If this deal is designed to save the municipality money alone then I suppose it could work out for them as an individual customer--lowest bid gets the job.  Officials might also consider it a major win if they select a company that is head and shoulders above the others in providing a particular service that the city truly desires such as recycling, brush removal, or open top container availability.  The city should be able to choose its own provider because of the benefits it provides them as an individual customer.  

However, when officials jump head first into determining what services all their residents want and at what price they are flying blind.  I might want to recycle or I might not be able to afford it.  I might compost my own leaves and not need the city to deal with it.  I might never need an open top and prefer to throw my construction debris on the neighbor's lawn.  

If the city is promoting this as a boon to area residents beyond the very short term they are either ignorant or lying.

Competition between providers is the only way to assure that individual customers will get the best possible service for the dollar they are willing to spend.