Down The Sewer Pipe – Politically Speaking

After you have been in office for a few months, make some inquiries about contracts are handled by the entity that you serve.  Contracts are all about doing the best with as little cash as possible, without the public’s money being squandered.

The city of Portland Oregon is a good example of how not to write contracts.  The latest example is just another case of remarkably dumb decision, being made by less than smart people.  Portland Oregon negotiated a contract with the only bio-diesel manufacture in the state, and some farmers in eastern Oregon.

Anyone with half a brain knows that the price of seed, beans, name a commodity, fluctuates all the time. What the city did was, by contract; tie the price that they pay for bio-diesel to the price of Canola seed, as sold on the futures market.  They failed to place a clause in the contract, which would allow for the city to seek lower priced bio-diesel from out of state.

The result is predictable; the city pays more for bio-diesel from the manufacture than the public pays at the pump.  Private enterprise buys its bio-diesel, for resale, from the cheapest source possible.  When the futures for Canola oil rose, so did the price that the city of Portland Oregon pays for the finished product.

In my view the city of Portland Oregon should have had two things in the contract.  A firm commitment for the price of bio-diesel for a twelve-month period, and a “get out of jail” clause, this would have locked in the price of the bio-diesel for twelve months. And it would have allowed the city to find cheaper fuel elsewhere, if the price of bio-diesel fell.

Don’t make the same mistake that they did by being locked into an unintelligent mindset

Sherman