By Chuck Strouse
By Scott Fishman
By Terrence McCoy
By Ryan Yousefi
By Ciara LaVelle, Kat Bein, Carolina Del Busto, and Liz Tracy
By Pepe Billete
By Ryan Yousefi
By Kyle Swenson
Why would the Dade County Commission approve a two-million-dollar contract for undercover cop cars that:
A) actually caused police to ration their undercover vehicles?
B) subverted the county's standard bid procedures?, and
C) left the county embroiled in a nasty lawsuit?
Well, son, as your father used to say, it's a long story. Unfortunately, the story of "bid 0898-10" is also a lesson in how government really works. Or fails to.
It all began in July of 1992, when the county put out a bid request for undercover police vehicles. Three months later the commission voted to award the one-year contract to InterAmerican Car Rental. No big change there -- InterAmerican had held the contract since 1986 and was offering a rental rate far lower than that of its nearest competitor, Royal Rent-A-Car. Both companies are locally owned.
On November 1, when the contract kicked in, Royal Rent-A-Car's owner and president, Ismael Perera, didn't make any protest. But this past January he complained to the county that InterAmerican should not have been awarded the bid because the company had failed to meet the contract requirements: Specifically, its insurance included a "self-retention" clause. This provision, similar to a deductible, meant InterAmerican would have to pay up to $200,000 on any claims before its insurance company took over. Should InterAmerican fail to pay, the county would have become liable. Royal, by contrast, was fully self-insured.
In March Victor Monzon, director of Dade's General Services Administration (GSA), reviewed Perera's complaint and concluded that InterAmerican hadn't violated the contract; the bid specifications made no mention of self-retention. At Perera's urging, however, Monzon did seek a legal opinion from the County Attorney's Office, and a month later Assistant County Attorney Hugo Benitez opined that InterAmerican had violated the contract. Twice the issue was set to go before commissioners. Twice it was delayed. In early July a thoroughly frustrated Perera hired Debbie Ambey, a local political consultant, to lobby on his behalf. Ambey immediately set about courting commissioners and their staffs.
The commission finally took up the issue on the evening of July 29. Before the meeting County Manager Jauquin Avi*o sent a memo to commissioners outlining his views. "Historically, due to the nature of the insurance market, GSA's Risk Management has accepted some form of self-insurance," he wrote, adding, "Dade County has never been confronted with a dispute of this nature." Avino's recommendation was simple: Cancel InterAmerican's contract, draw up new specifications, and seek new bids for the contract.
Curiously, the commission, led by Vice Chairman Maurice Ferre, nearly endorsed Avino's recommendation without realizing what they'd done.
"Uh, Mr. Vice Chairman, I think we're going a little too fast," Commissioner James Burke interrupted, after the inadvertent vote.
"Oh, I'm sorry," Ferre mumbled, checking his agenda. "That was Royal, wasn't it? All right, move to reconsider the issue."
Victor Monzon spoke first, again urging commissioners to resolve the issue by seeking new bids for the contract. Then Burke suggested that Royal be awarded the contract for the interim.
Robin Lukacs, Perera's attorney, called that suggestion "ludicrous. Royal was the lowest responsive bidder, and as such we have a contract right which has been denied," he announced. "What we're asking for is a good-faith measure. We can make matters straight by allowing Royal to take over this contract for one year."
Sensing his distinctly litigious language, Burke asked Lukacs: "If the commission did as you suggest, would Royal sign an agreement waiving all liabilities that we may have?"
"Absolutely," Lukacs responded. "This is a win-win situation. It's the best resolution for all." The commission quickly concurred. After a brief debate, Chairman Art Teele proposed awarding Royal the contract for the following year. The motion was seconded by Burke and passed unanimously. Lukacs and Ambey, who was also present in the chamber, were overjoyed.
Metro-Dade cops have been less effusive. Thanks to Royal's higher rates A which average about $100 more per week than InterAmerican had charged -- the police department has had to reduce its fleet dramatically. "Because of the cost increase, we've got a deficit of $431,000, which equates to probably 55 or 60 cars," reports Irving Heller, the force's assistant director of department services. "What we're doing now is adapting. We're going to try to fill the void with replacement cars from other [non-patrol] units and next year we'll request more money."
The rank and file, who often get to take home leased vehicles as a job perk, have not been so diplomatic. "This whole fucking thing is a scam," blares one officer, who requested anonymity. "They're yanking us off the street because they don't have enough cars." Several disgruntled cops have lodged informal complaints with the State Attorney's Public Corruption Unit. That office has yet to open an investigation.
It would not be the first time Royal has been probed by prosecutors. Last May the FBI and the State Attorney's Office investigated allegations that Miami Commissioner Victor De Yurre helped Royal win a $370,000 city contract after the company donated free car services to .his campaign. No charges were ever brought against De Yurre or any Royal employee.
More embarrassing for Royal has been its inability to provide all the vehicles called for in the contract. In a November 8 memo, Juan Fernandez, the Metro-Dade police Transportation Section commander, complained that Royal had only five cars ready for delivery: "I reminded Mr. Perera of the commitment he had made on August 24, 1993, to have 250 vehicles available at the end of October and an additional 200 vehicles by the second week of November 1993." The next day Fernandez filed a formal "Vendor Non-Performance" complaint against Royal. As of late November Royal was "about 60 cars" short of its contracted requirement, according to Fernandez.
The kicker? Because the commission awarded the contract to Royal without soliciting other bids, the county cannot legally lease vehicles from another company -- without slogging through a new bidding process -- in order to relieve the shortfall.
Ismael Perera did not return phone calls from New Times. But Royal's attorney, Robin Lukacs, dismissed the supply problems. "We've heard some noise about the police wanting more vehicles. But the contract plainly provides for a period of transition."
The owners of InterAmerican Car Rental, meanwhile, have filed suit against the county, claiming that Royal "enlisted the aid of a lobbyist to circumvent the county's staff and pursue a political route to obtain this contract."
"I don't want to sound like sour grapes," says InterAmerican Vice President Rick Byrd. "But this guy at Royal stole the thing from me." Byrd says he plans to find out what happened behind the scenes by sending subpoenas to the commissioners he feels might have been unduly influenced by lobbyist Debbie Ambey: Maurice Ferre, James Burke, Alex Penelas, and Art Teele, who is a friend of Ambey's.
Ambey says the allegations of political shenanigans are absurd. She admits she briefly discussed Royal's complaint with several commissioners, including Burke, Teele, and Bruce Kaplan. "But my only objective was to provide information that may not have been made available by the county staff," she stresses. "All I wanted was an open debate of the issues. What happened at the meeting exceeded my expectations."
The Royal/InterAmerican feud has, at least, inspired county bureaucrats to address the issue of insurance, which has proliferated in the post-Hurricane Andrew insurance market. GSA director Victor Monzon says he has reworked bid specifications on a number of county contracts to include a provision for self-retention insurance, provided the vendor supplies a letter of credit, surety bond, or cash deposit. In reviewing rental car contracts specifically, he notes that he has not found a single instance in which a self-insured vendor failed to pay a claim.
All of which has left him puzzled by the commission's decision to award a two-million-dollar contract without putting it out to bid. "I don't understand it," he says. "But it's certainly their prerogative. I've got nothing against anybody; my only issue is what price am I gonna pay.