Technical Knockout

Being aced out of a municipal deal under these circumstances can make a security contractor feel downright insecure

Like any right-thinking municipal bureaucracy, Miami tries to be fair to minority-owned companies when handing out city contracts. In fact, an ordinance enacted a decade ago (and amended four years later) requires that at least 51 percent of all city business go to firms owned by women or ethnic minorities. The law applies to every city division, including semi-autonomous departments such as the Miami Parking System -- a fact Gabriel Adeife knows all too well.

For seven years Adeife has run Gabriel Security, a small, independent firm. Recently Gabriel was one of a dozen outfits to submit bids for a two-year contract to guard fifteen Miami Parking System lots and all five city parking garages. The bids were evaluated by Parking System officials, who used a point system to weigh criteria such as business experience, minority ownership, competitiveness of bid, and civic responsibility. When all the points were toted up, Adeife's company received a very high score -- 86 out of 100 possible points. Fifteen points were awarded because Adeife is black.

Gabriel Security didn't win the contract, however. Adeife was edged out by a newer company, Armor Security, which scored 89 points. Because Armor has been in business for only two years, it received only eleven of twenty possible points for experience. But the young company's bid ($433,260 compared to Gabriel's $494,160) won it 23 of a possible 25 price points. And like Gabriel, Armor look the full fifteen-point allotment for minority ownership.

That's what frosts Gabriel Adeife. "They may be low on price, but a minority they are not," he seethes.

Armor, Adeife contends, was created solely to exploit the climate favoring minority proprietorship: In October 1993, two longtime local companies, Feick Security and Vanguard Security -- neither of which is minority owned -- formed a third company, Armor, with a man named Alfredo Gasteazoro as majority owner and president. Before entering the ownership ranks, Gasteazoro had been a manager at Vanguard. He is also Nicaraguan, and that made Armor a minority-owned company.

"Feick is not a minority vendor. Vanguard is not a minority vendor," Adeife argues. "They couldn't win the [Parking System] contract if they were separate entities. They are not a minority."

Though others agree with Adeife's assessment, they are quick to note that such corporate-structure coyness is completely within the bounds of the law. Says a honcho at Wells Fargo (which finished third in the Parking System sweepstakes): "I think they got together and formed a minority company. But it's legal. It's 100 percent legal." Adds Clark Cook, the Parking System's director: "This sort of thing has been going on for 400 years."

Armor president Gasteazoro makes no bones about his company's roots. "The ownership of Armor consists of executives who currently own parts of and hold positions with Feick Security and Vanguard Security," he wrote in a letter to Clark Cook that accompanied his bid. "Armor has the complete support of both Feick Security and Vanguard Security regarding all aspects of operation to include radio and frequency, financial, supervision, management, etc."

Gasteazoro says Armor was formed to tap the low end of the security market. Vanguard and Feick, he claims, have grown too big to handle anything other than high-visibility, top-dollar accounts -- Dade County Public Schools, Burger King's world headquarters, and the like. "They are leaving aside the low-bid contracts," he explains. "Why not create a new corporation just to address this market? It's an open market, why not take it?"

Armor, Gasteazoro continues, is more than the product of shrewd manipulation; it's his chance to make a go of it on his own, after seventeen years spent helping to build Vanguard into the second-largest security company in South Florida (Wackenhut is number one). While Gasteazoro won't say exactly how much money he personally invested in Armor -- "This is like going into information that really is not public" -- he says it only took between $30,000 and $40,000 to start up the new enterprise, and that much of the seed money was provided for him. "Gary Feick put in about $5000," he says of Feick Security's vice president, who is also a partner at Armor. "[Vanguard director] David Shopay put in about $10,000, another partner put in a few thousand dollars. There's really not a lot of money that needed to be raised."

Though Vanguard and Feick are separate -- and competing -- entities, both are closely tied to Armor. The new company rents a suite in the same building as Vanguard. Armor's security-switchboard and dispatch needs are subcontracted to Vanguard, and Vanguard and Feick also supply supervisors for Armor jobs. Gary Feick, Gasteazoro's partner at Armor, remains a vice president at his family's security company. Vanguard director David Shopay is one of Armor's corporate officers. Gasteazoro even continues to draw a salary from Vanguard.

But Gasteazoro emphasizes that once his employment contract with Vanguard expires (he won't divulge when), Armor will be his only job. "All my eggs are in this basket," he explains. "This is my chance to compete, and if Armor goes, I go."

In the meantime, however, Gasteazoro seems to be taking full advantage of his connections. The winning bid package submitted to the Miami Parking System contained a list of references not only from Armor jobs, but also from Feick and Vanguard jobs, a fact that further blurs the line between the three companies. Though Gasteazoro denies misrepresenting Armor's work history ("We would never do that," he says), the long record made a favorable impression on Parking System officials, who are not generally predisposed to award contracts to new companies.

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