OIG No. 21-44 Contract Oversight,DocuSign >Envelope ID: 0B0D9560-E2CB-4D1 F-8F01-1 AD0E50A2A3F
CMB response:
Page 30, #5 of the "Special Conditions" of the referenced solicitation document, RFQ 2016-152-WG, entitled, REAL ESTATE BROKERAGE SERVICES, contained the
following clause:
5)NON-EXCLUSIVITY.
It is the intent of the City to enter into an agreement with the successful Bidder that willsatisfy its needs as describe herein. However, the City reserves the right as deemed in itsbest interest to perform, or cause to be performed, the work and services, or any portion
thereof, herein described in any manner it sees fit, including but not limited to award ofother contracts, use of any contractor, or perform the work with its own employees
CBRE question:
Why was the "Procurement" referred to as a "proposal request" rather than one of the
recognized types of public procurements such as a "Request for Proposals"?
CMB response:
A Request for Proposals (RFP) typically means a formal competitive solicitation above an
agency's formal bid threshold. The City's formal bid threshold for these services is
$100,000. As the staff of the Economic Development Department did not believe
proposals would exceed this threshold, a formal competitive solicitation was not required.
CBRE question:
Why was the "Procurement" conducted in such a rushed manner, with respondents being
given only two and a half business days to submit proposals for how they could assist the
City with a construction project that one commissioner referred to as "a once in-a
generation opportunity"?
CMB response:
The short notice between the March 10th issuance and asking the Commission to approve
an RFP solicitation, was due to the next Commission meeting being held on the March 17,
2021. At that meeting, the City Commission adopted Resolution No. 2021-31617,
authorizing preparation of an RFP for mixed-use development incorporating Class A office
space at four City-owned sites along Lincoln Lane North, including the 17th Street parking
garage (G5). The Administration believed it was important to secure a consultant to assist
with the development of the RFP as soon as possible, because the City Commission had
expressed its desire to review the RFP at its April 21st Commission meeting.
CBRE question:
Why does the cost of Colliers' proposal differ so drastically from that submitted by the
other vendors? How does Colliers intend to be compensated for the significant work that
it would be asked to perform under a resulting contract?
CMB response:
This is not a question that can be responded to by the City, as a vendor is entitled to
propose any dollar amount they wish to provide, however, staff contacted Collier
International to confirm their pricing, and they replied, "We have reviewed the proposal that our team submitted on March 15, 2021 and have re-confirmed that the proposal
accurately outlines our services and that we are committed to performing the tasks
identified for the stated fee of $15,000." As of this date, Colliers International Florida has performed the requirements of their contract and continues to fulfill their obligations under
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DocuSign Envelope ID: 0B0O9560-E2CB-4O1 F-8F01-1 AD0E50A2A3F
the terms and conditions of its agreement with the City.
The OIG Contract Oversight Consultant spoke with Procurement and Colliers personnel and
examined documents in connection with Colliers' performance of its contract with the City, in order
to determine the circumstances of the bid disparity. It was found that Colliers, in connection with its preparation pursuant to the contract, of RFP 2021-173 for development of City-owned Lots
and Garage, had included language in its financial proposal to the City on the RFP that would
have provided Colliers with an "advisory fee" equal to 4% of the appraised value of each City site.
Because this was not part of Colliers' original bid to the City, the proposed language was not
approved by the Procurement Director, Alex Denis. That led to an email from Ken Krasnow at
Colliers to Denis and the City's Economic Development Director, Rickelle Williams, in which
Krasnow, apologizing for "the confusion with regard to the added RFP fee language," gave the
answer referenced in the final City reply to CBRE's complaint, as noted above, that it was
reconfirming its original bid proposal and would perform the tasks required under its contract for
$15,000.
The OIG has confirmed with Ms. Williams that Colliers has been fulfilling its responsibilities
satisfactorily in compliance with the contract. The solicitation closed on January 12, 2022, and an
evaluation committee convened on February 1, 2022. As a result of Colliers's participation in
developing the criteria for the solicitation, three viable proposals were reviewed by an Evaluation
Committee and the results will be sent, as a recommendation, to the City Commission for award of the contract. Colliers has additional responsibilities remaining to be completed under the terms and conditions of its contract, and the OIG will continue to monitor the progress of this project and
Colliers's performance of the contract terms.
In response to the OIG Draft Report, CBRE's attorney reiterated its claims in the attached
correspondence, questioning the propriety and legality of the procurement process, the
performance of Colliers under the contract, and whether City staff had acted in the best interests
of the City. CBRE maintains that it should have been awarded the contract, but has submitted no
further evidence in support of that claim.
The OIG has consulted with the City Attorney, who has confirmed the City's position that the City
has no obligation to issue competitive solicitation for goods and services valued under $100,000,
which was what the City intended by issuing an informal RFP; and that, based on past Florida
Court rulings, the City has wide discretion in the bidding process to act as it did in this instance.
He noted that CBRE failed to cite a single code provision, statute or case in support of its claim
that it should have issued a formal competitive solicitation.
CONCLUSION
This review was opened based on the significant discrepancy among the bids received on this
contract, and concerns raised by CBRE's attorneys regarding whether the contractor could honor
the contract at the $15,000 bid price. What appeared to be an attempt by Colliers to depart from
the terms of its bid in the contract preparation stage by inserting a 4% "advisory fee" was properly
rebuffed by the City. In the course of this review, the OIG has found no evidence of fraud, waste
or abuse by the City departments involved in the procurement process.
After speaking with staff of the Procurement and Economic Development Departments, as well as Colliers International Florida, and after review of the issues raised in the Foley & Lardner LLP
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, DocuSign, Envelope ID: 0B0D9560-E2CB-4D1 F-8F01-1 AD0E50A2A3F
correspondence with the Inspector General submitted on behalf of CBRE, the OIG found that City
Administrative staff members acted in good faith and in the best interests of the City. Its
performance in this matter in ensuring that Colliers adhered to its original bid proposal may have saved the City nearly $300,000, for which they should be commended.
The complaint of CBRE regarding the City's procurement in this matter, though based on an
admittedly unusual disparity in the original bid amounts, is unsubstantiated and this inquiry is
concluded. The OIG will monitor further performance of the contract as necessary.
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Contract Oversight Consultant
OFFICE OF THE INSPECTOR GENERAL, City of Miami Beach
l 130 Washington Avenue, 61h Floor, Miami Beach, FL 33139
Tel: 305.673.7020 • Fox: 305.206.5509 • Hotline: 786.897.1111
Email: CityofMiomiBeochOIG@miomibeochfl.gov
Website: www .mbi nspectorgenerol .com
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