City Ends Contract – Revenge Says Nonprofit

December 30, 2010; Source: New York Times (The Bay Citizen) | In San Francisco, a nonprofit environmental advocacy organization called Arc Ecology claims that the city of San Francisco ended its contract with the agency as an act of revenge.

Arc Ecology actively opposed the Hunter's Point Naval Shipyard redevelopment plan, especially components that included construction on state-owned parkland. The San Francisco government made its displeasure clear and denied Arc Ecology an environmental information services contract that the organization had held for almost a decade.

An investigation by the Bay Citizen suggests that this wasn't an accident, but the administration of Mayor Gavin Newsom was actively involved in terminating the Arc's contract. The redevelopment agency's four members, all appointed by Newsom, voted unanimously to give the Arc's contract to a national environmental planning and public relations firm headquartered in San Francisco called CirclePoint, an action contrary to the recommendation of the agency's executive director and staff, all of whom are employed by the State of California.

According to the Bay Citizen, four out of five external reviewers of the competing proposals for the contract rated Arc Ecology higher than CirclePoint. The Arc has filed a federal lawsuit against the city's redevelopment agency alleging that its free speech rights have been violated and its advocacy on the Hunter's Point project should have had no effect on its eligibility for the contract.

According to the article, "the case could help determine the extent to which city officials can require contractors to fall in line with city policies." The city's response is to call the Arc's position "sour grapes." The president of the redevelopment agency made his position clear: "As a consultant, I have my feelings and sometimes I don't agree with all my customers, but I don't bite the hand that feeds me. It's not good policy."

This is a controversy worth monitoring. Should nonprofits swallow their values, principles, and technical analysis in order to adhere to the political stances of the government agencies that hold their contracts? Can and should government contract money buy acquiescence and silence? Alternatively, should government agencies have to contract with groups that, despite their technical qualifications, hold positions at odds with other governmental policies and agendas?—Rick Cohen