Endorsement: The way S.F. does business is broken. Prop E would help

In order to run, cities need people and stuff. 

Things don’t work without trucks and toilet paper and computers and train cars. Cities also need contractors who can fix things and run programs that government workers aren’t equipped to handle on their own. 

Nearly one-third of San Francisco’s $16 billion annual budget is allocated to procuring these goods and services. Yet the seemingly mundane act of distributing those funds has become a gigantic Gordian knot.

As the urban think tank SPUR has documented for years, San Francisco’s contracting system has become overly complex, politicized and inefficient. Our municipal codes include the words “contract” and “procurement” more than 8,700 times. Seemingly straightforward tasks like buying software or hiring a contractor can require months of negotiations, approvals, waivers and trips between departments — far more complex than the way it works in the private sector. According to the City Administrator’s Office, the length of time to process a single contract can range from 8½ months to more than 1½ years. And fulfilling a single procurement process costs roughly $25,000 — even if the contract itself is only worth $25,000.

Some procurement regulations exist for good reasons — public money should not be spent casually, and city contracts should be competitive and transparent to stem corruption. But at some point, safeguards accumulate into something else: a system so cumbersome that the process itself starts wasting precious city funds and undermining the public interest.

San Francisco contracts are governed by rules scattered across more than 100 sections of city code. Different departments maintain at least five separate Microsoft contracts, 20 training systems, multiple email systems, servers and firewalls, and 14 document-management platforms. City contracts sometimes have as many as 14 departments involved in the process. 

Unnecessary complexity costs money and causes frustration and delays; procurement bureaucracy was one of the reasons behind San Francisco’s now infamous $1.7 million toilet debacle.

City rules make it harder for departments to replace obsolete technology or undertake basic repairs. Their complexity discourages smaller firms from bidding on city work — ironically stymieing competition via mechanisms that were intended to encourage it. The system has grown so complicated that the city routinely needs waivers from its own rules simply to get things done.

When no one is in charge, no one is accountable.

Proposition E on the November ballot aims to clean this system up. It is part of a broader package of City Charter reform measures from Mayor Daniel Lurie.

The measure puts one official, the city administrator, in charge of proposing purchasing rule changes, subject to rejection by the Board of Supervisors or the mayor within 60 days. It brings multiple departments under consistent citywide purchasing oversight — including the Municipal Transportation Agency, the Port of San Francisco, the airport and the Public Utilities Commission. It updates board-approval contract thresholds, unchanged since 1996, to reflect nearly three decades of inflation; only contracts of $25 million or more and certain revenue contracts and leases above $4.5 million would be subject to supervisor scrutiny (with a few caveats, such as for some long-term contracts).

Prop E would give the city administrator more authority to establish citywide standards for contracting, procurement, technology and coordination of capital projects. Supporters argue this would professionalize decision-making, cut administrative costs and delays, make it easier for small businesses to compete for city work, reduce redundant systems and contracts, and create clearer accountability. It would also help officials and voters identify who is accountable when something goes wrong. 

The measure also increases the term of the city administrator, who is appointed by the mayor and confirmed by the Board of Supervisors, from five to 10 years — a move designed to provide professional consistency in the office and insulation from political pressure.

Proposed procurement regulations must be published for public comment. And importantly, the measure carves out areas — including contractor wages and benefits, workplace health and safety, local-business requirements and project labor agreements — from the administrator’s exclusive legislative authority.

Alicia John-Baptiste, the city’s chief of infrastructure, climate and mobility, told the editorial board in an endorsement interview that putting these processes under professional — instead of political — oversight will “make it much easier for the city to administer and manage the system, and also easier for people to work with us.”

“I ran on fixing a broken, bloated, corrupt system,” Mayor Lurie told the editorial board of Prop E and the rest of the package of charter forms his administration has put forth. “Eighteen months in, it is something that I still see needs a lot of work and a lot of fixing … It is a system that works for the insiders and power brokers. They know how to game this system. Frankly, I want to fix it so that we can deliver better services for everyday San Franciscans.”

There is little opposition to the measure. Yet the opponents, while few, do have some reasonable objections.

Twenty-five million dollars is a lot of money. Board hearings occasionally expose questionable contracts and provide an important public forum for asking where taxpayer dollars are going. Specialized agencies such as the Municipal Transportation Agency and the Public Utilities Commission have operational needs that do not necessarily fit neatly into a uniform purchasing system. Perhaps most concerning: Centralizing authority can produce consistency, but it can also produce mistakes on a larger scale. Opponents of the measures point out that this measure isn’t being proposed in isolation; it is part of a broader package of reforms to centralize political power in San Francisco.

Prop E puts a lot of power in the hands of one individual. And while supervisors or the mayor could reject the city administrator’s ordinances, they generally would be unable to rewrite them or propose competing procurement rules.

But these concerns, while valid, do not preclude our support for the measure.

We agree with John-Baptiste’s central premise — that Prop E is “going to take weeks of processing time off relatively routine purchases,” which will improve neighborhood services, speed up permitting and reduce wasteful spending.

Political oversight over contracting and procurement has resulted in a system in which the failures are abundantly clear. San Francisco has little to lose and much to gain by professionalizing the way it does business. Vote yes on Prop E.

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