 year
old company that is a world leader in its field), performance bonded by major surety
firms, and have a full Engineering Procurement and Construction (EPC) wrap
performance guarantee (necessary for project funding) from major international
construction companies.
As of the date of the filing of this protest, the general project engineering has been
completed. Detailed project engineering will commence upon the issuance of a waste
supply contract from the City. The entire project will be privately funded in its entirety,
with no capital required by the City or any risk incurred. All project debt and equity
funding is available and essentially committed through major financial institutions. The
ideal project site is secure and meets all logistical and environmental justice
requirements. In fact, the site is the former Champion Paper Mill, only a few miles down
Beaumont Highway from the McCarty Road Landfill, where all of the Citys residential
waste is currently being landfilled. In summary, everything is essentially in place to
build and finance the project. The only missing ingredient in the final waste supply
contract from the City, which would literally take a couple of hours to complete and be
ready for presentation to City Council for approval.
Another important fact is that Republic Services opened a mixed waste processing
facility in Anaheim, CA in May 2016. The accompanying program, which Republic
Services dubbed All in One Recycling, enables its customers to put garbage,
recyclables and yard waste in one bin that Republic collects and sorts at their new
facility, where their workers do all of the heavy lifting for customers. This system is
eerily similar to EHHs sorting system proposed for Houston. It is also important to note
that Republic Services doesnt own or operate a landfill in Orange County, CA, where the
City of Anaheim is located.
h) Mayor Turner touts Houstons support for One Bin For All technology in a
letter to the U.S. Department of Energy three weeks prior to the release of the
New Single Stream Recycling RFP
In July of 2016, EHH, IBM, Lawrence Berkeley National Lab and the University
of Houston, founded and led the Circular Economy Re(Manufacturing) Institute
December 15, 2016
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CERIs overall goals are to reduce Americas energy consumption and embodied
energy by 30% and decrease GHG emissions in manufacturing processes by 25%,
generate 500,000 jobs and $300 billion in economic activity over the next decade.
On September 20, 2016, Mayor Turner provided CERI with a signed letter that
was included in CERIs DOE Grant Application submitted on September 28, 2016. The
letter from Mayor Turner stated: While recognized as the Energy Capital of the World,
the City of Houston is also an environmental leader. For example, Houston received a
$1m award from Bloomberg Philanthropies to design and implement an innovative
circular economy and materials reuse program that will position the City as the national
leader in sustainable resource management. The program, which the City is in the
process of finalizing, will achieve a minimum 75% landfill diversion rate by transforming
the waste stream into manufactured products that can be distributed into the local
economy (italics added). The letter closed with the following quote: For these reasons,
the City of Houston is pleased to join the CERI consortium. On behalf of the City of
Houston, I enthusiastically endorse CERIs REMADE grant proposal.
Even the new head of Waste Management concedes that the One Bin For All
concept is the wave of the future. Waste Managements former CEO for the past 13
years, David Steiner, was replaced by James C. Fish, Waste Managements former CFO,
in November of 2016. In Fishs first interview with the Houston Chronicle, he stated that
he wants to further explore augmented reality for technicians and innovation to replace
landfills. Fish went onto say If we dont keep up with technology, theres always a risk
that somebody develops a disruptive technology that upsets our business model.
waste, including the recyclables, being processed in the EHH facility because of EHHs
ability to fully separate mixed waste into clean and consistent material streams that can
then be converted into useful products.
On October 14, 2016, a mere three weeks after Mayor Turners enthusiastic
endorsement of CERI, the City posted Solicitation No. S74-T25967 on its website. The
Citys Single Stream Processing RFP is a rigged bid designed to kill the One Bin for All
concept once and for all, and to maintain the status quo. This rigged bid will result in
Waste Management securing a long-term low diversion and very expensive single stream
processing contract. This rigged bid will also result in Republic Services keeping the
long-term disposal contract to landfill 90% plus of all of the Citys waste in a 250 high
mountain of a landfill, which is unlined and surrounded by thousands of Houston
residents, for decades to come. Notwithstanding the terrible long-term environmental and
social damage caused by maintaining the status quo, the citizens of Houston will be
subject to a new and perpetual yearly garbage fee/tax of $100,000,000 per year, as
recommended to Channel 2 News by Director Hayes in July 2015 to support the Citys
recycling program. None of it makes any sense. Even more fundamental, none of this is
legal.
j) The scoring and methodology embedded in the Single Stream Processing RFP
is fatally flawed and rigged to enable Waste Management and Republic Services
to win
1/3 the cost of the no-bid Waste Management single-stream recycling contract executed
earlier this year, even after excluding glass from the recovery stream.
The Citys Single Stream Recycling RFP is inconsistent with Texas state policy
on solid waste management, the City of Houstons stated SWMD policies and the United
States Environmental Protection Agencys (USEPAs) solid waste management hierarchy
and environmental justice initiatives. In short, implementation of the Single Stream
Recycling program in lieu of the selected One Bin for All alternative will result in:
The current single stream program in Houston has been an abject failure, with
processing costs going from zero dollars to $90 per ton, and glass is not even collected or
processed. The Citys own numbers show that contamination rates have grown by a
staggering 50 percent in a mere 3 years. Removing glass will increase the contamination
rate by another 15%. Extending this travesty will only harm the citizens of Houston.
the same degree of protection from environmental health hazards, and equal access to the
decision-making process to have a healthy environment to live, learn and work. Having
parallel procurement processes covering the same material creates unnecessary risk and a
conflict with City procurement policy that states that procurement processes must be
open and fair.
k) The Single Stream Recycling RFP claims to be competitive, open and fair,
when in fact it is a corrupt attempt to reach a predetermined outcome
An excessively short timeline not only for the RFP response a mere 30 days for
55 page procurement plus design and construction times that are known to be
impossible for a complex facility, indicate that there is little interest on the part of the
City in producing a procurement process that was truly competitive, open and fair.
Instead, it is clear that this is a fraudulent, biased and unfair Single Steam Recycling RFP
process that is solely focused on awarding the contract to the incumbent waste processor.
The way that the Single Steam Recycling RFP is structured makes it impossible for any
bidder without an existing material recovery facility to win. Thus, no matter how poorly
the current single stream program is being run, the requirements are rigged to give the bid
to an incumbent player. Moreover, given the rushed nature of the Single Stream
Recycling RFP, the biased language for operational and financial requirements and the
impossible design and construction timelines, it is obvious that no serious consideration
of alternatives is being given, in flagrant disregard of city procurement policy and honest,
best practices management of public financial resources.
In another indication that the Single Stream Recycling RFP is biased against
actual alternatives is that the contract term is only for 10 years. It is well-known that
private infrastructure projects of this magnitude cannot be funded for a contract term less
than 20 years.
Accordingly, both the structure and the content of this RFP is simply an attempt
to maintain the status quo in an antiquated industry. One thing that is clear is that one of
the principal incumbents in the city Republic Services, which owns the largest landfill
in the city benefits tremendously from the Single Stream Recycling RFP as written.
This is the case because, given the poor performance of these types of programs, there is
little likelihood that the vast majority of materials discarded by Houstonians will end up
anywhere but the landfill.
CONCLUSION
Mayor Turner and Director Hayes have acted without any constitutional or legal
authority by ignoring and violating the constitutional, statutory, common law, property,
contractual and other equitable and legal rights of EHH, arising and emanating from the
One Bin For All RFP. Despite the fact that the City accepted EHHs bid and selected it
to be the contractor for the One Bin For All project, thereby triggering property and
contractual and other rights in its favor and for which same may be protected and/or
enforced in court, both the Mayor and the Director ignored and failed to respect this
factual and legal reality, choosing instead to refuse to allow the City to sign a final
contract with EHH, and, without constitutional or legal authority, permitting the illegal
issuance of the Single Stream Recycling RFP, wrongfully cancelling the One Bin For All
RFP, and for allowing a rigged Single Stream Recycling RFP to be issued which fails to
satisfy even the minimum requirements of due process, fairness or equality of
opportunity under the facts and the law pertaining to government procurement contracts.
For all of the foregoing reasons, EcoHub Houston, LLC, hereby objects and files
this bid protest.
Andy Taylor