With a looming $1.5 billion budget deficit on the horizon, the city of Mississauga is looking to ensure it leaves no money on the table. The City has put out the call for a new company to manage its collection agency services for the next five years.
“Enforcement is a big source of revenue for the city,” city buyer and team leader Brian Smith told YourMississaugaBiz.com. “And you know, given that provincial funding is sort of limited, we need to chase whatever kind of funding sources that we can.”
“Collections are a big source of that and of course enforcement is too.”
Smith said the request-for-proposal posted earlier this week on the bidding website biddingo.com includes collections that fall under the Provincial Offences Act, such as parking tickets and bylaw infractions.
Not all city debts will be handled through this RFP. Smith noted there is a different process for unpaid property taxes. “That actually goes through a bailiff service that we’re going to be issuing shortly as well,” he said.
Previously, the contracts were awarded to three vendors: first placement collections, accounts that outsourced to a debt collector for the first time, were split between two companies, Nor-Don and iQor. Second placement collections, those that have been returned to the original creditor due to lack of payment by the account holder, were awarded to Allied National Credit.
Smith said in this particular case, municipal rules didn’t allow for a renewal of the contract.
So far, ten companies have paid for documents, including Nor-Don. However, Smith was careful to note Nor-Don would not have any advantages over the other bidders, despite being an incumbent contract holder. “They’re on the same ground as everybody else is,” he said. “They did good work, it’s just time for a process refresh.”
Smith recommended potential bidders should pay careful attention to the bid documents for the minimum qualifications. “There’s a bit of an executive summary that tells what our expected volumes are, tells them how we expect to receive pricing and how calls are expected to be handled,” he said. “It’s pretty detailed.”
Smith said there was some increase in the number of collections, but it was expected to match the city’s expansion. However, he mentioned the contract was for a commission-based service. “We don’t actually pay the vendor anything to do this work,” he said. “They go after the collections and then they earn a pre-defined percentage based on how much they collect.”
Smith also stressed that the “best-value bid” evaluation would be comprised of technical merit and price, so lowball bids wouldn’t necessarily have a higher possibility of success. “It has to be balanced,” he said.
The bid deadline is on December 4 at 2 p.m. Interested vendors are also invited to attend a public opening that afternoon at 2:30 p.m. at the Mississauga Civic Centre at 300 City Centre Drive.