3 companies bid to oust Waste Management for Omaha, Nebraska contract
- Omaha, Nebraska recently unveiled the four bids it received for a new 10-year collection contract that will run from Jan. 2021 through 2030. Bidders include incumbent Waste Management, Waste Connections, FCC Environmental and West Central Sanitation.
- The city currently pays Waste Management approximately $15 million per year. Bidders presented pricing for six different options, with varying collection frequency and yard waste service levels. For the most robust option — weekly collection of three different streams — annual pricing ranged from $21.91 million to $31.82 million.
- “The bids received are within the estimates we expected and most show our costs will nearly double to continue to the service we now provide,” said Mayor Jean Stothert in a statement. “This decision will impact every taxpayer for the next ten years or more and we will ask the Council to approve a contract that provides services that meet our needs, at a price we can afford."
Omaha had been serviced by the same company, Deffenbaugh Industries, since 2006. Waste Management took over the contract following a 2014 acquisition. The company's operations in this market have been afflicted by labor shortages and challenges for years, creating an ongoing struggle with city officials over yard waste collection, in particular. After many months of warning, Omaha began to fine Waste Management for failure to fulfill its obligations, and that tab had racked up to more than $300,000 as of last fall.
Leading up to this new RFP, Omaha contracted with SCS Engineers for technical assistance, and also surveyed residents for a cart-based collection test. The response was overwhelmingly positive — hence the decision to require implementation of a 96-gallon cart system. Smaller carts will be available on request. As for the type of collection itself, Omaha technically only requested three options — various iterations of commingling yard waste and doing some collections biweekly. Pricing was also requested for a yard waste sticker program and spring cleanup service.
For the fully loaded option, Waste Management's bid came in the highest at nearly $31.82 million, followed by Waste Connections at $31.15 million, FCC at $28.28 million and West Central at $21.91 million.
While the selection of any company besides Waste Management would be notable, this could be a particularly big victory for FCC. The Spanish company has been growing its US presence in recent years, including the award of a big Houston recycling contract in 2018, but has yet to expand outside of Texas and Florida. If successful here, the company could lay claim to one of the largest municipal collection contracts currently up for renewal in the U.S.
Following a multi-stakeholder review process, including assistance from SCS, Stothert anticipates making a recommendation to the Omaha City Council as early as late March. Even if Waste Management ends up losing out, the company could still be expected to get a piece of the action. It runs the Pheasant Point Landfill, where Omaha reportedly spends an estimated $6 million a year in tipping fees.
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