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OIG 12-019 Closing MemorandumMEMORANDUM
To: Robert Payton, City Manager, City o./Jamar
From: John W. Scott, Inspector General {_ I~. Date: February 5, 2013
Subject: OIG Closing Memorandum Re: Allegations ofFavoritism in the City ofMiramar's Procurement Process, Request for Proposal No. 12-11-14for Landscape Services, Ref. OJG No. 12-019
The purpose of this memorandum is to inform you that the Broward Office of the Inspector General (OIG) has completed its investigation and procurement review of the above-captioned landscape services solicitation. The OIG received allegations that a Public Works official with the City of Miramar engaged in misconduct by manipulating the procurement process to favor a specific vendor. The OIG conducted a comprehensive review of the procurement process and an investigation of the specific allegations of misconduct. The OIG investigation of the city employee' s conduct did not substantiate the allegations of misconduct.
However, the OIG procurement review identified a ntnnber ofconcerns with the solicitation, evaluation ami award processes. In addition, the city ' s internal investigation of the alleged procurement improprieties resulted in inaccurate information being provided to the city manager and commission. The OlG informed the Chief Procurement Officer (Purchasing Director) and other city officials of its concerns, and the city has proactively addressed some of those concerns pursuant to a new procurement soli citation. This memorandum documents the OIG's investigation , procurement review observations and contains additional recommendations to improve the internal processes to make the city's procurements less vulnerable to possible abuse.
0/G's Review ofthe Procurement Process ldentijiell Multiple Concerns
On April 2, 20 12, the city advertised RFP No. 12-1 1-14 for landscape maintenance services for 59 parcels of city property, referred to as " locations" in the RFP, including roadways and rights of-way among other municipal properties. The RFP indicated the term of the contract would be for a period of two years with an option for three one-year renewals, for a total possible contract term of fi ve years. The annual estimated value of the contract was $540,000 with an approximate total value of $2.7 million, including the renewals. The contract would be administered by Public Works, specifically the Operations Superintendent for Public Works, who served on the selection committee.
On April II , 2012, a mandatory pre-proposal meeting and site visits to 40 of the locations listed in the RFP were conducted. Thirteen vendors attended the pre-proposal meeting, but only seven vendors submitted proposals. Se lection committee meetings were held on May 3, 2012 and May
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10, 2012, and the selection committee ranked six ofthe firms that responded to the RFP. SFM Services (SFM) was ranked first and Garden of Beauty, rnc., which bid the lowest overall price, was ranked second. The rankings were then used by Public Works to create multiple award recommendations. Ultimately, the Purchasing Director and City Manager elected not to adopt either of the recommendations from Public Works, but, instead, recommended award of each location to the lowest bidder of the four top-ranked vendors. On July 3, 2012, the City Manager placed an item on the commission agenda recommending award to the four top-ranked vendors. The item was pulled from the agenda when Mr. Henry Perdomo, the owner of Florida Turf, ranked fifth in the evaluation process, informed the city of his intent to protest the award.
Mr. Perdomo did not file a protest, but did make serious allegations of favoritism and other improprieties in the evaluation process. Specifically, he alleged that the Operations Superintendent had a connection to the firm ranked in first place, SFM, and that the Operations Superintendent steered the evaluation against Florida Turf and in favor of SFM. rn response to Mr. Perdomo's allegations, the city initiated an internal investigation wherein the Purchasing Department reviewed the procurement process. On August 6, 2012, the Procurement Director issued a memo to the City Manager indicating that his investigation found that there were no improprieties in the process conducted by his staff.
rn August 2012, as part of its Contract and Procurement Oversight Program (CPOP), the OrO initiated a review of the procurement process, at which time the city elected to postpone award of the contracts. The oro review noted multiple concerns, including deficiencies in the solicitation document and the subsequent evaluation process. As part of its review, the OrO analyzed all documentation related to the procurement and interviewed vendors, city officials, and others with knowledge of the events in question. The OrO appreciates the cooperation of city officials during the review process. City staff ensured that the oro was provided with copies of all requested materials and city officials were readily available to answer any questions.
1. The City Failed to Accountfor All oftlte Proposals it Received am/ Did Not Follow Proper Procedure with Regards to Non-Responsive Submissions.
The oro noted that, in several official communications, purchasing officials referenced six proposals received in response to the RFP. However, city records indicated seven proposals had been received. rn fact, the Purchasing Agent overseeing the procurement only provided six proposals to the evaluation committee. When the oro Contract Oversight Specialist inquired about the seventh proposal, the Purchasing Agent stated that the seventh proposal had been incomplete, so she " threw it out." When asked to elaborate, she clarified that it was filed away and not noted on the bid tabulation, to the selection committee, nor included in the summary provided to commissioners as part of the agenda item. She later notified the oro that the vendor had not attended the mandatory pre-bid conference, and was therefore ineligible to bid.
During his interview, the Purchasing Director seemed unaware that a seventh proposal had been received. He stated that proper procedure for an incomplete submission would have required providing all of the proposals to the selection committee and having the committee determine whether the proposal was responsive. Any finding of non-
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responsiveness should have been in writing, although the O IG determined that there was no written finding in the case of the seventh proposal. A review of the seventh proposal revealed that it was indeed incomplete. However, such a material deviation from the proper process raises important questions about the agency' s vulnerabi lity to abuse. The OIG is concerned that an employee with improper motives may disregard a proper submission as easi ly as the ineligible submission was disregarded in this instance. The proper procedures, as recommended below, wi ll provide an element of transparency that will protect the integrity of the procurement process.
2. Tlte RFP Colltaille£1 Vague A ward Process Criteri£1
An open, fa ir and transparent procurement process requires that vendors understand the services for which they are bidding and the method by which their offer wi ll be evaluated. As stated in the ABA' s Model Procurement Code, " [flair and open competition is a basic tenet of public procurement. Such competition reduces the opportunity for favoritism and inspires public confidence that contracts are awarded equitably and economically." The CPOP review first evaluated the solicitation in light of the allegations and the issues that arose during the course of the evaluation process . The review of the so licitation revealed that it was unnecessarily vague and did not effectively communicate how the proposals would be awarded. The OIG was particularly concerned about the city's use of zones, which had no relation to the recommended award, as confusing to the proposers. After interviewing several city officials, the OIG concluded that the vagueness was a result of improper planning. In order for a procurement to incorporate transparency, significant planning is required in the design of the award process as outlined in the solicitation. How the city would award multiple contracts for services to over fifty locations did not appear to be contemplated prior to the issuance of the sol icitation. Although the rev iew revealed that there was no deliberate attempt in the RFP to hamper competition, the vagueness of the RFP left the award process vulnerable to abuse and possible protest.
During the course of the review, OIG staff had multiple conversations and a meeting with city officials to discuss the concerns evolving from the procurement review. ln October 20 12, the city elected to reject all proposals from the RFP process and initiated a new Invitation to Bid (!TB) for the landscaping proposal. By its very nature, an lTB- which requires award to the lowest priced responsible and responsive bidder- removes any subjectivity from the award process. Although the city could have proceeded with a revised RFP, their use of the !TB constituted the most effective way to ensure fairness and addressed any concerns with ambiguity of the award process. The !TB also addressed the concerns regarding how multiple contracts would be awarded by incorporating the new mechanism of awarding by zone.
3. Tlte Behavior ofCity Officials at the Pre-Bid Meeti11g Negatively Impacted Competition
Prior to receiving the proposals, the city required all prospective vendors to atter1d a mandatory pre-bid meeting. The meeting consisted of an initial overview and then site
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visits to various locations. The OIG determined that the Purchasing Agent conducted a brief overview of the RFP in the pre-proposal meeting, but did not address the award process. During the pre-proposal meeting the matter was further confused by the Purchasing Agent when she spoke about the zones and stated they were only included for prox imity purposes, but then discussed how a property could be added to a different zone or the zone could be changed. If the contract was not going to be awarded by zone, then there would be no need to add locations to zones or change zones, as any vendor could be awarded locations in multiple, unrelated zones.
The contradictions and ambiguities in the RFP and the pre-bid meeting led multiple vendors to ask questions about how the city planned to award the contracts. Two questions were posed in the pre-proposal meeting regarding the award criteria for the RFP. The Operations Superintendent told the vendors they should disregard the zones and bid by area because o f the reality that they could be awarded any combination of areas. How that would be decided was not a matter that was di scussed. This led another vendor to point out that the city might end up with ten different vendors, to which the Operations Superintendent responded, "yes, but that is not the goal, but we do have the freedom to do so." Clearly the city did not prefer to end up with a large number of vendors, but the city did not state in the RFP that it would shortlist any certain number of vendors to limit the total number. Nonetheless, the comments by the Operations Superintendent suggested that the city had goals not conta ined within the RFP and the freedom to award the contracts in any manne r. Predictabl y, the absence of a transparent process rai sed questions about the propriety of the award .
Of greater concern to the 0 10 , Mr. Perdomo a lleged that he witnessed the Operations Superintendent having a lengthy private conversation with the representative of SFM immediately prior to the pre-bid meeting, a lthough he could not ascertain the subject of the conversation. The O IG contacted other vendors at attendance during the meeting to determine if Mr. Perdomo 's account was independently corroborated. A second vendor (Vendor A) independently stated that he also witnessed city staff having a length y private conversation with a vendor prior to the meeting. It was Vendor A ' s impression that the conversation pertained to the solicitation and he fe lt the impl ication was that the so lic itation was merely a forma lity and that the contract would go to the vendo r speaking to the staff person. Vendor A identified the Operations Superintendent as the staff person he saw talking to a vendor, but he could not identify the other party to the conversati on. According to Vendor A, the entire episode caused him to decl ine the opportunity to submit a proposal. Vendor A indicated that, had the solicitation been an ITB, he would have bid, because, in his opinion, there would be no subjectivity and the intentions of the c ity personnel would not matter. However, because the solicitation was an RFP and the time to put together a proposal is a significant expense, he was unwilling to dedicate resources to what he perceived as a "done-deal."
The O IG is aware that many of the vendors present at the pre-bid meeting were already party to a variety of city contracts. It is possible that the c ity o ffi cia l was merely taking the opportunity to address some unrelated issue with an ex isting vendor. Although the
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city did receive six responses to the RFP, there is evidence that the unnecessary conduct of the city official negative ly affected competition.
4. The Selection Committee was Given Inadequate Guidance
A review of the recorded selection committee meetings also raised several concerns. First, the recordings revealed that there was confusion as to the requirements and effect of the city' s disadvantaged business enterprise (DBE) program. The committee members were not certain what requirements existed to qualify a vendor for the additional points. The OIG found that the form for the program that was included in the RFP did not notify vendors of the documentation which must be submitted to claim DBE status. Although a separate " Definitions" section of the RFP was referenced on the f01m and did contain the program criteria, a reasonable vendor might not expect program criteria to be stated only under definitions and not on the program form. The Purchasing Agent also appeared confused and was not at all certain of what documentation was required by the DBE program. Ultimately, none of the vendors were granted DBE preference although more than one may have been qualified to receive it.
It was also clear that the selection committee was not sure what they were selecting. When they were di scuss ing the fitness of the vendors to perform the necessary work, at least one member raised concern about the lowest priced proposal, Garden of Beauty. The member had previous knowledge o f the company and stated on the record that he would be concerned about the company's ability to perform on a large sca le, parti cularly if Garden of Beauty were to be awarded the whole project. After filling in the numbers on the score sheets, at least one evaluator asked how it was that the contract would be awarded. The answer provided by the Operations Superintendent was that the method of award was yet to be determined. Clearly, well into the procurement process, even c ity staff remained unsure how they were go ing to decide to award the contracts and the decision was certainl y not to be made by the evaluation committee.
A fi nal concern with the guidance provided by the Purchasing Depat1ment was made evident by events a fter the evaluation process had concluded. Weeks after the se lection committee had submitted its rat1kings, and after multiple options for recommending award were considered by city o fficials, the Public Works department expressed a desire to disqualify one firm- which tied fo r third in the rankings- because o f performance issues in ex isting ci ty contracts. The request was denied by the Purchasing Department, which raised the question of how a presently under-performing vendor could attain a position on the shortlist. The OIG asked the Purchasing Agent if there were any contro ls in place to notify purchasing or the selection committee of vendors with performance issues on ex isting city contracts. The response was that user departments, such as Public Works, always have a representati ve on the committee and Purchasing relies on those representatives to bring any issues to the attention of the committee. However, the Operations Superintendent, Public Works' representative, gave this under-performing vendor the highest scores in every category. When asked, he indicated that he was unde r the belief that he was not supposed to bring past experience with the vendors to the evaluati on committee ' s attention, but to confine his evaluation solely to the submiss ion.
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Whatever the proper role of the user depat1ment's representative should be, it is clear that there was a distinct misunderstanding between the Purchasing Agent and the committee members regarding what information could properly be considered in their evaluation of the proposers. The Superintendent stated that he had never received any general guidance of that nature when serving on selection committees. The lack of communication resulted in a problematic vendor receiving continued recommendation for ci ty business. In our recommendations, the OIG proposes a formal mechanism for tracking vendor performance that will provide selection committees with documentation of under-performance that can be reviewed by all members.
5. The City Permitted One Vendor to Withdraw its Pricing Offer at the City's Expense
On June II , 2012, after the selection committee had ranked the proposers, the Purchasing Agent sent an email to a representative of Garden of Beauty requesting confirmation that it could perform the services listed in the RFP at the low prices quoted. Garden of Beauty responded that it could not perform the services for one of the locations, which resulted in the Purchasing Agent's decision to award the item to the next lowest proposer. By reneging on its price offer for that location, Garden of Beauty incurred a cost to the city of an additional $29,7 14. This allowed Garden of Beauty to change its pricing, li ke ly increasing the profitability of the contract, after the ranking process had concluded without any penalty to its prospective awards. The Director of Purchasing indicated that he was never consulted about the change. He went on to state that vendors are not normally permitted to withdraw pricing without any adverse effect.
6. Tlte Public Works Department was Initially Permitted au Extensive Amount of Latitude in Providing a Recommended Contract A ward
When the OIG received allegations that an employee may have attempted to steer a city contract to a specific vendor, OIG staff reviewed the process to determine the level of control the specific individual had over the contract award recommendation. In the present case, the OIG found that the Public Works department was asked to formulate initial recommendations for award, despite the fact that the city has a centralized procurement system. The OIG found that the Purchasing Director made all the final decisions relating to the official recommendation for award as presented to the city commission. However, emai ls confirmed that the Operations Superintendent was involved in departmental di scussions about how the contracts should be awarded and did have significant opportunity to affect an award process that was already vulnerable due to the lack of specificity in the RFP.
Even after the se lection committee concluded its work, the city remained unsure how the contracts would be awarded. On May 16, 20 12 the Purchasing Agent sent an emai l with the attached list of the ranked firms to the Director of Public Works stating that the selection committee had evaluated all six proposals and Purchasing needed to know how to move forward with the award. The Director responded that the Assistant to the Public Works Director would assist in this.
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The OIG established that the Public Works Department prepared the initial recommendations for award. The Department recommended multiple possible approaches, each of which awarded a significant portion o f the contract to SFM, the highest ranked bidder. One o f the approaches awarded to two vendors, the other to three. The emai ls also indicated that the Operations Superintendent was involved in the process of creating the recommendations. The onl y party notably missing from any discussion of how to award the contracts was the selection committee.
The primary concern with determining- after the fact- how the contracts will be di stributed is that the distribution can, in the wrong hands, be based on improper motivations. Including individuals from the client agency is a common practice and acceptable; however, the lack of transparency in thi s flawed procurement process left it ripe for abuse.
The O IG notes that none of the recommendations from the Public Works, nor the methodologies used to deve lop those recommendations, were accepted by the Purchasing Director and city administration. After receiving multiple recommendations from Public Works, the Purchasing Di rector recommended a significantly more transparent methodology which recommended award to the lowest bidder, of the four highest ranked bidders, by location. Ultimately, despite multiple flaws in the so licitation and evaluation process, the C ity's admini stration demonstrated every intention o f achieving the fairest result possible under the circumstances.
The City's lntemallnvestigation ofthe Allegations fmtccumte/y Assessed the Public Official's Scoring Variation
After the city had completed its internal investigation o f the procurement process, the Purchasing Director issued a memo to the C ity Manager recommending dissemination of the memo to the city commissioners. The memo outlined the department 's investigati ve process and found that statistical tests validated the results of the selection committee's rankings as fa ir. Specifica lly, the Director stated that when the scores of the staff member in question we re removed, there was no change in the overall rankings of the firms. Thi s finding was important because, if the Director's fi ndings were accurate, there would be no need to fwther investigate the possibility of a biased rati ng.
However, an O IG analysis of the ran kings reveals that the Director' s contention is not accurate . In fact, when the scores o f the Operations Superintendent were re moved from the ca lculations, Mr. Perdomo ' s firm rose from fift h place to third place. Aside from just mere ly demonstrating the effect of the Operations Superintendent 's rankings, the change is significant because the recommendation for award ultimately recommended award to the lowest bid per location of the top four ranked firms. The Purchasing Director stated that the ci ty's standard was to award to the top three firms, but in the instant case, two firms tied for third place, thus the recommendation was an award to four firms. Applying thi s same methodology, if the rankings were revised to exclude the Operations Superintendent ' s rankings, the city would have potentially saved $45,623.78 a year in a revised recommended award to the top three firms, including the complainant, a savings of $ 228, 11 8.90 over the life of the contract. While the C ity
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Allegations oftile Public Official's Misconduct Were Not Substantiated
The OIG also investigated allegations that the Operations Superintendent had a previous professional relationship with the representati ve of SFM. Mr. Perdomo alleged that at one po int in time, the Operations Superintendent had been employed by a company belonging to the family of SFM 's representative. He further alleged that the two were close friends and that the Operations Superintendent had acted to steer the contract to SFM and away from Florida Turf. In fact, the Operations Superintendent did score Florida Turf considerably lower than all other members of the selection committee and scored SFM higher than all o ther members of the selection committee. During his interview with the OIG, the Operations Superintendent could not explain the discrepancy between the evaluation scores he gave to SFM and to Florida Turf. The only specific criteria he cited as something he highly valued in a proposal was the availability of horticulturalist and other specialized landscaping certifications. But a comparison o f the two companies revealed they had the same certifications in these fi elds.
The OIG was concerned about a Jack of clarity with regards to the Operati ons Superintendent ' s role in the fo rmulation of Public Works' recommendations for award. The Operations Superintendent ma intai ned that he played no ro le beyond his position on the selection committee, but the emails from the department indicated that he was involved in discussions about the award recommendations. Also of signi ficant concern were the corroborated allegations of private conversations with vendors prior to the pre-bid meeting, discussed above.
Nonetheless, the O IG could not substantiate the prev ious profess ional relationship with the vendor. The Operations Superintendent had indeed worked for a company that was purchased by the family ofSFM' s representative. However, the fo rmer owner ofthe company confirmed that the Operations Superintendent had left the company years be fore it was sold. A review o f phone records fai led to revea l any personal or improper communications between the Operations Superintendent and the representative. In fact, the Operations Superintendent maintained that he did not know the representati ve prior to SFM's first engagement with the city and did not know him in any personal capacity. In the absence of any persona l connection between the two, and in light of the fact that the other members of the selection committee a lso scored SFM very highl y, the a llegations specifically pertaining to the Operations Superintendent were deemed unsubstanti ated.
OIG Conclusions am/ Recommendations
The O IG notes that an improved process, including correction of the concerns identi fied throughout this memorandum, would not only prevent the type of abuse all eged in thi s matter, but a lso faci litate the investi gations of these matters so that proper procurements are not dera iled
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by unsubstantiated allegations. ln trying to create a process that is too flexible, a local government can undermine the principles of public procurement by unduly diminishing transparency. The result is often a process where discretion need not be justified, rendering the selection vulnerable to favoritism and other forms of abuse. When a process lacks transparency it is also more likely to draw suspicion and protest, as was the case in the instant process. This RFP contained vague award criteria which required the city to determine a method of award after the prices and proposers had been revealed. The city ' s preference to shortlist the top four firms and then award by line items to the lowest responsive, responsible vendor were not included in the advertised bid. Even the selection committee members expressed confusion about how their rankings would be used.
The OlO stresses that it does not take issue with the criteria ultimately applied by the city. However, while there is no evidence that the city engaged in favoritism in this procurement, a faulty evaluation process, such as the one exhibited in this case, is ripe for abuse. ln light of those flaws, the city's failure to contact our office when it was alerted to possible significant procurement improprieties did little to instill confidence. The flaws in the Purchasing Department' s investigative findings only raised additional red flags. The OlO makes the following recommendations to strengthen the city 's procurement practices and improve confidence in the city' s integrity:
• RFPs should set forth the relative importance of all factors , in addition to price, that will be considered in awarding criteria for the contract. To achieve full transparency, significant planning must go into the design of each award process. Many are typical award processes to the single best proposer. However, often, as in this case, a unique process must be designed at the time of solicitation to meet the city ' s needs and prevent the perception of favoritism. For example, in this case the RFP should have indicated that the city would be short-listing the top tlu·ee ranked firms and then awarding each location to the lowest priced firm.
• The OIO recommends that Purchasing Agents undergo specific training of any DBE processes or local preferences. It is the duty of these agents to guide the selection committee members through the appropriate scoring procedures, so they should be well versed on the requirements of these programs. The 010 is aware that the DBE program has undergone recent changes. Nonetheless, our recommendation applies even to a simplified DBE process.
• The OrO recommends adoption of a written procedure which requires written documentation supporting any finding that a response to a solicitation is ineligible or incomplete. The procedures should explicitly indicate which parties are authorized to make such a finding.
• The oro also recommends additional training of purchasing staff with regards to proper documentation of all responses to solicitations. The 0£0 agrees with the stated policy of the city that all responses be turned over to the selection committee for a formal determination of completeness, but the policy should also require documentation of any finding of ineligibility. Staff should undergo training on the proper procedure for addressing incomplete or ineligible solicitations.
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• The city should implement a vendor performance evaluation process which documents a vendor's performance on city contracts. Any such evaluations could be provided to the selection committee along with the requested references. This would provide a formal method for consideration of a vendor's past performance with the city in determining their fitness for future contract and help the city avoid ineffective vendors.
The OIO has provided the city with a preliminary draft of this memorandum and discussed these findings and recommendations with city officials. As mentioned above, the city has already commenced proactively addressing many of these concerns. The city has also provided a response further explaining its position and generally accepting the recommendations of the oro.
We will continue to make available our Contract and Procurement Oversight services to the city as it addresses the issues raised in this review, and will continue to work with the city to reduce potential vulnerabilities in the procurement process.
cc: Honorable Lori Cohen Moseley, Mayor, and Members, City Commission of the City of Miramar
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OIG 12-019
APPENDIX A
Mayor
2300 Civic Center Place Miramar, Florida 33025
Phone (954) 602-3115 Fax (954) 602-3547
January 31 , 2013
John W. Scott, Inspector General Broward Office of the Inspector General One North University Drive, Suite 111 Plantation, FL 33324
RE: OIG Closing Memorandum of RFP No. 12-11-14
Dear Mr. Scott:
The City of Miramar has reviewed the Office of Inspector General ("OIG") Closing Memorandum of Request for Proposal ("RFP") No. 12-11-14 and is satisfied that the investigation conducted has revealed that the allegations of misconduct were not substantiated. Additionally, the City has assessed the recommendations made by the OIG staff designed to improve the procurement process used by the City to ensure that all vendors are given a fair and equal opportunity when competing for business. While the City understands, accepts and will seek to implement such recommendations, it respectfully requests that the following clarification points be included as part of the final document.
• As it relates to the OIG's findings of accounting for proposals received: it is important to clarify for the record that the City Clerk received seven proposals, as documented on the handwritten RFP "Opening Sheet". The seventh proposal was not presented to the evaluation committee because the vendor did not attend the mandatory pre-proposal conference. This caused the vendor to immediately be deemed non-responsive and ineligible for further consideration for award.
Considering the OIG's recommendations on this matter, in the future, all responses, even those that are deemed ineligible on their face or are a 'no bid', will be provided to the evaluation committee. Staff will provide information regarding the responsiveness of all proposers and the action of the committee pertaining to responsiveness will be recorded in writing.
• With reference to the OIG's commentary regarding the pre proposal meeting: the City does not believe that the conversation between its staff and one of the potential proposers, who is also a current City vendor, dissuaded competition. In fact, the vendor who commented on the
CITY OF MIRAMAR An Equal Opportunity Employer conversation indicated that it still would have submitted a bid if
the process had been an Invitation for Bid ("IFB") rather than an RFP, but that vendor did not submit a response to the subsequent IFB. Thus, the vendor cho_se, for unknown reasons, not to participate in the IFB process. It is thus speculative to assume that there was any effect on the solicitation process by virtue of the conversation at the pre-bid meeting.
In accordance with the OIG's recommendations, the Procurement Department will continue to train and advise City staff not to converse with vendors on any matter before and after any public meetings in the evaluation process to allay the appearance of favoritism.
• In reference to the OIG's discussion on allowing vendor to withdraw its pricing: the City desires to only enter into contracts with vendors that can successfully perform. Garden of Beauty submitted a price for one of the locations in the RFP scope of work that was significantly lower than that of the other proposers. In this case, the City has the obligation to determine if the proposer is able to accomplish the proposed service with the proposed methodology, resources and price in a manner satisfactory to the City. City Procurement Policy 12.3.1 Section 2.803 authorizes the Chief Procurement Officer to request from the proposer a substantiation of offered prices based on adequate price competition. Garden of Beauty was unable to do so. If the City had not rejected the proposals and canceled the RFP, this would have increased the total price to the City for these services. However, it would have helped to ensure that the services would be performed as required under the contract, as opposed to awarding the lot to a vendor that could not perform at that location.
The OIG's observation is. relevant and when issuing RFPs the City will describe in detail how these situations will be handled.
The City makes every effort to ensure that the procurement process is handled with the highest level of integrity for any person, group, or business intere~ted in conducting business with the City. The City will strive to ensure that all specifications and scopes of work will be as detailed and descriptive as possible on future solicitations, with a clear delineation of the award process. As the OIG has recognized, the City has already commenced proactively addressing many ·of the concerns by rejecting the original RFP, issuing a new IFB, and awarding contracts as a result.
CITY OF MIRAMAR An Equal Opportunity Employer
The City appreciates the OIG's recommendations to improve its processes and implement additional best practice measures. Should you have any questions, please feel free to contact Procurement Director Randy Cross at (954) 602-3054.
c. The Honorable Mayor and City Commission Wazir A. Ishmael, Ph.D., Deputy City Manager Donald J. Waldron, AICP, Assistant City Manager Vernon E. Hargray, Assistant City Manager Tom Good, Public Works Director Randy Cross, Procurement Director Jaime A. Cole, City Attorney
OIG CPOP Miramar Memorandum
OIG 12-019 Appendix Sheet
To: Robert Payton, City Manager, City o./Jamar
From: John W. Scott, Inspector General {_ I~. Date: February 5, 2013
Subject: OIG Closing Memorandum Re: Allegations ofFavoritism in the City ofMiramar's Procurement Process, Request for Proposal No. 12-11-14for Landscape Services, Ref. OJG No. 12-019
The purpose of this memorandum is to inform you that the Broward Office of the Inspector General (OIG) has completed its investigation and procurement review of the above-captioned landscape services solicitation. The OIG received allegations that a Public Works official with the City of Miramar engaged in misconduct by manipulating the procurement process to favor a specific vendor. The OIG conducted a comprehensive review of the procurement process and an investigation of the specific allegations of misconduct. The OIG investigation of the city employee' s conduct did not substantiate the allegations of misconduct.
However, the OIG procurement review identified a ntnnber ofconcerns with the solicitation, evaluation ami award processes. In addition, the city ' s internal investigation of the alleged procurement improprieties resulted in inaccurate information being provided to the city manager and commission. The OlG informed the Chief Procurement Officer (Purchasing Director) and other city officials of its concerns, and the city has proactively addressed some of those concerns pursuant to a new procurement soli citation. This memorandum documents the OIG's investigation , procurement review observations and contains additional recommendations to improve the internal processes to make the city's procurements less vulnerable to possible abuse.
0/G's Review ofthe Procurement Process ldentijiell Multiple Concerns
On April 2, 20 12, the city advertised RFP No. 12-1 1-14 for landscape maintenance services for 59 parcels of city property, referred to as " locations" in the RFP, including roadways and rights of-way among other municipal properties. The RFP indicated the term of the contract would be for a period of two years with an option for three one-year renewals, for a total possible contract term of fi ve years. The annual estimated value of the contract was $540,000 with an approximate total value of $2.7 million, including the renewals. The contract would be administered by Public Works, specifically the Operations Superintendent for Public Works, who served on the selection committee.
On April II , 2012, a mandatory pre-proposal meeting and site visits to 40 of the locations listed in the RFP were conducted. Thirteen vendors attended the pre-proposal meeting, but only seven vendors submitted proposals. Se lection committee meetings were held on May 3, 2012 and May
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10, 2012, and the selection committee ranked six ofthe firms that responded to the RFP. SFM Services (SFM) was ranked first and Garden of Beauty, rnc., which bid the lowest overall price, was ranked second. The rankings were then used by Public Works to create multiple award recommendations. Ultimately, the Purchasing Director and City Manager elected not to adopt either of the recommendations from Public Works, but, instead, recommended award of each location to the lowest bidder of the four top-ranked vendors. On July 3, 2012, the City Manager placed an item on the commission agenda recommending award to the four top-ranked vendors. The item was pulled from the agenda when Mr. Henry Perdomo, the owner of Florida Turf, ranked fifth in the evaluation process, informed the city of his intent to protest the award.
Mr. Perdomo did not file a protest, but did make serious allegations of favoritism and other improprieties in the evaluation process. Specifically, he alleged that the Operations Superintendent had a connection to the firm ranked in first place, SFM, and that the Operations Superintendent steered the evaluation against Florida Turf and in favor of SFM. rn response to Mr. Perdomo's allegations, the city initiated an internal investigation wherein the Purchasing Department reviewed the procurement process. On August 6, 2012, the Procurement Director issued a memo to the City Manager indicating that his investigation found that there were no improprieties in the process conducted by his staff.
rn August 2012, as part of its Contract and Procurement Oversight Program (CPOP), the OrO initiated a review of the procurement process, at which time the city elected to postpone award of the contracts. The oro review noted multiple concerns, including deficiencies in the solicitation document and the subsequent evaluation process. As part of its review, the OrO analyzed all documentation related to the procurement and interviewed vendors, city officials, and others with knowledge of the events in question. The OrO appreciates the cooperation of city officials during the review process. City staff ensured that the oro was provided with copies of all requested materials and city officials were readily available to answer any questions.
1. The City Failed to Accountfor All oftlte Proposals it Received am/ Did Not Follow Proper Procedure with Regards to Non-Responsive Submissions.
The oro noted that, in several official communications, purchasing officials referenced six proposals received in response to the RFP. However, city records indicated seven proposals had been received. rn fact, the Purchasing Agent overseeing the procurement only provided six proposals to the evaluation committee. When the oro Contract Oversight Specialist inquired about the seventh proposal, the Purchasing Agent stated that the seventh proposal had been incomplete, so she " threw it out." When asked to elaborate, she clarified that it was filed away and not noted on the bid tabulation, to the selection committee, nor included in the summary provided to commissioners as part of the agenda item. She later notified the oro that the vendor had not attended the mandatory pre-bid conference, and was therefore ineligible to bid.
During his interview, the Purchasing Director seemed unaware that a seventh proposal had been received. He stated that proper procedure for an incomplete submission would have required providing all of the proposals to the selection committee and having the committee determine whether the proposal was responsive. Any finding of non-
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responsiveness should have been in writing, although the O IG determined that there was no written finding in the case of the seventh proposal. A review of the seventh proposal revealed that it was indeed incomplete. However, such a material deviation from the proper process raises important questions about the agency' s vulnerabi lity to abuse. The OIG is concerned that an employee with improper motives may disregard a proper submission as easi ly as the ineligible submission was disregarded in this instance. The proper procedures, as recommended below, wi ll provide an element of transparency that will protect the integrity of the procurement process.
2. Tlte RFP Colltaille£1 Vague A ward Process Criteri£1
An open, fa ir and transparent procurement process requires that vendors understand the services for which they are bidding and the method by which their offer wi ll be evaluated. As stated in the ABA' s Model Procurement Code, " [flair and open competition is a basic tenet of public procurement. Such competition reduces the opportunity for favoritism and inspires public confidence that contracts are awarded equitably and economically." The CPOP review first evaluated the solicitation in light of the allegations and the issues that arose during the course of the evaluation process . The review of the so licitation revealed that it was unnecessarily vague and did not effectively communicate how the proposals would be awarded. The OIG was particularly concerned about the city's use of zones, which had no relation to the recommended award, as confusing to the proposers. After interviewing several city officials, the OIG concluded that the vagueness was a result of improper planning. In order for a procurement to incorporate transparency, significant planning is required in the design of the award process as outlined in the solicitation. How the city would award multiple contracts for services to over fifty locations did not appear to be contemplated prior to the issuance of the sol icitation. Although the rev iew revealed that there was no deliberate attempt in the RFP to hamper competition, the vagueness of the RFP left the award process vulnerable to abuse and possible protest.
During the course of the review, OIG staff had multiple conversations and a meeting with city officials to discuss the concerns evolving from the procurement review. ln October 20 12, the city elected to reject all proposals from the RFP process and initiated a new Invitation to Bid (!TB) for the landscaping proposal. By its very nature, an lTB- which requires award to the lowest priced responsible and responsive bidder- removes any subjectivity from the award process. Although the city could have proceeded with a revised RFP, their use of the !TB constituted the most effective way to ensure fairness and addressed any concerns with ambiguity of the award process. The !TB also addressed the concerns regarding how multiple contracts would be awarded by incorporating the new mechanism of awarding by zone.
3. Tlte Behavior ofCity Officials at the Pre-Bid Meeti11g Negatively Impacted Competition
Prior to receiving the proposals, the city required all prospective vendors to atter1d a mandatory pre-bid meeting. The meeting consisted of an initial overview and then site
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visits to various locations. The OIG determined that the Purchasing Agent conducted a brief overview of the RFP in the pre-proposal meeting, but did not address the award process. During the pre-proposal meeting the matter was further confused by the Purchasing Agent when she spoke about the zones and stated they were only included for prox imity purposes, but then discussed how a property could be added to a different zone or the zone could be changed. If the contract was not going to be awarded by zone, then there would be no need to add locations to zones or change zones, as any vendor could be awarded locations in multiple, unrelated zones.
The contradictions and ambiguities in the RFP and the pre-bid meeting led multiple vendors to ask questions about how the city planned to award the contracts. Two questions were posed in the pre-proposal meeting regarding the award criteria for the RFP. The Operations Superintendent told the vendors they should disregard the zones and bid by area because o f the reality that they could be awarded any combination of areas. How that would be decided was not a matter that was di scussed. This led another vendor to point out that the city might end up with ten different vendors, to which the Operations Superintendent responded, "yes, but that is not the goal, but we do have the freedom to do so." Clearly the city did not prefer to end up with a large number of vendors, but the city did not state in the RFP that it would shortlist any certain number of vendors to limit the total number. Nonetheless, the comments by the Operations Superintendent suggested that the city had goals not conta ined within the RFP and the freedom to award the contracts in any manne r. Predictabl y, the absence of a transparent process rai sed questions about the propriety of the award .
Of greater concern to the 0 10 , Mr. Perdomo a lleged that he witnessed the Operations Superintendent having a lengthy private conversation with the representative of SFM immediately prior to the pre-bid meeting, a lthough he could not ascertain the subject of the conversation. The O IG contacted other vendors at attendance during the meeting to determine if Mr. Perdomo 's account was independently corroborated. A second vendor (Vendor A) independently stated that he also witnessed city staff having a length y private conversation with a vendor prior to the meeting. It was Vendor A ' s impression that the conversation pertained to the solicitation and he fe lt the impl ication was that the so lic itation was merely a forma lity and that the contract would go to the vendo r speaking to the staff person. Vendor A identified the Operations Superintendent as the staff person he saw talking to a vendor, but he could not identify the other party to the conversati on. According to Vendor A, the entire episode caused him to decl ine the opportunity to submit a proposal. Vendor A indicated that, had the solicitation been an ITB, he would have bid, because, in his opinion, there would be no subjectivity and the intentions of the c ity personnel would not matter. However, because the solicitation was an RFP and the time to put together a proposal is a significant expense, he was unwilling to dedicate resources to what he perceived as a "done-deal."
The O IG is aware that many of the vendors present at the pre-bid meeting were already party to a variety of city contracts. It is possible that the c ity o ffi cia l was merely taking the opportunity to address some unrelated issue with an ex isting vendor. Although the
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city did receive six responses to the RFP, there is evidence that the unnecessary conduct of the city official negative ly affected competition.
4. The Selection Committee was Given Inadequate Guidance
A review of the recorded selection committee meetings also raised several concerns. First, the recordings revealed that there was confusion as to the requirements and effect of the city' s disadvantaged business enterprise (DBE) program. The committee members were not certain what requirements existed to qualify a vendor for the additional points. The OIG found that the form for the program that was included in the RFP did not notify vendors of the documentation which must be submitted to claim DBE status. Although a separate " Definitions" section of the RFP was referenced on the f01m and did contain the program criteria, a reasonable vendor might not expect program criteria to be stated only under definitions and not on the program form. The Purchasing Agent also appeared confused and was not at all certain of what documentation was required by the DBE program. Ultimately, none of the vendors were granted DBE preference although more than one may have been qualified to receive it.
It was also clear that the selection committee was not sure what they were selecting. When they were di scuss ing the fitness of the vendors to perform the necessary work, at least one member raised concern about the lowest priced proposal, Garden of Beauty. The member had previous knowledge o f the company and stated on the record that he would be concerned about the company's ability to perform on a large sca le, parti cularly if Garden of Beauty were to be awarded the whole project. After filling in the numbers on the score sheets, at least one evaluator asked how it was that the contract would be awarded. The answer provided by the Operations Superintendent was that the method of award was yet to be determined. Clearly, well into the procurement process, even c ity staff remained unsure how they were go ing to decide to award the contracts and the decision was certainl y not to be made by the evaluation committee.
A fi nal concern with the guidance provided by the Purchasing Depat1ment was made evident by events a fter the evaluation process had concluded. Weeks after the se lection committee had submitted its rat1kings, and after multiple options for recommending award were considered by city o fficials, the Public Works department expressed a desire to disqualify one firm- which tied fo r third in the rankings- because o f performance issues in ex isting ci ty contracts. The request was denied by the Purchasing Department, which raised the question of how a presently under-performing vendor could attain a position on the shortlist. The OIG asked the Purchasing Agent if there were any contro ls in place to notify purchasing or the selection committee of vendors with performance issues on ex isting city contracts. The response was that user departments, such as Public Works, always have a representati ve on the committee and Purchasing relies on those representatives to bring any issues to the attention of the committee. However, the Operations Superintendent, Public Works' representative, gave this under-performing vendor the highest scores in every category. When asked, he indicated that he was unde r the belief that he was not supposed to bring past experience with the vendors to the evaluati on committee ' s attention, but to confine his evaluation solely to the submiss ion.
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Whatever the proper role of the user depat1ment's representative should be, it is clear that there was a distinct misunderstanding between the Purchasing Agent and the committee members regarding what information could properly be considered in their evaluation of the proposers. The Superintendent stated that he had never received any general guidance of that nature when serving on selection committees. The lack of communication resulted in a problematic vendor receiving continued recommendation for ci ty business. In our recommendations, the OIG proposes a formal mechanism for tracking vendor performance that will provide selection committees with documentation of under-performance that can be reviewed by all members.
5. The City Permitted One Vendor to Withdraw its Pricing Offer at the City's Expense
On June II , 2012, after the selection committee had ranked the proposers, the Purchasing Agent sent an email to a representative of Garden of Beauty requesting confirmation that it could perform the services listed in the RFP at the low prices quoted. Garden of Beauty responded that it could not perform the services for one of the locations, which resulted in the Purchasing Agent's decision to award the item to the next lowest proposer. By reneging on its price offer for that location, Garden of Beauty incurred a cost to the city of an additional $29,7 14. This allowed Garden of Beauty to change its pricing, li ke ly increasing the profitability of the contract, after the ranking process had concluded without any penalty to its prospective awards. The Director of Purchasing indicated that he was never consulted about the change. He went on to state that vendors are not normally permitted to withdraw pricing without any adverse effect.
6. Tlte Public Works Department was Initially Permitted au Extensive Amount of Latitude in Providing a Recommended Contract A ward
When the OIG received allegations that an employee may have attempted to steer a city contract to a specific vendor, OIG staff reviewed the process to determine the level of control the specific individual had over the contract award recommendation. In the present case, the OIG found that the Public Works department was asked to formulate initial recommendations for award, despite the fact that the city has a centralized procurement system. The OIG found that the Purchasing Director made all the final decisions relating to the official recommendation for award as presented to the city commission. However, emai ls confirmed that the Operations Superintendent was involved in departmental di scussions about how the contracts should be awarded and did have significant opportunity to affect an award process that was already vulnerable due to the lack of specificity in the RFP.
Even after the se lection committee concluded its work, the city remained unsure how the contracts would be awarded. On May 16, 20 12 the Purchasing Agent sent an emai l with the attached list of the ranked firms to the Director of Public Works stating that the selection committee had evaluated all six proposals and Purchasing needed to know how to move forward with the award. The Director responded that the Assistant to the Public Works Director would assist in this.
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The OIG established that the Public Works Department prepared the initial recommendations for award. The Department recommended multiple possible approaches, each of which awarded a significant portion o f the contract to SFM, the highest ranked bidder. One o f the approaches awarded to two vendors, the other to three. The emai ls also indicated that the Operations Superintendent was involved in the process of creating the recommendations. The onl y party notably missing from any discussion of how to award the contracts was the selection committee.
The primary concern with determining- after the fact- how the contracts will be di stributed is that the distribution can, in the wrong hands, be based on improper motivations. Including individuals from the client agency is a common practice and acceptable; however, the lack of transparency in thi s flawed procurement process left it ripe for abuse.
The O IG notes that none of the recommendations from the Public Works, nor the methodologies used to deve lop those recommendations, were accepted by the Purchasing Director and city administration. After receiving multiple recommendations from Public Works, the Purchasing Di rector recommended a significantly more transparent methodology which recommended award to the lowest bidder, of the four highest ranked bidders, by location. Ultimately, despite multiple flaws in the so licitation and evaluation process, the C ity's admini stration demonstrated every intention o f achieving the fairest result possible under the circumstances.
The City's lntemallnvestigation ofthe Allegations fmtccumte/y Assessed the Public Official's Scoring Variation
After the city had completed its internal investigation o f the procurement process, the Purchasing Director issued a memo to the C ity Manager recommending dissemination of the memo to the city commissioners. The memo outlined the department 's investigati ve process and found that statistical tests validated the results of the selection committee's rankings as fa ir. Specifica lly, the Director stated that when the scores of the staff member in question we re removed, there was no change in the overall rankings of the firms. Thi s finding was important because, if the Director's fi ndings were accurate, there would be no need to fwther investigate the possibility of a biased rati ng.
However, an O IG analysis of the ran kings reveals that the Director' s contention is not accurate . In fact, when the scores o f the Operations Superintendent were re moved from the ca lculations, Mr. Perdomo ' s firm rose from fift h place to third place. Aside from just mere ly demonstrating the effect of the Operations Superintendent 's rankings, the change is significant because the recommendation for award ultimately recommended award to the lowest bid per location of the top four ranked firms. The Purchasing Director stated that the ci ty's standard was to award to the top three firms, but in the instant case, two firms tied for third place, thus the recommendation was an award to four firms. Applying thi s same methodology, if the rankings were revised to exclude the Operations Superintendent ' s rankings, the city would have potentially saved $45,623.78 a year in a revised recommended award to the top three firms, including the complainant, a savings of $ 228, 11 8.90 over the life of the contract. While the C ity
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Allegations oftile Public Official's Misconduct Were Not Substantiated
The OIG also investigated allegations that the Operations Superintendent had a previous professional relationship with the representati ve of SFM. Mr. Perdomo alleged that at one po int in time, the Operations Superintendent had been employed by a company belonging to the family of SFM 's representative. He further alleged that the two were close friends and that the Operations Superintendent had acted to steer the contract to SFM and away from Florida Turf. In fact, the Operations Superintendent did score Florida Turf considerably lower than all other members of the selection committee and scored SFM higher than all o ther members of the selection committee. During his interview with the OIG, the Operations Superintendent could not explain the discrepancy between the evaluation scores he gave to SFM and to Florida Turf. The only specific criteria he cited as something he highly valued in a proposal was the availability of horticulturalist and other specialized landscaping certifications. But a comparison o f the two companies revealed they had the same certifications in these fi elds.
The OIG was concerned about a Jack of clarity with regards to the Operati ons Superintendent ' s role in the fo rmulation of Public Works' recommendations for award. The Operations Superintendent ma intai ned that he played no ro le beyond his position on the selection committee, but the emails from the department indicated that he was involved in discussions about the award recommendations. Also of signi ficant concern were the corroborated allegations of private conversations with vendors prior to the pre-bid meeting, discussed above.
Nonetheless, the O IG could not substantiate the prev ious profess ional relationship with the vendor. The Operations Superintendent had indeed worked for a company that was purchased by the family ofSFM' s representative. However, the fo rmer owner ofthe company confirmed that the Operations Superintendent had left the company years be fore it was sold. A review o f phone records fai led to revea l any personal or improper communications between the Operations Superintendent and the representative. In fact, the Operations Superintendent maintained that he did not know the representati ve prior to SFM's first engagement with the city and did not know him in any personal capacity. In the absence of any persona l connection between the two, and in light of the fact that the other members of the selection committee a lso scored SFM very highl y, the a llegations specifically pertaining to the Operations Superintendent were deemed unsubstanti ated.
OIG Conclusions am/ Recommendations
The O IG notes that an improved process, including correction of the concerns identi fied throughout this memorandum, would not only prevent the type of abuse all eged in thi s matter, but a lso faci litate the investi gations of these matters so that proper procurements are not dera iled
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by unsubstantiated allegations. ln trying to create a process that is too flexible, a local government can undermine the principles of public procurement by unduly diminishing transparency. The result is often a process where discretion need not be justified, rendering the selection vulnerable to favoritism and other forms of abuse. When a process lacks transparency it is also more likely to draw suspicion and protest, as was the case in the instant process. This RFP contained vague award criteria which required the city to determine a method of award after the prices and proposers had been revealed. The city ' s preference to shortlist the top four firms and then award by line items to the lowest responsive, responsible vendor were not included in the advertised bid. Even the selection committee members expressed confusion about how their rankings would be used.
The OlO stresses that it does not take issue with the criteria ultimately applied by the city. However, while there is no evidence that the city engaged in favoritism in this procurement, a faulty evaluation process, such as the one exhibited in this case, is ripe for abuse. ln light of those flaws, the city's failure to contact our office when it was alerted to possible significant procurement improprieties did little to instill confidence. The flaws in the Purchasing Department' s investigative findings only raised additional red flags. The OlO makes the following recommendations to strengthen the city 's procurement practices and improve confidence in the city' s integrity:
• RFPs should set forth the relative importance of all factors , in addition to price, that will be considered in awarding criteria for the contract. To achieve full transparency, significant planning must go into the design of each award process. Many are typical award processes to the single best proposer. However, often, as in this case, a unique process must be designed at the time of solicitation to meet the city ' s needs and prevent the perception of favoritism. For example, in this case the RFP should have indicated that the city would be short-listing the top tlu·ee ranked firms and then awarding each location to the lowest priced firm.
• The OIO recommends that Purchasing Agents undergo specific training of any DBE processes or local preferences. It is the duty of these agents to guide the selection committee members through the appropriate scoring procedures, so they should be well versed on the requirements of these programs. The 010 is aware that the DBE program has undergone recent changes. Nonetheless, our recommendation applies even to a simplified DBE process.
• The OrO recommends adoption of a written procedure which requires written documentation supporting any finding that a response to a solicitation is ineligible or incomplete. The procedures should explicitly indicate which parties are authorized to make such a finding.
• The oro also recommends additional training of purchasing staff with regards to proper documentation of all responses to solicitations. The 0£0 agrees with the stated policy of the city that all responses be turned over to the selection committee for a formal determination of completeness, but the policy should also require documentation of any finding of ineligibility. Staff should undergo training on the proper procedure for addressing incomplete or ineligible solicitations.
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• The city should implement a vendor performance evaluation process which documents a vendor's performance on city contracts. Any such evaluations could be provided to the selection committee along with the requested references. This would provide a formal method for consideration of a vendor's past performance with the city in determining their fitness for future contract and help the city avoid ineffective vendors.
The OIO has provided the city with a preliminary draft of this memorandum and discussed these findings and recommendations with city officials. As mentioned above, the city has already commenced proactively addressing many of these concerns. The city has also provided a response further explaining its position and generally accepting the recommendations of the oro.
We will continue to make available our Contract and Procurement Oversight services to the city as it addresses the issues raised in this review, and will continue to work with the city to reduce potential vulnerabilities in the procurement process.
cc: Honorable Lori Cohen Moseley, Mayor, and Members, City Commission of the City of Miramar
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OIG 12-019
APPENDIX A
Mayor
2300 Civic Center Place Miramar, Florida 33025
Phone (954) 602-3115 Fax (954) 602-3547
January 31 , 2013
John W. Scott, Inspector General Broward Office of the Inspector General One North University Drive, Suite 111 Plantation, FL 33324
RE: OIG Closing Memorandum of RFP No. 12-11-14
Dear Mr. Scott:
The City of Miramar has reviewed the Office of Inspector General ("OIG") Closing Memorandum of Request for Proposal ("RFP") No. 12-11-14 and is satisfied that the investigation conducted has revealed that the allegations of misconduct were not substantiated. Additionally, the City has assessed the recommendations made by the OIG staff designed to improve the procurement process used by the City to ensure that all vendors are given a fair and equal opportunity when competing for business. While the City understands, accepts and will seek to implement such recommendations, it respectfully requests that the following clarification points be included as part of the final document.
• As it relates to the OIG's findings of accounting for proposals received: it is important to clarify for the record that the City Clerk received seven proposals, as documented on the handwritten RFP "Opening Sheet". The seventh proposal was not presented to the evaluation committee because the vendor did not attend the mandatory pre-proposal conference. This caused the vendor to immediately be deemed non-responsive and ineligible for further consideration for award.
Considering the OIG's recommendations on this matter, in the future, all responses, even those that are deemed ineligible on their face or are a 'no bid', will be provided to the evaluation committee. Staff will provide information regarding the responsiveness of all proposers and the action of the committee pertaining to responsiveness will be recorded in writing.
• With reference to the OIG's commentary regarding the pre proposal meeting: the City does not believe that the conversation between its staff and one of the potential proposers, who is also a current City vendor, dissuaded competition. In fact, the vendor who commented on the
CITY OF MIRAMAR An Equal Opportunity Employer conversation indicated that it still would have submitted a bid if
the process had been an Invitation for Bid ("IFB") rather than an RFP, but that vendor did not submit a response to the subsequent IFB. Thus, the vendor cho_se, for unknown reasons, not to participate in the IFB process. It is thus speculative to assume that there was any effect on the solicitation process by virtue of the conversation at the pre-bid meeting.
In accordance with the OIG's recommendations, the Procurement Department will continue to train and advise City staff not to converse with vendors on any matter before and after any public meetings in the evaluation process to allay the appearance of favoritism.
• In reference to the OIG's discussion on allowing vendor to withdraw its pricing: the City desires to only enter into contracts with vendors that can successfully perform. Garden of Beauty submitted a price for one of the locations in the RFP scope of work that was significantly lower than that of the other proposers. In this case, the City has the obligation to determine if the proposer is able to accomplish the proposed service with the proposed methodology, resources and price in a manner satisfactory to the City. City Procurement Policy 12.3.1 Section 2.803 authorizes the Chief Procurement Officer to request from the proposer a substantiation of offered prices based on adequate price competition. Garden of Beauty was unable to do so. If the City had not rejected the proposals and canceled the RFP, this would have increased the total price to the City for these services. However, it would have helped to ensure that the services would be performed as required under the contract, as opposed to awarding the lot to a vendor that could not perform at that location.
The OIG's observation is. relevant and when issuing RFPs the City will describe in detail how these situations will be handled.
The City makes every effort to ensure that the procurement process is handled with the highest level of integrity for any person, group, or business intere~ted in conducting business with the City. The City will strive to ensure that all specifications and scopes of work will be as detailed and descriptive as possible on future solicitations, with a clear delineation of the award process. As the OIG has recognized, the City has already commenced proactively addressing many ·of the concerns by rejecting the original RFP, issuing a new IFB, and awarding contracts as a result.
CITY OF MIRAMAR An Equal Opportunity Employer
The City appreciates the OIG's recommendations to improve its processes and implement additional best practice measures. Should you have any questions, please feel free to contact Procurement Director Randy Cross at (954) 602-3054.
c. The Honorable Mayor and City Commission Wazir A. Ishmael, Ph.D., Deputy City Manager Donald J. Waldron, AICP, Assistant City Manager Vernon E. Hargray, Assistant City Manager Tom Good, Public Works Director Randy Cross, Procurement Director Jaime A. Cole, City Attorney
OIG CPOP Miramar Memorandum
OIG 12-019 Appendix Sheet