Dive Brief:
- Los Angeles could potentially see at least two new entrants in its RecycLA commercial waste franchise system, according to a memo from city staff. GreenWaste and CR&R both submitted bids to win eight-year contracts that would take effect in February 2027.
- Current service providers Athens Services, WM, Republic Services, Nasa Services, Universal Waste Systems and Ware Disposal also submitted bids. LA Sanitation and Environment deemed submissions from Ware and new bidder Valley Vista Services “nonresponsive” based on requirements under the city’s Business Inclusion Program, meaning their bids may not move forward.
- LASAN is requesting the Los Angeles Board of Public Works approve its evaluation of the bids at a meeting today, which then enables the agency to begin negotiating contracts.
Dive Insight:
The RecycLA system, which launched in 2017, reshaped competition in the L.A. market by setting up exclusive contracts in 11 zones. LASAN’s decision to rebid the contracts may create another opening for new players.
The program covers commercial accounts and multifamily buildings with five or more units, totaling approximately 66,385 customers. LASAN services smaller multifamily buildings and single-family homes.
In addition to the initial eight-year terms, haulers could get an automatic two-year renewal if they meet landfill tonnage reduction requirements during calendar year 2032. LASAN may also grant two additional five-year extensions.
RecycLA customers generated nearly 1.6 million tons of waste in 2024, with under 19% of that ending up in blue or green bins. The program saw a bumpy start and hasn’t fully achieved certain waste reduction goals envisioned at launch, but service has since improved and proponents point to multiple other benefits.
They say it helped guarantee access to blue bin recycling, improved labor standards, led fleets to convert to compressed natural gas, yielded at least $175 million in waste and recycling facility investments and more.
The rebid process kicked off in 2024 when haulers couldn’t reach an agreement with LASAN about terms to amend and extend their existing contracts. Sticking points included customer fee structures, fleet electrification, organics collection pricing and other items.
Many things changed since the program launched, including the enactment of California’s SB 1383 organics recycling law, implementation delays due to the pandemic and fluctuating state or federal fleet emissions standards.
The list of contracted haulers has also changed since launch, when Athens bought fellow awardee CalMet Services in 2022. It could change further if Ware’s bid is ultimately deemed nonresponsive.
The RFP required bidders to complete outreach to various categories of small businesses through LA’s Business Inclusion Program and consider subcontracting opportunities. LASAN took issue with the submission timing and nature of responses provided by Ware and Valley Vista. Both companies disputed this, according to the city memo.
Under the current contracts, Athens has four zones, WM and Republic each have two and the remaining haulers each have one.
The RFP allowed haulers to bid on multiple zones, with three smaller zones intended to provide opportunities for smaller companies. LASAN may award multiple zones to one hauler, with the stipulation that no company covers more than 49% of all customers.
A contract win would provide a unique opportunity for San Jose-based GreenWaste, which started in 1991 and sold to a Macquarie Asset Management fund in late 2021. The company has made some small acquisitions since then, and currently serves 22 municipal franchise agreements, but hasn’t notably expanded outside its service area. It announced new leadership within the past year including a CEO, COO and others focused on sales growth.
“GreenWaste appreciates the City of Los Angeles’ consideration of us as a partner helping to achieve the objectives of the recycLA contract,” said Sarah Cafasso, director of marketing and communications, via email. “We'd welcome the opportunity to support Southern California communities in achieving their SB1383 goals and compliance requirements through our industry-leading diversion strategies, cutting-edge technology and proven cost-effective customer service offerings.”
CR&R, founded in 1965, is owned and operated by the Ronnenberg family. The Stanton-based company services approximately 50 municipal contracts throughout Southern California, including in Los Angeles County. CR&R has contracted with LASAN multiple times before, including to process material at its anaerobic digester, process recyclables and haul waste from a city-owned transfer station.
Other major companies that bid on RecycLA before did not pursue contracts again this time.
Recology once looked to enter the Los Angeles market when RecycLA was initially discussed, with support from labor advocates, and purchased Crown Recycling’s assets as part of this plan. The company was recommended for selection by BPW in 2017, but ultimately didn’t move forward and sold those assets to Athens. Waste Connections also bid on the initial RecycLA contracts but was not selected.
Following negotiations, LASAN will need to secure BPW’s approval to execute and award contracts. Final contracts will also be subject to approval from the Los Angeles City Council and the mayor.
