This city council is in the process of reviewing the various professional contracts that the city maintains. These include the city attorney, the city planner, the county assessor and the city auditor, to name a few.

The first contract to be reviewed was for contracted auditing services. This contract is a three year commitment, and the firm chosen will be responsible for a yearly audit of the city’s financial records and financial position. The council solicited bids for this assignment, and four firms submitted proposals for the audit work.

Disparity in Pricing

Suprisingly, there was a nearly $60,000.00 difference in price between the lowest and highest bidder. This amounted to roughly a 50% difference in price, with the low bidder being in the $100,000.00 range and the high bidder in the $160,000.00 range.

Needless to say, this disparity caught the eye of several council persons at our meeting two weeks ago. At that meeting, there had been an initial motion to approve the interim city manager’s recommendation. His recommendation was to award the project to Plante Moran, the highest bidder. While I am not disputing the ability of this widely respected firm, I thought it was best to study the other proposal more closely so that a more informed decision could be made.

Apparently others agreed, because the matter was tabled two weeks ago. Each of the four firms was asked to come to the meeting of February 11 to discuss the matter and to answer questions regarding their proposal.

Due Diligence

Over the course of the last two weeks, I studied the proposals and drew up an outline of how I thought I should proceed. I decided that I would begin my inquiry by looking into the firm that offered the lowest bid, Post, Smythe, Lutz & Ziel of Plymouth.

In fact, the audit partner from that firm, Rana Emmons, was the only representative present at the council meeting two weeks ago. At that time, Ms. Emmons made a brief presentation and answered our questions. The fact that she had chosen to attend the meeting left an impression on me, and I think several other council members also commented on this.

I spoke with Ms. Emmons several times over the past two weeks and remained impressed with her credentials, experience and candor as it related to her proposal. I also took the time to talk with four of her professional references. Each of these references was from a city or township in the metro Detroit area. Each of these references gave a glowing, personal review of how satisifed they were with the service of Post, Smythe, Lutz and Ziel and with Rana Emmons in particular.

Easy Decision

For me, the decision came easily. Although I made note of the city managers suggestion that we approve hiring Plante Moran, I could not in good conscience approve a firm who’s bid was over 50% higher than that of Post, Smythe, Lutz and Ziel.

Couple this with the fact that Ms. Emmons comes highly credentialed and highly respected made the decision easier. On a further note, Ms. Emmons told the council that as the Audit Partner in this engagement she will spend 80% of the time working directly on this audit. This percentage of Audit Partner involvement is over 100% more than any of the other proposals. This fact did not go unnoticed by me or by other council members.

The End Result

There was a motion on the table from our last meeting to award the contract to Plante Moran. After discussion, this motion was voted on and rejected by a 6-1 vote of the council.

At this point I made a motion to award the contract to Post, Smythe, Lutz and Ziel. This motion was supported by Concilman Jeff Matis. After more discussion, a second vote was taken and the council awarded the contract to Post, Smythe, Lutz and Ziel.

Home Run

I am confident that Ms. Emmons will perform as an exceptional Audit Partner who will not only provide great technical service, but great personal service as well. I think the city and its residents hit a home run on this issue, and I was proud to be a part of the decision making process.

This entry was posted Tuesday, February 12th, 2008 at 9:46 am and is filed under Budgeting, My Views. You can leave a response, or trackback from your own site.