Contracts for professional services target of Detroit reform.

CHICAGO -- The way Detroit awards contracts for professional services is about to change.

Mayor Dennis Archer and members of the city council are working on plans that would mandate a request for qualifications or a pre-qualifying process for professional services, including legal and bond underwriting services. In addition, proposals already being formulated to give more city contracts to minority- and woman-owned firms could be extended to include-professional services, city officials said.

The Archer Administration has drafted an ordinance that would essentially mandate a request for qualifications process so the city can establish a qualified list of contractors for professional services, said Kay Schloff, a supervising assistant corporation counsel for Detroit.

The process mirrors one undertaken by the mayor in April, when he sent a request for qualifications to about 40 investment banking firms. A letter from Archer asked bankers to submit information about their expertise and "commitment to service and support major urban centers."

The intent of the request was to identify firms that appeared "willing and able" to serve Detroit's needs, according to Archer's letter. The letter also said the City would be sending out requests for proposals for specific bond issues, including $180 million of refunded and new deficit funding bonds. The request marked the first for Detroit's bond business in at least 20 years.

Detroit city council member Mel Ravitz said the selection of firms for professional contracts under former Mayor Coleman Young, who left office in January after serving five terms, "was almost whimsical."

Ravitz said he is preparing an ordinance that Would require firms interested in obtaining professional services contracts with the city to prequalify themselves, possibly through a request for propOsals process. Firms judged eligible to provide a particular service to the city would then be asked to bid on that service, Ravitz said.

"We want to put some controls on that selection process," be said.

Meanwhile, the administration and the council are working on proposals to replace a 1983 ordinance that required Detroit to award at least 40% of the dollar value of city contracts to minority- and woman-owned firms. The ordinance was found to be unconstitutional by the U.S. District Court in Detroit in July 1993.

Proposed replacement ordinances are not being drafted to include the city's professional service contracts. Still, there is a possibility that those services could be folded into an ordinance in the future.

Ravitz said the proposals for a professional services ordinance and for a minority- and woman-owned firm ordinance "may intersect depending on what is proposed."

Cliff Russell, Archer's spokesman, said the mayor would support the inclusion of professional services in a minority set-aside ordinance.

However, city officials working on drafting replacement ordinances said that set-asides for minorities and women may not work, given the federal court's 1993 decision. Instead, they are focusing on giving Detroit-based and small businesses a better opportunity to obtain city contracts.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER