C2E-Reject All Proposals Received Audits Of Resort Taxes And Other Internal AudiCOMMISSION ITEM SUMMARY
Condensed Title:
Request Approval To 1) Reject All Proposals Received Pursuant To Request For Proposals (RFP) No.
188-2013TC For Audits Of Resort Taxes And Other Internal Audits As Needed; And, 2) Authorize The
Extension Of Existing Contracts Pursuant To RFP 23-09/10, On A Month-To-Month Basis Until Such
Time As A New Contract Is Awarded.
Key Intended Outcome Supported:
Improve the City's Overall Financial Health and Maintain Overall Bond Rating
Supporting Data (Surveys, Environmental Scan, etc.): The City's overall bond rating is Aa2 and AA-
according to Moody's and Standard and Poor's respectively.
Issue:
Shall the City Commission Reject the RFP and extend the existing contract on a month-to-month basis
until such time as a new contract is awarded?
Item Summary/Recommendation:
The City of Miami Beach charges a resort tax of three percent on revenues generated by the sale of rooms
and two percent on revenues from food and beverages earned within the City. Businesses are required to
register with the City to collect and remit taxes. It is projected that $54.2 million in resort taxes will be
collected in fiscal year 2012/13. Currently, the City has three field agents and professional service
agreements with three contractors (RGL Forensics, BCA Watson and Rice, and Marcum Rachlin) which
expire October 21, 2013.
As a result, Request for Proposals (RFP) 188-2013TC was issued on May 10, 2013, with an opening date of
June 18, 2013. The pre-bid conference was held on May 23, 2013. Notices were sent to 78 prospective
vendors which resulted in the receipt of four (4) proposals. The Administration has completed an initial review
of the proposals receive and has determined that an inadequate number of responses and qualifications have
been received to perform the services required by the City.
Of the four (4) firms responding to the RFP, one firm responded only to the audit of resort taxes portion of the
scope, one firm responded only to the internal audits portion of the scope and the two remaining firms
responded to both type of audits. Two of the firms responding to the RFP have existing or prior agreements
with the City to conduct the same types of audits. For one of the applicant firms currently providing these
services to the City, performance of internal audits has been good; however, City audit staff has experienced
some performance issues with their audits of resort taxes, such as delays in responsiveness, not meeting the
required number of completed audits, and return of audits after the City's review for lack of quality of
work. Another applicant firm, while not having a previous contract with the city, has worked for the City
through a previous firm for which the City has experienced similar performance issues in audits of resort
taxes. Due to the low number of responses and prior performance issues with some of the applicant firms, the
Administration believes that the City would benefit from having additional firms under contract for these
audits.
Accordingly, the Administration is recommending rejecting all proposals received and conducting an industry
meeting with the intent of discussing any potential inadvertent barriers that may have prevented more firms
from participating with the goal of attracting additional prospective vendors to submit proposal for audits
services.
Recommendation
After considering the review and recommendation of City staff, the City Manager exercised his due diligence,
carefully considered the specifics of this RFP process, and recommends to the Mayor and City Commission
to reject all proposals received pursuant to RFP 188-2013TC and extend the current contracts with RGL
Forensics, BCA Watson and Rice, and Marcum Rachlin {for internal audits only), pursuant to RFP 23-09/1 0,
on a month-to-month basis until such time as a new contract is awarded.
Advisory Board Recommendation:
IN/A
Financial Information:
Source of Amount
Funds: 1 N/A
Total N/A
Financial Impact Summary: N/A
City Clerk's Office Legislative Tracking:
James Sutter, ext. 617 4
MIAMI BEACH
91
Account
AGENDA ITEM C.;2.f5
DATE f'--//-J3
MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachA.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Me
DATE: September 11, 2013
SUBJECT: REQUEST APPROVAL TO: 1) REJECT ALL PROPOSALS RECEIVED
PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 188-2013TC FOR
AUDITS OF RESORT TAXES AND OTHER INTERNAL AUDITS AS NEEDED;
AND, 2) AUTHORIZE THE EXTENSION OF EXISTING CONTRACTS ON A
MONTH-TO-MONTH BASIS UNTIL SUCH TIME AS A NEW CONTRACT IS
AWARDED.
ADMINISTRATION RECOMMENDATION
Reject the RFP and extend the existing contract on a month-to-month basis until such time
as a new contract is awarded.
BACKGROUND
The City of Miami Beach charges a resort tax of three percent on revenues generated by the
sale of rooms and two percent on revenues from food and beverages earned within the City.
Businesses are required to register with the City to collect and remit taxes. It is projected
that $54.2 million in resort taxes will be collected in fiscal year 2012/13. Currently, the City
has three field agents and professional service agreements with three contractors {RGL
Forensics, BCA Watson and Rice, and Marcum Rachlin) which expire October 21, 2013.
These agreements were awarded for one year with two one-year renewals after a RFP was
authorized on February 3, 2010 by the Commission and the ranking of proposals was
accepted by the Commission on May 12, 2010.
In addition, the City Administration may determine a need to audit a particular area whereby
the Internal Audit Division does not have the resources to audit at a particular time. In the
past, the Administration has sought outside assistance from qualified firms to accomplish
these assignments.
The Administration is requesting to reject the results of the current RFP and to explore
alternative courses of action for soliciting firms to perform these audits. Justifications for
rejecting the RFP are as follows:
• A total of four firms responded to the RFP. One firm responded for the audit of
resort taxes, one firm response to the other Internal Audits as deemed necessary
and the two remaining firms responded to both type of audits. The deadline for
receipt of proposals was extended once to allow for more responses. The City
would benefit from having additional firms under contract for these audits.
Two of the firms responding to the RFP have existing or prior agreements with the City to
conduct the same types of audits. City audit staff has experienced some type performance
issues with these firms such as delays in responsiveness, not meeting the required number
of completed audits, and return of audits after the City's review for lack of quality of work. For
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Commission Memorandum -RFP Auditing Services
September 11, 2013
Page 2 of 2
one of the firms providing these services, performance of internal audits was good however
City audit staff has experience some performance issues with their audits of resort taxes
such as delays in responsiveness, not meeting the required number of completed audits,
and return of audits after the City's review for lack of quality of work. Another applicant,
while not having a previous contract with the city, worked for a previous firm having a City
contract and experienced similar performance issues in audits of resort taxes.
The Administration is recommending conducting an industry meeting to draw in more
prospective vendors to apply for the Request for audits. The possibility of utilizing a Request
for Qualification (RFQ) rather than Request for Proposal (RFP) is being explored.
RFP PROCESS
Request for Proposals (RFP) 188-2013TC was issued on May 10, 2013, with an opening
date of June 18, 2013. The pre-bid conference was held on May 23, 2013. During the pre-
bid conference, prospective bidders were instructed on the procurement process and the
information their respective proposals should contain.
The Public Group and Bidnet issued bid notices to 19 and 53 prospective bidders
respectively of which 12 and 3 accessed the advertised solicitation respectively. In addition,
6 vendors were notified via email, which resulted in the receipt of the following four (4)
proposals:
• Crowe Horwath, LLP
• Kilgour & Associates, LLC
• Marcum, LLP
• RGL, Inc. d/b/a RGL Forensics
CITY MANAGER'S DUE DILIGENCE
After considering the review and recommendation of City staff, the City Manager exercised
his due diligence and carefully considered the specifics of this RFP process. As a result, the
City Manager recommends to the Mayor and City Commission to reject all proposals
received pursuant to RFP 188-2013TC and extend the current contracts with RGL
Forensics, BCA Watson and Rice, and Marcum Rachlin, pursuant to RFP 23-09/10, on a
month-to-month basis until such time as a new contract is awarded.
CONCLUSION
The Administration recommends that the Mayor and Commission reject all proposals
received pursuant to Request for Proposals (RFP) No. 188-2013TC for Audits of Resort
Taxes and other Internal Audis as Needed and authorize the extension of existing contracts
with RGL Forensics, BCA Watson and Rice, and Marcum Rachlin, pursuant to RFP 23-
09/10in a month-to-month basis until such time as a new contract is awarded.
JLM/ 8/JS/AD
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