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Pittsburgh could change its procurement rules amid scrutiny over no-bid contracts

A large building with columns in Downtown Pittsburgh.
Kiley Koscinski
90.5 WESA
Pittsburgh's City-County building.

Amid scrutiny from Allegheny County District Attorney Stephen Zappala about how the city of Pittsburgh hires vendors, City Council is poised to tighten up oversight of the city's contracting procedures. A final vote is scheduled Monday for an ordinance that members unanimously approved last week.

One change would require an additional level of review by city attorneys when the administration seeks to issue a contract outside the usual bidding process. Another change would limit how much work the city can parcel out to firms on a list of pre-approved vendors.

Typically when the city plans to pay an outside supplier for goods or services, it must post notice about the opportunity so businesses can bid competitively on it. But there are cases in which the city can bypass that process, choosing a specific vendor due to expertise or other unique qualifications. (A tech company with exclusive rights to software used by the city, for example, could be hired to service that product without a bidding process.)

But how often the city waives the bidding process has been the subject of scrutiny by the Allegheny District Attorney’s office.

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Zappala’s inquiry originally stemmed from questions in August about the city’s dealings with Matrix Consulting Group. A study compiled by Matrix recommended reassigning some patrol officers to other units and suggested that the city has an adequate number of police, despite staffing at least 100 fewer than the force is budgeted to have.

The Gainey administration has largely disregarded the study’s recommendations, and officials say they have no plans to reduce staffing of patrols. But Zappala said his office heard concerns about the Matrix contract, and said the study was designed to reach a “preordained outcome,” that recommended “defunding the police.” Zappala expanded his inquiry in September to include all no-bid contracts dating back to 2020.

The Gainey administration has dismissed the inquiry as a re-election campaign stunt. The race for District Attorney has played up crime fears in Pittsburgh, with ads in favor of Zappala characterizing his candidacy as a way to prevent “complete lawlessness” that stems from policies espoused by progressive politicians.

But questions about the Matrix contract also arose in council. Members authorized the city solicitor to provide a legal opinion about the propriety of the agreement, and requested the controller’s office to review the city’s competitive bidding procedures.

The findings of council’s examination have not been released, and it's not clear whether it shaped the new rules.

Under council's proposal, the city’s Office of Management and Budget would need to have the law department sign off on an exemption that allows the city to pursue a no-bid contract. The added security would effectively reverse a change the city made back in 2020, when it gave the budget office sole authority to waive the rules. That was done, officials said at the time, to align with national best practices.

Council's changes also limit contracts between the city and vendors who appear on a pre-approved list. Such vendors are pre-qualified to complete work for the city, and may receive up to $1,000,000 in work orders in a given year. The changes would reduce that limit to $500,000.

According to Jake Pawlak, director of the city’s Office of Management and Budget, the new limit could spread out the work to a larger pool of providers.

“By making that process cycle faster, we might more frequently include new firms or providers," Pawlak said.

The changes would also require the mayor’s office to report to council four times a year about contracts that were signed outside of the usual procurement process.

While the ordinance says the changes are required “to eliminate any perceived appearance of impropriety,” the bill’s sponsor, Councilor Anthony Coghill, said the review did not turn up evidence of misconduct.

“The press have made it out to be like we were looking into the administration and how they conducted business,” Coghill said Wednesday. “We worked hand-in-hand with the administration.”

He referred to the new regulations as a “safeguard” to prevent current “and future administrations” from misconduct.

Council president Theresa Kail Smith echoed those concerns.

"I don’t want anyone getting in trouble,” she said.

Kiley Koscinski covers city government, policy and how Pittsburghers engage with city services. She also works as a fill-in host for All Things Considered. Kiley has previously served as a producer on The Confluence and Morning Edition.