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Broward bidding process for county’s vending machines could leave plenty of money on the table

The county appears to have accepted a contract that could see them miss out on significant revenue.

A vendor involved in the bidding process for a new slate of vending machine contracts with Broward County is raising questions over the county’s decision-making process in vetting those bids.

The bids, which are expected to be voted on by the County Commission in the coming weeks, are split into five distinct groups of machines. At issue is Group 1 — covering buildings such as the Broward County Judicial Center and the Broward County Main Library — and Group 4 — encapsulating Port Everglades.

The county is in the process of moving forward with a contract with Gilly Vending, where the company would rent space in those areas to provide vending machine services.

But in a November email obtained by Florida Politics, one of Gilly’s competitors asserted the process should not move forward. That email was directed to the Broward County Purchasing Division — the agency responsible for overseeing the bidding process.

That competitor argued Gilly “has submitted a materially unbalanced bid in an effort to unethically win the bid by providing a fictitiously higher amount specifically for machines that were addressed by multiple vendors as machines with low foot traffic or sales during the pre-bid meeting.”

The county contract allows vending companies to remove underperforming machines and cease paying rent for those spaces. While vendors must receive permission from the county, a review of previous removals and discussion with industry experts show the county has routinely cooperated with removal requests.

Florida Politics has reviewed the bids submitted by each company. Gilly appears to have routinely overbid for low-performing spaces and in turn underbid for high-performing spaces. The email detailed one such allegation.

One specific machine is the ‘Elderly and Veterans Services Division’ with a current bid of $1,756.50 per month by Gilly vending, this same machine was previously removed under the current contract by Gilly Vending,” the email continued.

In our opinion Gilly bids for Elderly and Veteran Services machines’ for $1,756.50 for one machine vs $7.50 for the machine next to it (that is a difference of 23,420.00% between two machine next to each other), among others, can easily be considered an extreme materially unbalance amount. More so when this vendor already had a machine in the same location under the current contract and removed it.”

That rival bidder argues Gilly could again eventually push to remove the low-performing machines, given that sales would not be selling enough to justify Gilly’s high rent bids for those slots.

Doing so would, in turn, leave the company paying bargain-basement rates for high-performing machines, and leave the county with less revenue overall as compared to competitors’ bids.

The potential problem appears to be masked by the fact that Gilly made the highest overall bid in Groups 1 and 4 out of four vendors bidding.

The bidding process saw each company place a bid for each vending machine space in those groups. The county then tallied the total bid per group together.

Gilly offered more than $640,000 each in Groups 1 and 4, nearly $130,000 more than its next-closest competitor, winning them the contract.

But those totals include what appear to be overbids by Gilly. If those underperforming machines are removed, that would lower the total money being paid by Gilly.

It’s that potential scenario that led one of Gilly’s competitors to argue the Broward County Purchasing Division was ignoring its own rules.

The Broward County Procurement Code seeks to protect against so-called “unbalanced bids.”

“A bid with extreme variations from the County’s estimate, or where obvious unbalancing of unit or lump sum prices has occurred, shall be thoroughly evaluated,” the code reads.

“Where obvious unbalanced bid items exist, the Director’s decision or recommendation to award or reject a bid shall be supported by written justification. A bid found to be mathematically unbalanced, but not found to be materially unbalanced, may be awarded. “

Needless to say, that rival vendor contends the county has not properly justified awarding Groups 1 and 4 to Gilly.

“I would certainly appreciate if the procurement department took the ethically and morally correct decision of resolving this matter without having to go thru a unnecessary protest, which would be a total waste of time and money because of one bad vendor.”

A formal protest has not been filed in the case. The deadline to do so was Monday, Feb. 10.

Florida Politics attempted multiple times to contact the Broward County Purchasing Division in order to better understand how the process was conducted. The agency has not responded.

Florida Politics also contacted Gilly Vending seeking comment on its bid. This piece will be updated should the company issue a reply.

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