LTC 274-2004 Findings of the State Attorney and the Miami-Dade County Commission on Ethics and Public Trust Regarding Sponsorship RFP Bid Protest Allegations
CITY OF MIAMI BEACH
Office of the City Manager
Letter to Commission No. 274-2004
m
From:
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez ~~
City Manager
Date: October 20, 2004
To:
Subject: FINDINGS OF THE STATE ATTORNEY AND THE MIAMI-DADE
COUNTY COMMISSION ON ETHICS AND PUBLIC TRUST
REGARDING SPONSORSHIP RFP BID PROTEST ALLEGATIONS
Attached please find the final report of the State Attorney and the Miami-Dade County
Commission on Ethics and Public Trust regarding an inquiry they made into allegations
made in a bid protest for the sponsorship and citywide corporate marketing program RFP.
The report thoroughly analyzed the process and the conduct of the two principal public
officials, Assistant City Manager, Robert Middaugh and Development Coordinator, Jay
Moore. The findings of the report are that there were no inappropriate actions in either a
criminal or ethics context that warrants further investigation or prosecution by either the
State Attorney or the Ethics Commission.
Also attached for the Commission reference is a copy of an LTC sent to the members of
the City Commission prior to the initiation of the State Attorney investigation. Commission
members will note that all of the information contained in the LTC has been verified as part
of the State Attorney investigation.
With the closure of the State Attorney and the Commission on Ethics and Public Trust
cases, it is now time to consider the appropriate next steps on this issue. We must review
and perhaps rethink our approach and potential involvement in this area. A cautionary
note is reported in the October 2004 edition of Govemina Maaazine:
The Contractino side of these deals reauires special attention.
Linaerino unease about marketina in the public sector means
that any deal will be closely scrutinized. In addition. competition
for some of these deals - especially in the beveraae business -
can be so cutthroat that losina bidders have been known to slina
mud at the contractino process after the fact. "The competitive
nature of these industries is that if yOU pick one over the other,
the loser will fioht hard to kill the deal or sway the counciL" says
Mark Duebner in Dallas. Texas.
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Our recent experience serves as a clear example of this unfortunate practice. It is
important for us to consider these unintended outcomes and determine whether we wish
to continue to explore this potential revenue source and, if so, develop the appropriate
safeguards and criteria which, hopefully will mitigate any potential pitfalls.
Shortly, I will refer a discussion item to Committee to evaluate this issue and to seek
guidance and direction on how to proceed.
Should you require additional information, please feel free to contact me.
JMG\pw
F:\cmgrl$ALL IBOBlstateattybidprotestsponsorshipltc2.doc
Attachment
10'13:04 FRI 11:28 FAX 305 547 0772
STATE ATTY SP PROSE
I4l 00 1
.
STATE ATTORNEY
eLEVENTH JUDICIAL CIRCUIT OF FLORIDA
E. R. GRAHAM BUILDING
13S0N.W.12TIiAVENUE
MIAMI, FLORIDA 3313&-2111
KAT lIERINE FERNANDEZ RUNDLE
STATE ArroRNEY
lELEPHONE(30S) 547-0100
FAX COVER SHEET
TO:
Francis
WlMayor David Dermer Office
FROM:
Howard Rosen
Assistant State Attorney
ME:;SAGE:
NUMBER OF PAGES:
11 pages (including this cover page)
NUMBER DIALED:
305-673-7096
DATE AND TIME SENT: October 15, 2004
BY: Tony
If rou have any problems or questions, please call: Susi, at: (JOS) 547-0664.
Th~lDk you.
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Please Recycle
0100 -lloannontllSAScF
10/15/04 FRI 11: 28 FAX 305 547 0i72
STATE ATTY SP PROSE
141002
(i)
CLOSE OUT MEMO
PRELIMINARY INQUlRY
Public Corruption Unit
-==
...:1
A.S.A:
HOWARD R. ROSEN
lNVESTIGATI01'~: 54-04-149
~rATln<E
DATE: Septembl r ! I. 2004
DATE,~~,lrr
JOJ'
~: J. ARROJO ChIef Ass stant
DATE:
l~ r\~:L\ u'-i
--
__.11
SUBJECT MA TIER:
Inquiry into the City of Miami Beach Request For Propos .I~ (I ~P) 66-02/03, for the
development and implementation of a citywide corporate a: ad eting and sponsorship
program.
INVl :snGA TOR:
AGE \lCY:
BEVERLY MORRISON
Special Agent, Miami-Dade County Commission on Ethics and I)l bIi; Trust
CONCLUSION:
This inquiry was initiated upon the receipt of a referral from Miami Beach Ma '0. I: avid Denner, who requested
a conplete investigation into tbis matter based upon a bid protest letter which the Ci y )1' Miami Beach had received.
Tbe ?.1iami-Dade County Commission on Ethics and Public Trust worked very closely ~it. Il,e Miami-Dade County State
Attomey's Office on this investigation. and in fact at least one investigator from the Mi ,11 d-[ lade County Commission on
. Ethic. and Public Trust was present for and participated in each sworn statement t1 al V,'lS taken. Numerous sworn
statements were taken, and bascd upon the facts as presented, there is insufficient C' it ml.:e upon which to prove any
criminal charges.
Pagel
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STATE ATTY SP PROSE
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The City of Miami Beach became interested in taking the City of Miami I e: .:h into the world of corporate
marl:eting and sponsorship. This is a relatively new phenomenon wherein municipal it e; h;lve been rmding new sources
of revenue, just as private enterprises have been doing for quite some time, byenterin! hlte' sponsorship agreements with
corp)rate America. The most obvious example of this in the private sector is in stadi\ n n' ming rights. A stadium such
as the one in which the Florida Marlins and the Miami Dolphins play was named for" )r:, ); layer", a division of Fruit-of-
the-I.oom. rropicana Field, where the Tampa Bay Devil Rays play, is named for Tro;, i, :\1" I Dole Beverages. Similarly,
mun .cipalities are beginning to enter into such sponsorship agreements. Under such al e !;r,' ement, a City facility such as
a ternis complex could be named "Evian Park", and the City would be able to enjoy a ;'e ,ei' ue source from Evian Water.
Similarly, Hawaiian Tropic suntan products could become the official suntan produI ts or South Beach, and would be
distributed exclusively at city concessions on the beach. This could be another strean (f..:venue for the City. Snapple
beverages could become known as the official beverage of Miami Beach. Miami Bee I Ins a certain cache associated
with it, and such products would enjoy that reputation, while Miami Beach would Ie Ie'" t fmancially. The beverage
company or suntan product company would pay a certain percentage of its sales to thl (i~" as well as pay a fixed price
annually to the City for the privilege of being the sole vendor, or for the privilege of b ,i) Ig ;nown as the official product
of th ~ City, or of South Beach.
In the latter part of 2002, Joseph Jay Moore HI was hired by the City of:4 liD' i Beach as its Development
COOldinator. As Development Coordinator, one of Mr. Moore's primary responsibilitic , ;{~I i to assemble and lead a team
of ci:y employees to explore the feasibility, potential, and means by which the City of Ili:n1 i Beach could enter into such
agrel:ments. The committee was made up of various individuals ftom various departmc 111; 1'ithin the City, most of which
wou'd have some !lOrt of tie-in with, or be directly affected by, such corporate sponso's.li~,.. Included among others on
the (ommittee were the Director of Economic Development for the City, an Assistar.!. (: it:' Attomey, the City's Public
InfO! mation Officer, the Director of Parks and Recreation, and the Director of Tourism m II .: :ultural Affairs.
To begin his search for the means by which to bring this new idea to fruition fr r tile City of Miami Beach, Mr.
Moore went onto the internet and searched for various marketing companies which h~;j :><:, n involved in this process in
the ~ ast with other municipalities, and which he could use as sources of information t I !ui ie him in the right direction.
Thrcugh his research, he became aware ofa number offinns whose names kept on rec tr in:!; which were involved in this
type of marketing. These firms included a company called The Superlative Grou] , ]n(. (hereinafter referred to as
Superlative), Public Enterprise Group, and The Wilkinson Group. Superlative, which i I :c, ted in Cleveland, Ohio, has a
prim ipal named Chris Lund. Mr. Moore was contacting people in these companies an, ! I:t': ng the lay of the land, which
he was reporting back to the other members of his committee. He was gathering as mt ~[, it: formation as pos,ible, which
included learning which other cities were engaged in these t}-pes of corporate partnl rs ',iF s, how it was working, how
mucll money they were getting. and how they structured it.
Moore learned that Superlative had been hired as a corporate sponsorship er n;,J]lant by Miami-Dade County.
Moo"e met with Kevin Lindsky, who was his counterpart in Miami-Dade County, '0 It: \l'I1 more about the process.
Moo:e eventually spoke to Chris Lund at Superlative. Similarly, he spoke to individut l~ al Publie Enterprise Group and
The Wilkinson Group. He advised these people that the City of Miami Beach was ir te re:;;ed in learning as much as it
coulel about how corporate sponsorship works in the municipal arena. He advised them tt at :he City officials mayor may
not lltimately get into the business, but that they were trying to learn as much as the:' I 'llt ld so that they could make a
deci! ion as to whether they wanted to move forward with it. Some of the companie~. lie, uding Superlative, agreed to
come' down and put on a presentation to the committee as to their thoughts and what th :) h;l d to offer. According to Mr.
Moo "e, he made it clear to them that they were coming at their own cost and at their 0\ 'n ri; k, as the City might not even
go through with corporate sponsorship in the end.
There are essentially two (2) separate components to the services which a m lJ' ce~: ng firm such as Superlative
prov des to a municipality. The first component is to conduct a marketing asset inVenl,)T i', . vhich is a physical inventory
of th ~ city's assets. This includes what tangible physical buildings the city has, whate'lrt; lOarch it has ill public parks,
what concession stands it has, how many lifeguard towers it has, and the like. This iJ v' :n1, Iry also includes an in-depth
detailed analysis of the square footage of each facility, number of cars that pass by the 'U .ld' ng every day, and how many
people go in and out of a building each day. A price tag is put on everything that has Ie, ,n nventoried, that is, what it is
wort'! for Coca Cola to have their name on a sign in ftont of the Miami Beach :1"H~ntion Center. The second
com!,onent is to take the assets to market, and to find the corporate sponsorships.
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Any contract which the City of Miami Beach enters into in excess of twenty- h (l lousand dollars ($25,000.00)
has'o be bid upon through a formal Request For Proposals (hereinafter RFP) proces:. T'e contract which Superlative
had ~ntered into with Miami-Dade County was for one hundred and eighty thousand ;!lIlJ.m ($180,000.00). It was the
considered opinion of the committee looking into this matter on behalf of the City I f t,fi wi Beach that perhaps they
coul.! just get the ftrst component, the marketing asset inventory, by entering into a p 0 '~~, ;ional services agreement for
undfr twenty-five thousand dollars ($25.000.00). The committee did not think tha III) of the companies would be
willing to do that, but they decided to at least ask. As it turned out, each of the fmns a{ -e; d :0 do such an inventory.
Based upon the presentations made and the information gathered by Mr. Moo e 1111, I given to the committee. the
comnittee wa..~ most comfortable with Superlalive. On March 24, 2003, Chris LUI :i <)1" SuperlaJive e-rnailed to Mr.
Moore a proposed ofter, wherein Superlative agreed to do tbe marketing asset inventoll '))' twenty-four thousand dollars
($24.000.00) plus reimbursables not to exceed nine hundred dollars ($900.00). Sup rdlli Ie, through Chris Lund, was
then fore invited to make a presentation to the City :Manager. In early June of 2003, CI ri i I .md and other representatives
from Superlative then came into town and made such a presentation.
On June 12, 2003, Moore sent an e-mail to Miami Beach Assistant City Manl~11" 'F .obert Middaugh, wherein he
provided him with a copy of the most recent version of the proposed Superlative conl'a:t. On June 23, 2003, Assistant
City Manager Middaugh informed Mr. Moore, via e-mail, that the City Manager wou drat ler bid the entire service Ollt
now as a more all-encompassing RFP rather than just a professional services agreemen f; Ir Ile marketing asset inventory.
Lund was informed of this decision. In his sworn statement rendered to the undersignl j .\!: .istant State Attorney, Miami
Beach Assistant City Manager Robert Middaugh stated that as the City was getting t . 1 he point of deciding to actually
exec Jte a contract with Superlative, it became apparent to the City that there were a I It .)1' other vendors who would be
equally interested in doing the work for the City, and the City did not want to giv ::w perception that Super/alive,
becuse they were going to do the marketing asset inventory, had an advantage ovc' Jw other possible vendors who
wou'd choose to submit proposals for the second piece of the project. Middaugh saidh It (lis way everybody had a fair
chan;e of being selected for the second piece, and that it was for this reason that the :i ty v1anager decided to combine
the entire project into one piece of work in an all-encompassing RFP.
On July 17,2003, Chris Lund e-mailed Moore and asked him for an update )1 tl'e status of the matter. That
same day, Moore responded via e-mail, and advised Lund that he (Moore) believed thl t ht I were "now operating under
the' :one of Silence' which strictly proscribes the nature and extent of penn is sible cor j[ IUllication between me as a City
employee. and a possible bidder on City services in which I have responsibility.,,1 IV)I 'rt: further advised Lund that as
earl) as July 30 an item may be placed before the City Commission which would autb.ri!.e :he City to issue an RFP. He
told Lund that he had submitted the contact information for Superlative, as well as fc r i: ther sponsorship consultants
who:.e work had come to his attention through his research, to the Purchasing Departm, n' , f Id suggested that notification
ofth~ RFP be sent to each when it was ready. Moore told Lund that the City Clerk's llf 'iel (for approved actions of the
City Commission) and the Purchasing Department (for particulars of responding to thet::P I may be the most appropriate
poin's of contact from then on. Lund responded via e-mail that he would proceed w :h all y further communications as
directed. arid stated that he was very excited to compete for the City's business.
On July 30, 2003, the Mayor and the City Commission of the City of Miami E ,~(:h issued a resolution, upon the
recommendation of the administration, authorizing the issuance of a Request For Pro Ie ;ai; (RFP) for the development
and mplementation of a citywide corporate marketing and sponsorship program. C-n;e'luently, on August 20, 2003,
RFP 66-02103 was issued via BidNet, which in turn contacted 72 vendors. Twelve (12: ((II lese vendors downloaded the
RFP package. By the specified due date of September 23, 2003, the Procurement Divis '0 I n ceived eight (8) responses to
the FFP. The eight groups which submitted proposals were as follows:
I. The Superlative Group, Inc.
. . Sports & Sponsorship
I Th'l "Cone of Silence" is embodied in the Miami-Dade County Conflict ofInte: e:': iI nd Code of Ethics
Ordinance at section 2-11.1(t). It is a prohibition on communication between vel ,d :.r; and government staff.
The ~one goes into effect after advertisement oftbe RFP, RFQ or bid. It termina e::. cenerally, when the City
Manager makes his or her written recommendation to the County or City Commi ;s io'
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STATE ATTr SP PROSE
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. :1. The Wilkinson Group
.1. Global BrandlOg Group
:>. Public Enterprise Group
II. Pantheon Intemational, L.L.C.
./ IMG
:1. Envision Consulting Group
On October 17, 2003, the City Manager, via a Letter to the Commission ( . r<:), appointed an Evaluation
Corrmittee consisting of various individuals, including, among others, the Tourism 8J :i Cllltural Development Director,
Mocre (the Parks and Recreation Development Coordinator), and a marketing consl ,It lOt Each of the groups which
submitted proposals was invited to make a fifteen (15) minute presentation to the EVl III Elti, l/I Committee, followed by a
fifte.m (15) minute question and answer session. All of the groups made such a l>I;s.;ntation, except for Envision
Con~:ulting Group, which elected not to make a presentation to the Committee.
During its deliberations after the presentations were made, the Committee unal IiI :ol.sly agreed that the following
four finns should be short-listed and receive fhrther consideration:
Sports & Sponsorship
IMG
.'. The Wilkinson Group
'-. Public Enterprise Group
"
The four (4) fll1lls were ranked in the order in which they are listed above. In e' 'k' ...ing the submissions and the
Committee's recommendation, there were some key questions for which infonnation h ad n,: tbeen provided or for which
inad,:quate material was provided. The City Manager requested that such addition 1.1 if ormation or clarification be
prov:ded by the top four (4) firms.
After receiving the further information and clarification, the Committee reel ,n Ie" ed on April 2. 2004. After
beinl: tully briefed of the Conunittee's recommendation, and after reviewing the prclc :;&1) and additional information
prov,ded by the top four (4) frrms, the City M.anager recommended that IMG be T! nkld as the number one fll1ll.
Com equently, at an April 14, 2004 City Commission meeting, the administration ''8 i lFling to recommend that the
May>r and the City Commission of the City of Miami Beach issue a resolution auth. ri i:in g the administration to enter
into negotiations with IMG, and should the administration not be able to negotiate an al ;rfl :ment with IM:G, authorizing
the administration to negotiate with Sports & Sponsorship.
On April 9, 2004, prior to the April 14, 2004 City Commission meeting, Chris L ;nd, of Superlative, sent a letter
to the City Manager of Miami Beach, wherein he protested the bid result. In order ;0 infestigate the bid protest, the
mattl:r was withdrawn from the Commission Agenda by the city administration, as is 1 ;)( c:. stomwy practice when a bid
prote st is received that requires appropriate research and review.
Lund alleged in his letter that the winning selection was "unduly, and inapprc)\ iall :Iy influenced by an existing
vend:lr" with the City of Miami Beach. He stated in his letter that "officials within c:~ g:lvemment knew of and were
aW8J~ of that influence, and communicated, through telephone conversations and voie 11f., I to Superlative, that adding
this 11articular vendor to the bid would help ensure a wiMing proposal."
The particular vendor to whom Lund was referring was Michael Milberg. ~ lilt erg was cooperative in this
inve:tigation, and in the beginning provided a copy of a series of e-mails that he excha 1~ ed with Assistant City Manager
Middaugh. Milberg eventually came in and voluntarily rendered a sworn statement to 1 III Si:lte Attorney's Office and the
EthilS Commission.
Milberg is the principal of a company call.;:d Miami-Metro Vending Corporatil ,n (hi reinafter MMVC). Through
MM' {C, Milberg had a contract since 1983 to pr'Jvide beverage vending services to h: <: ity of Miami Eeach through
beve-age vending machines at public facilities. Milberg is the Chairman oCthe Boan (rille Miami Beach Chamber of
Commerce, a position he has held for almost three (3) years. Milberg stated that tt leI. gh attending various public
meet lngs and through speaking to various individuals, he heard that the City of Miami. Ie :ci, was looking into the idea of
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. possibly implementing a citywide corporate marketing and sponsorship program. Ear y I)T in the process, way before it
was decided by the City Manager that an RFP would be issued, Milberg learned tJ ,a' t:. e City of Miami Beach was
consulting with Superlative. In his sworn statement rendered to the undersigned Assi:t;: lit )tate Attorney, Miami Beach
Assi ;tant City Manager Robert Middaugh stated that early on in the process Milberg a] IP ;).:: :hed the City with an offer to
try t) structure some sort of a deal with one of the larger soft drink vendors. Accord n;: t: Middaugh, the City decided
that Milberg was not the guy to do it, and that there were other people who could hel;J ir a nore comprehensive fashion.
Mid,laugh said that when nothing came of their conversation with Milberg, that is prot :it Iy Nhen Milberg first learned of
the City's interest in proceeding in a more global fashion. Middaugh stated that as th, ~ ( :it!. moved forward, there was a
lot cf public discussion, meetings, memorandums, and e-mails on the topic, and tha J ,;j, >erg could have learned that
Superlative was a company that was interest~ in working with the City from any ntm:er of these sources. Milberg's
beverage contract, which was a multi-year contract which had been renewed several t m ,:5. had expired in September of
200~. Ever since then the contract has been on a month-to-month basis, although the tf 1m i of the contract provide that
such a month-to-month renewal may not extend for more than six (6) months.
One of the easiest items to be tied into any sort of a comprehensive corporate n a: I;c! ing and sponsorship program
is a Jeverage vending contract. In a sworn statement rendered to the undersigned As .;i: l.sr t State Attorney, Mr. Moore
referred to this as the "lowest hanging fruit," meaning that it was the easiest to tie in. E .~, l~r, ,ge vending services could be
prov:ded by a company such as Pepsi, Coke, Snapp Ie, or any number of beverage co n lall ies. They could become the
official beverage of Miami Beach, and could pay tbe City of Miami Beach a f!Xed mor lb ly.)f yearly fee for the privilege
of b:ing the official beverage. They could also provide vending services and addilio Hi: monthly revenue from such
vend ing services.
Milberg is an astute businessman, and recognized that if the City were to enLr in!") a comprehensive corporate
madeting and sponsorship program, his MMVC contract would probably be rendere I . Ib;:>lete. Accordingly, Milberg
wanted to somehow partner with Super/ative. On August 6.2003, Milberg had luncb VI itl, Miami Beach Assistant City
Manlger Robert Middaugh. They discussed several unrelated matters, and a discuss OJ I I; as also held as to the City's
desue to enter into the comprehensive corporate marketing and sponsorship progralT', a ld the fact that Superlative was
the ~roup that the City was then looking at to assist them.
On August 10, 2003, Milberg sent an e-mail to Assistant City Manager Midda I! II, Nherein he was following up
on tlieir lunch conversation. City Manager Jorge Gonzalez was also sent the e-mail fr :.DJ Milberg. Milberg stated as
follows:
"Thank you for your time. 1 look forward to working with you as we ,r: t,: advance the
City. I thank you for your candor and assurance of responsiveness as VI,~ 1:~() fe forward."
The e-mail from Milberg to Middaugh continues, and Milberg states:
"I have researched Superlative Group via their website and am intere ,:t(.j n contacting
them. Could you forward me a contact person in their Cleveland offi ::e ; have talked
with On board Media with hopes of joint venturing sponsorship effo ts VI th BeachTV
(Channel 19 launch December 151). Also, last Thursday, conver .:a :iCIIs regarding
sponsorships with Boucher Brothers and the Beach Concession took p ':u, ~ with Jorge
and Christina."
Milberg represents Onboard Media. Onboard Media owns BeachTV, which .l I nble channel which provides
relevant programming to hotel rooms on Miami Beach, as well as to residents in the C i~ I ~oucher Brothers are two (2)
othel entities which Milberg representq. Boucher Brothers provides beach conces! ,0 :,$ including beach chairs and
umblellas, and food and beverages at numerous hotels on Miami Beach, as well as on tI e:,ulllic beaches.
The very next day (August 11, 2003), Assistant City Manager Middaugh JI:~ pClIded to Milberg's e-mail as
folIo .vs:
"I have spoken to Jay Moore and asked him to get you the best contacl \' .tl1 Superlative.
If he has not called already, expect it. I do "ot think we can caD th,lt. d,; 't!ctly as the
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STATE ATTY SP PROSE
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RFP is on ti,e j.treet mid wt may Itave cone of silence issun. Jay i ,Js': checking on
that."
Emphasis provided
In fact, the RFP had not been issued yet. On July 30, 2003, the Mayor an. 1 he City Commission issued the
reso ution, authorizing the issuance of the RFP, but the actual RFP was not issuedn:il 4,ugust 20, 2003. However,
base i upon the above e-mail from Middaugh to Milberg, it seems as if Middaugh belie If :I . lat the RFP had already been
issued.
Later on the same day that Middaugh sent the August 11, 2003 e-mail to Milb rj; v' l1erein he stated that the RFP
was already on the street and there may be cone of silence issues, Milberg e-mailed II;] -Opez in Procurement asking
him ;vhen the RPP for sponsorship was going to be issued. Lopez responded via e-ma I 'he the RFP would be issued by
August 13,2003.
On August 12,2003, at 7:14 P.M., Assistant City Manager Middaugh asked Ml O;tl, lia e-mail,
"Did you get the info on superlative to Milberg?"
The next day, August 13, 2003, at 8:08 A.M., Moore responded to Middaugh II! flllc.ws:
"Yes. Left a message on his voicemail the following morning. ..
... Would you like me to call Michael again?"
That same morning, Assistant City Manager Middaugh responded to Moor: '11~: he would like him to call
Milb<lTg again.
The contact information was given to Miiberg. Additionally, Miami Beach I .5 :isnnt City Manager Middaugh
calle i Chris Lund at Superlative and left him a message wherein he told him to exp,ci a telephone call from Michael
Milb:rg. The placing ofrhis telephone call and the message left by Assistant City Man I~ :'r vliddaugh is the central issue
in th.s investigation.
Milberg contacted Superlative, and after speaking with a secretary then spoke tf' (:nr s Lund.
On August 19, 2003, Jay Moore advis~d Middaugh via e-mail that Chris Lund i a.1 I.: ft a message that either he or
his a;sociate planned to visit with Mr. Michael Milberg the following Tuesday.
On September I, 2003, through one of his own companies, Big Dog Ventures, Ir C;., Milberg provided a proposal
in thOl form of a written memorandum to Lund at Superlative. The proposal suggested h It .~ joint venture, or partnership
asSOl iation between various entities, be submitted in response to the RFP on behalf c:' ,;uj: erlative. The entities which
Milb:rg proposed should be involved are The Superlative Group, Onboard Media : ~'OIIcher Brothers Management
Incor porated (BBMI), Boucher Brothers Miami Beach, L.L.C. (BBMB), Big Dog' '" lit:. res, Inc., and Miami-Metro
V encing Corp. (MMVC). Other than Superlative, each ofthese proposed entities are ei h :r represented by Milberg or are
entities in which he is a principal. The fmal line of Milberg's memorandum to ,L lie states that "as represented,
Superlative Group will decide their option of participation with the aforementioned er ti: ie,; by the close of Wednesday,
Septt:mber 3,2003."
Early on in the beginning of the process of Moore researching the feasibility, )0 lm ial, and means by which the
City )f Miami Beach would enter into a citywide corporate marketing and sponsorship 'r' 'g!' lffi, when he was still talking
to Ll nd about having Superlative conduct a marketing asset inventory under a professi If III oervices agreement for under
twen'y-five thousand dollars ($25,000.00), Moore recognized that Lund was knowledl e.:J]u in corporate marketing and
spon::orship rights. TIle City was in a contract with the Boucher group. The Boucher g 1)1.') has the concessions on the
publi~ beaches, renting beach chairs and umbrellas, and selling food and beverages on !tll 'each. The contract between
the Houcher group and the City of Miami Beach was apparently silent on the isst: af who holds certain potential
Page 6
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STATE ATTY SP PROSE
I4J 008
. marl:eting and advertising rights. For example, could the Boucher group then turn art 'u Id md cut a deal with Hawaiian
Trol ic, and be paid a certain amount of money from Hawaiian Tropic to become tilt c ml ia! suntan products of South
Beath, or is this a right that only the City of Miami Beach could sell? While the City )f M ami Beach claims that it held
thesl: rights, the vendor claimed that it held these rights. The vendor was represen1::c :,~. Michael Milberg. Because
Mocre recognized that Lund was knowledgeable in this area, Moore sought Lund's a" v ;:1 in this regard. Moore asked
Luntl what the City should be looking out for. Lund advised Moore that in the future, tJ. n ': :ity of Miami Beach needs to
be carefu~ and not give away any such rights, as they could be a revenue stream for the (it), Moore said that he believed
that the Boucher agreement was coming up for renewal, and that he was considerinE r :c: mmending that the City hire
Supe r/ative on a one-time basis to advise them and to represent their rights in the reneg .tl;;I;,)fi of the Boucher contract.
On Wednesday, September 3, 2003, Chris Lund responded to Milberg's prol 0:;)1 to fonn a joint venture, or a
partIership association with Superlative, as follows:
"Dear Mr. Milberg:
Thank you for sending your proposal to be included in our bid for mln t:ii: aI marketing
services. My colleagues and I spent the better part of yesterday COI si :,e!: ing how and
why each of OnBoard, BBMI, BBMB, Big Dog, and Miami-Metro ,II :ld ing could be
intcgrated into the bid. We certainly recognize the benefit of local iJ IV :h' mlent in our
bid.
We were surprised to see other companies in your proposal besides Or. 110m!. We did
not know that BBMI, BBMB, Big Dog Ventures, and Miami-Metro V :IL iog were all
part of your proposal, as they were never discussed in the conference Cl II
First, from the viewpoint of pure "bid response mechanics", the shear (,i, :' t; Jmplexity of
a six-company bid (the five companies you propose plus Superlative) j; '11I1 of sync with
the size and scope of the very straightforward RFP issued by the Cit) c ~ J, [iami Beach.
A bid with six companies for a project of this size is atypical. 1111e would be
challenging communication issues in the RFP, from the selection comn lil'~'1 s viewpoint,
about each firm's relative benefit.
Second, while the benefits of partnering with OnBoard and its 1;:( ,~!: to a large
advertising inventory across several media platforms are obvious Ill' benefits of
bringing on the other 4 finns are, respectfully, less impactful. In ad. lit 'JII, these firms
create transparency issues, beth in fact and appearance, for liS, partie 11111'1:' in a public
sector competitive bid setting. With the infonnation at hand, we are U 18 [Ii>; to reconcile
your ownershiplbusiness relationship with all these companies (particu ally Big Dog and
MMVC) with the influential position you hold as the Chairman of th:, lloard of the
Chamber of Commerce for the City of Miami Beach. As I mentioned ,/r tJ! ~ conference
caU, the conflict creates (prima facie) an obligation to disclose those I' ,k lic, lShips in the
bid. Superlative is comfortable with conflicts that are disclosed, i" hI relationship
makes sense in tenns of value to the City of Miami Beach. Such Cl ,n'.it;:s do not by
themselves create a problem for us.
However, the totality of all our information on these relationships mus t:: r, :sted against
the mission of the RFP: to be advocates for the City of Miami Beach ii, tie levelopment
and exploitation of its marketing rights. My business background an,l I "CJI ~rience with
conflict-of-interest issues is fairly deep, so I raise these issues from t~ I: "iewpoint of
someone who has dealt with such issues before. It does not make me I n ;'1l1 Jert, but I do
have a framework from which I view these things. To your credit, youla.e :lCCn upfront
about these relationships. I am not in a position to render an opinior a :IC lit what is in
your best interest. I can only view situations from what I believe is in :;& ~'el [ative 's best
interests.
Page 7
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STATE ATTY SP PROSE
I4l 009
In this case, Superlative cannot dismiss these conflicts through a sim,I, ~. sclosure. At
the very least, we feel uncomfortable in a situation where we are like:;' t: I~ ;ake business
recommendations that may not be in our bid partner's best interest. A V ))::t, we run the
risk of misunderstandings with each other. We have never met, 1'111;1 less worked
together. Given all that, it seems to be in both our interests not to be il :, ~"sition where
there (sic) even an appearance that we might be less than rigorous (sic. z :1\. .cates for the
City of Miami Beach. In terms of partnering on this RFP, that is an 11: :ell able position
for Superlative.
Regretfully, we must decline your offer of a partnership with tle;e entities. A
partnership must be comfortable for both parties. We cannot get to a. :x Ill!)rt level, nor
do we wish to expend additional resources trying. So I doubt we V'O Ill! be the ideal
partner for OnBoard, et at. We acknowledge that we may not know e ,e'y act, but with
the response deadline looming, and in respect to both our interests, we Ir: ~ ving you our
answer today, as you requested."
Lund clearly indicated in his response to Milberg that be felt that there was a c.. n :Ii: t-of-interest in at least one of
the J arties being an advocate for the City of Miami Beach in the development and e:p niluion of its marketing rights.
He v'as probably referring to the fact that he had already previously had the discussic m w th Moore about the fact that
whet, the City of Miami Beach renews its contract with the Boucher Group, they De ~d to make sure that they are not
givirg up certain potential marketing and advertising rights to Boucher which Lund '"ei I that the City of Miami Beach
shou ld retain. Superlative, through Lund, would clearly be making a business recomn :1, :In :ion to the City which would
be adverse to the interests of BBNn and BBMB. This could clearly be viewed as a co Ifcl-of-interest be~een not only
the City and BBMI and BBMB, but also between the City and Milberg, who represen i ;lJ! MY and BBMB. Superlative
subrr.itted its response to the Rf'P without any partnership with Onboard Media I!ol.cher Brothers Management
InCOlporated (BBMI), Boucher Brothers Miami Beach, L.L.C. (BBMB), Big Dog Ven:u ';:~. Inc., Miami-Metro Vending
Corp., or Michael Milberg.
On September 19, 2003, IMG submitted its response to the RFP. Included in t Ie "e: ponse is a "Memorandum of
Unde rstanding" between IMG, Boucher Brothers Management, Inc., Boucher Broth:r. ~. jami Beach L.L.C., Miami-
MetD Vending Corporation, and Onboard Media. lMG was ultimately the winning bid Ie'.
When asked in his sworn statement how he ultimately carne to be on lMI,' : f lbmission, Milberg told the
unde:signed Assistant State Attomey that he was given the name by David Whitaker, VI h" i:: the Senior Vice President of
Mar~eting and Tourism for tbe Greater Miami Convention and Visitors Bureau.
The placing of the telephone call to Chris Lund at Superlative and the messa. ',e 'ell by Assistant City Manager
Mide augh that Lund should expect a call from Michael Milberg is the central issue il t I &~ investigation. According to
Chri! Lund, the message was left immediately prior to the Cone of Silence period Ltlld said that in the message
Mide augb stated that since they were still outside the Cone of Silence period, he felt t ,8, it was okay for them to speak.
Lund said that in the message Middaugh stated that he was not telling Superlative 'N la to do, but that it would be
diffie ult to lose the bid if Superlative added Milberg to its proposal.
In his voluntary sworn statement which he gave to the undersigned Assista It St lte Attorney, Assistant City
Manq~er Middaugh admitted that he called Chris Lund at Superlative to let him kne ''I ';0 expect a call from Milberg.
Mide augb stated that he never actuaUy spoke to Lund. He stated that he called Lune a :.::1 left a message for him right
befole the RFP went out to let him know to expect a call that he was going to be gettin!' hlln Michael Milberg, who had
askec for contact information as to who he could speak to at Superlative. Middaugh .t; 1:0:( that the purpose oftbe call
was 10 let Lund know that Milberg would be calling, and what the call was about so h ,: '''oHld understand it. Middaugh
said lhat in the message which he left be advised Lund that the decision as to whether t " 'if Ited to work with Milberg or
not v'as Superlative's. In his sworn statement, Middaugh said that he told Lund in tb:: 7wlsage that they (Superlative)
had t) make the best business decision that they could; that if they worked with Milb. r~, II ,at was fine; and that if they
did n Jt work with him that was fine also. In his sworn statement Middaugh said to the Ulld.! rsigned that he wanted Lund
to unierstand that the City was not pushing Mr. Milberg on him. Middaugh said in hi~ s :<11 ment that he did not believe
that t e said in that message that it would be difficult for Superlative to lose the contract f f.1ilberg was included.
Page 8
10/15/04 FRIll :34 F.H 305 54i Oii2
STATE ATTY SP PROSE
III 010
There is obviously some discrepancy between Mr. Lund's recollection and tie 1'( :ollection of Middaugh as to
wheher or not in the message Middaugh tc Id Lund that it would be difficult for ':u ; ,?' /olive to lose the contract if
Mill erg was included in Supel'/ottve's proposal. In his April 12, 2004 bid protestatiCl1;:lIer, Chris Lund alluded to the
fact :hat he had replayed that voicemail, leading the reader to conclude that the messag' 1 . a' saved, and still ex isted. If in
fact it was saved, it would be very easy to listen to exactly what Middaugh sa,j 'n that message. Based upon
com ersations with Lund, the media has reported that he still had the message. In flc:. ; 1 first speaking to Lund, the
und( rsigned was led to believe that Lund still had the message. Eventually Lund Id nil too that he did not have the
mes! age any longer. According to Lund, the message was left on his cell phone voiclr la' in August of 2003, and was
lost ,y September of 2003. The bid protestation letter, which brought Lund's allegat OllS 10 light, was nol written until
Apri I of 2004, a full seven (7) months after the message was lost.
The undersigned immediately worked closely with Nextel, and made evel ~' nf Jrt to retrieve the message.
Unf( rtunately, Nextel stated that the message was completely irretrievable, as it n l ')11 ger existed anywhere in the
sysl( m.
One could see how, if an individual who was seeking to enter into a business 1'e!:1 i Jnship with a city received a
teleF hone call from an Assistant City Manager telling him to expect a telephone cal i : j'c I n another vendor, this could
easi! y create the impression that the city wants that particular vendor to be included scn ,11,; oW in the proposal. After all,
why else would the Assistant City Manager bother to give Milberg Superlative's contlC: i i' formation at all, or why else
woui d an Assistant City Manager call Chris Lund at Superlalive and tell him to ex~ ," I III call from Milberg? This is
espe.:ially so considering Middaugh had just statL-d, in an e-mail that "I do not think 1I1~ ,[ rm call them directly as the
RFI' is on the street and we may have cone of silence isslles. "
In fact, there was no Cone of Silence issue at that point, as the telephone c 1.11 '11 IS made from Assistant City
Manlger Middaugh to Chris Lund at Superlative on August 13,2003, and the Request I~( r;; roposals was not issued until
AugllSt 20,2003.
The giving of Lund's contact information lit Superlative to Michael Milberg at,) ;le~ placing of the telephone call
from Middaugh to Chris Lund for the purpose of letting Lund know to expect a tele ,t. ,-n,: call from Milberg begs the
ques:ion of whether these efforts would have been made if the party involved was SOIT .~( 1:(: other than Michael Milberg.
Clea'ly, at the time, Milberg felt that it was financially beneficial for him to conta:t SWJerlative for the purpose of
makhg a business partnership proposal. Moore, in his sworn statement rendered t" i11( undersigned Assistant State
Attomey, stated that Michael Milberg is an influential person in the City, and a decisio t-1I2!;er. Moore said that because
Milb~g has business deals with the City, he .....had a relationship with the City tha "o'.ld go beyond would _ _ rise
high(,r than - - that of a normal citizen." Moore stated that Milberg has a high politicll Ire) me in the City and is deeply
inve!ted fmancially in the City.
""'hile there is insufficient evidence upon which to file criminal charges for I)i :-r gging, the Advocate for the
MiiU1li-Dade County Commission on Ethics and Pllblic Trust has been closely consulte [ i hr~ .ughout this investigation for
the r urpose of determining whether there is sufficient evidence upon which to file I n ,~t: ics complaint against either
Assi! tant City Manager Middaugh or Mr. Moore.
Accordingly, the following Miami-Dade County Code of Ethics and Conlli( I.f Interest Ordinances were
considered in this invesligation:
Section 2-11.1 ( 2) Exploitation of official oosition prohibited:
No person included in the terms defined in subsection (b)( 1) tt r'C 1I~ Ii (6)
shall use or attempt to use his official position to seCUI:: :If' :cial
privileges or exemptions for himself or others_
Section 2-11.1 (D) Recommending)rofessional selVices:
Page 9
.l~/15!04 FRI 11:35 FAX 305 547 0772
STATE ATTY SP PROSE
~011
No person included in the terms defined in subsection (b X I) t r: IU:! Ii (6)
may recommend the services of any lawyer or law firm, a :1 Itl~:t or
architectural finn, public relations firm or any other perso. :'T firm,
professional or otherwise to assist in any transaction involving tt II . :ity]
or any of its agencies.
The nature of the allegations raised in this investigation included the possi) illy that Assistant City Manager
Robm Middaugh and/or Joseph Jay Moore ill, Development Coordinator for the ( it, .: f Miami Beach, might have
expl'lited their official positions by intervening on beha1fofMiami-Metro Vending C. CJ '):ation owner Michael Milberg
in hi i attempts to fonn an alliance with the companies responding to the City's RFP 66.): :0: .
Both Middaugh and Moore admit that they contacted Chris Lund at Super!. li.e to let Superlative know that
Mill:erg would be calling them (Superlative). Both men deny telling Superlative 111< I I' Superlative partnered with
Mill:erg it would all but assure that Superlative would be awarded the contract with nl City. They insist that all they
rela} ed to Superlative was the fact that ~fiIberg would be contacting them.
The investigation has revealed that Milberg asked Middaugh for the name of a x IIVct at Superlative. Middaugh
admits that he provided Milberg with the name and number for Chris Lund at Superla ;1':. Middaugh also states that he
telephoned Lund to let him know that Milberg would be calling him.
Since Super/ative no longer has the rec:>rding of the telephone message III, :gdly left by Middaugh, it is
impcssible to know exactly what was said.
Based on the above, the Advocate for the Miami-Dade County Commission 0 I ::ti"ics and Public Trust and the
unde ;signed Assistant State Attorney are of the opinion that there is no conclusive pro< f :L1J: lcient to sustain the filing of
an et lies complaint against either Middaugh or Moore. This inquiry is now closed.
cc: Jose J. Arrojo
Page 10
CITY OF MIAMI BEACH
Office of the City Manager
Letter to Commission No. 098-2004
lD
From:
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez \ ~ ~
City Manager 0 0
SPONSORSHIP RFP AND BID PROTEST
Date: April 29, 2004
To:
Subject:
The purpose of this LTC is to provide you information regarding a request to authorize
negotiations with the recommended vendor in a sponsorship RFP process which was on
the April14lh City Commission meeting agenda. The item was withdrawn due to a timely
bid protest received addressed to me. Subsequently articles were written in the media
regarding the process and erroneous allegations have been made.
Traditionally, I would make every effort to ignore the inflammatory and inaccurate
coverage: however. in the situation where ethics and Integrity are involved, such
allegations can not go unresponded or left uncorrected.
This LTC will review in detail the process that was followed for the entire RFP relative to
sponsorships and identify the different parties involved at each step of the process.
PROCESS
The notion of sponsorships as a revenue generating support mechanism for City programs
and projects was first identified and communicated to the City Commission as part of the
Parks and Recreation Blue Ribbon Citizens Committee Report that was submitted in May
2002. The Blue Ribbon Committee specifically suggested that the City undertake
enhanced efforts to identify corporate opportunities to support Parks and Recreation
programming and City activities.
In subsequent investigation of methods to implement the Blue Ribbon Committee
recommendation, the City learned that a number of communities on a national basis have
undertaken sponsorship opportunities resulting in substantial flows of revenue to the
benefit of those particular communities. Typically those sponsorship opportunities have
taken the fonn of multi-year soft drink endorsements but have also recently included other
national corporations.
In order to focus appropriate attention on this important endeavor and to help implement
the recommendation, the City hired an individual to address this subject and to provide
technical assistance. Mr. Jay Moore was hired on December 16, 2002 to focus on
sponsorship opportunities and to help develop means and methods to assist the Parks and
Recreation Department. In addition to background research associated with national
sponsorship opportunities, Mr. Moore has also been very successful in attracting
advertising to the City's Recreation Review Magazine to the point that most of the costs of
publishing and mailing the document to every household in the community are now
supported by advertising.
The initial efforts of the City to implement a sponsorship program involved national
research into successful undertakings by other municipalities in this particular area. A
number of cities were identified primarily In the state of California that had experienced
success with a sponsorship program. The City obtained contracts from the citles, spoke to
the city personnel and also made contacts with various representatives of the industry in
order to better understand the sponsorship arena and to gather information for a City
program.
As part of the City's early due diligence, it was quickly established that participating In the
national sponsorship arena would require specialized help and assistance in order for the
City to maximize opportunities for success.
The City proceeded to identify a number of national firms that had assisted communities in
some way in national sponsorship programs and contracts. One of the firms contacted was
the Superlative Group. The Superlative Group was under contract to Miami Dade County
for similar work and was also a subsequent bidder in the City's RFP process. The
Superlative Group also filed the bid protest letter that has sparked this particular
discussion.
The City staff reviewed the credentials and experience of the different firms that had been
contacted and made a preliminary determination that the Superlative Group would be able
to assist the City in the development of a sponsorship program. The sponsorship program
was to be two part undertaking with the first part being the development of an asset
inventory by a consulting firm for less than $25,000 and the second part to be a
competitively bid contract to assist the City with a sponsorship program. The approach
was intended to give the City as much information as possible in the first part, before
having to solicit a consultant for the larger contract in the second part. Discussions with
the Superlative Group progressed to the point of discussing potential contract terms for
completing the first part of the work, an asset inventory, to prepare for a formalized RFP
process to follow.
As the discussions with the different consulting groups including the Superlative Group
progressed, it became apparent that there were other potentially interested vendors or
providers of service in the market place that the City might appropriately need to contact or
invite into a process. In addition, it became apparent through research that there was a
potential for a successful company to enter into a contract with the City for consulting
services that could generate over the life of a contract a substantial sum of funds. Given
the interest of other vendors in the market and the dollar amounts prospectively involved in
a contract, the City made the specific and conscious decision to end an informal selection
process for a two part project and move to a more structured and formalized RFP to invite
competitive proposals for a complete package of sponsorship assistance to the City.
2
On July 30, 2003, the City Administration presented to the City Commission a request
to issue an RFP for consulting services to assist with national corporate sponsorship
opportunities. The City Commission unanimously approved the RFP and an RFP was
subsequently issued by the City Administration.
Consistent with the City's RFP practices, a Selection Committee of staff and residents was
appointed and the membership was conveyed to the City Commission for comment in an
LTC dated October 17, 2003. No comment was received from the Commission and the
Selection Committee proceeded to review the RFP proposals.
Eight proposals were received and seven were reviewed by the Selection Committee. One
vendor elected not to present to the Committee. As a result of the Selection committee
review and discussion, Sports and Sponsorship was ranked as the number one vendor and
IMG the second vendor in the ranking process. Both scores and evaluations on the
abilities and credentials of the two firms were ranked very close. The proposal of
Superlative Group was not ranked in the top four proposals by the Committee.
In preparing this item to present to the City Commission, the City Administration
determined that there were several key and important facts that had not been fully
developed as part of the Selection Committee review discussion. As such, a supplemental
questionnaire was sent to the leading four proposers in the RFP Selection Committee
review process. Only the four proposers ranked by the Committee were invited to submit
additional information. This process of requesting additionallnformatlon is not an unusual
part of the procurement process and is used to assure that full information on proposals is
available to the Administration and Commission.
The Administration received the written responses of the leading four vendors. Before
sending the item to Commission for consideration. the original selection Committee was
reconvened and provided the supplemental materials for review and comment. Only four
of the members were available to review the supplement.
The Administration evaluated all of the information available. together with the Selection
Committee discussion and Information to develop a recommendation for the Commission.
As the original materials submitted for review by the selection committee were rather
general, the supplemental questions which were very focused and specific (copy attached)
formed an important basis for a recommendation. Supplemental information on projects
completed for similar entities as the City, details on the project team, and more specifIC and
detaNed Information as to the method of approach to the project were solicited. As a result
of the much more detaHed material submitted by the leading four vendors, it was
determined that IMG had a better overall technical proposal for the City, broader actual
experience In performing sponsorship work and a more experienced project team that had
worked together on a number of projects over a period of years.
A recommendation was forwarded to the City Commission for the April 1411 City
Commission meeting to authorize the City Administration to enter Into contract
negotiations with the flnn IMG.
3
Prior to the April 1411 City Commission meeting, the Administration presented to the
members of the Finance and Citywide Project Committee at its April 6" meeting, a
background discussion item so as to reacquaint the members of the Finance Committee
with the background associated with the sponsorship program and work that had been
completed to date. No action was required or requested and the Finance Committee
recommended that the entire matter be moved to the City Commission for final
determination.
The materials that were submitted to the City Commission for review and consideration
were the Selection Committee review and comments, the Administration's review and
comments and the background proposal information made by each of the two highest
ranked vendors. The only action sought from the City Commission was to authorize
negotiation for a contract.
Prior to the April 14th City Commission meeting, a bid protest letter was received from the
Superlative Group relative to the recommended rankings and the request for authorization
to negotiate a contract. In order to investigate the Superlative Group bid protest, the matter
was withdrawn by the City Administration from the Commission Agenda, as Is the
customary practice when a protest is received that requires appropriate research and
review.
Media Inaccuracies
Specific inaccuracies regarding the previously described process which are contained in
the media coverage and require clarification and correction include the following:
. It has been reoorted that a oreoared contract was included in the aaenda material
and recommended for aDcroval bv the members of City Commission.
, As indicated previously, the material submitted to the City Commission included the
proposals by the two leading firms and the Administration's review relative to those
professional qualifications. While the proposers included desired contract information,
no recommendation was forwarded to the City Commission on a contract. The
Commission Memo indicated that the Finance Committee recommended proceeding
with a negotiation strategy for a contract with the successful firm that relied more
heavily on a commission arrangement for payment of the consulting finn rather than
front end fees. No recommendation on contracts was submitted to the Commission
and no action was requested or required by Commission on contracts.
. Assertions have been made that City offICials were aware of the allooed influence
exerted bv Mr. Michael Milbem to influence the RFP DroceSS.
This statement is factually inaccurate. Mr. Milberg was one of the sponsorship vendors
that was contacted in the early or preliminary stages of due diligence by the City
inasmuch as he had a contract with the City for the vending machines on City
properties. There were no conversations with City officials at any level with Mr. Milberg
once the RFP process had been commenced. No City officials are aware of private
4
conversations which might have been undertaken between Mr. Milberg, the Supel1ative
Group or any other of the vendors in the RFP process. It is factually Inaccurate to say
that City officials at any level were aware of influence alleged to have been asserted by
Mr. Milberg in this process.
. It has been reoorted that the City Administration was asklna the Commission to
aODrove a soecific monthlv retainer and contract arranaement.
The representation is factually inaccurate as the request to the Commission was
specifically to request authorization to negotiate. The Commission Memo specifically
referenced the Finance Committees suggested strategy of contract structure, which
was to have a no front end cost contract and commission reimbursement as a basis for
retaining a finn.
Conclusion
The media attention cleal1y attempts to establish a conspiracy and improper behaviors
where none exist. It is very unfortunate that with the facts that are readily available and
verifiable and public officials who are willing to address such infonnation, that some in the
media would choose to print such Inaccurate and inflammatory coverage relative to a
process undertaken by the City. The process undertaken by the City for a sponsorship
program was intended to be a benefit to the City, and was undertaken with the appropriate
due diligence and research associated with any of the projects which the City pursues. As
most of you know on a personal level, this type of inaccurate and misleading coverage
occurs occasionally in the public sector. It is one of the very great frustrations of the public
sector to be subjected to this type of innuendo with no ability for recourse or a venue to
correctly report facts.
As is customary, upon receipt of the timely bid protest, I immediately referred the matter to
the City Attorney's office and our Procurement Director for appropriate review and action.
Staff had begun to investigate the issues raised and had contacted Supel1ative to seek
greater input and information when they were directed to discontinue their efforts and it Is
my understanding that this matter has since been referred to the State Attomey's office for
investigation. While in this instance, the process has been altered, I assure you that I and
the Administration will cooperate fully with the State Attorney, however they determine to
proceed.
JMG\RCM\sam '
F:\cmgI\SALLIl108IIpansorwhlpllc.dOC
5
~
Superlative
2706 Franklin Blvd
Cleveland, OH 44113
(216)592.9400
April 12, 2004
Mr. Jorge M. Gonzalez
City Manager
City of Miami Beach
1700 Convention Center Drive
Miami Beach, FL 33139
RE: RFP 66-02-03
Dear Mr. Gonzalez:
Pursuant to the fax received by The Superlative Group, Inc. at 4:46pm. on Friday, April 9; 2003 by your
office, (whereby bidders are given 1.5 business days to file a protest), The Superlative Group, Inc. respectfully
submits a protest to the bid result on the grounds the winning selection was (I) unduly, and inappropriately
influenced by an existing vendor, and (2) that officials within city govemment knew of and were aware of that
influence, and communicated, through telephone conversations and voicemail to Superlative, that adding this
particular vendor to the bid would help ensure a winning proposal. As you will see from the note attached that
we sent to the vendor (certified mail), we chose not to honor his request to partner on our bid, because of
several conflicts of interest, both in fact and appearance, after his pursuit of Superlative as a partner.
We also a~sert that a city official told us that we had been awarded the contract for the work contemplated
under the above mentioned RFP in a previous City of Miami Beach competitive bid whereby a city official
notified Superlative that. we were the unanimous choice of a committee of City of Miami Beach staff
specifically assembled to review and recommend a lTIlIIketing consulting fmn. We relied on his assertions
that a meeting - described as a formality - was required and on June 3, 2003 we flew three executives
(including our founder and ~) to Miami Beach to meet the City Manager and some other staff members.
We were then told shortly thereafter that our award had been withdrawn and that a formal competitive bid
was to take place. Shortly thereafter, a city official contacted us to suggest that we talk with a specific existing
vendor. The city official indicated to our frrm that it might be in our best interest to "have a conversation with
the existing vendor" and that he (vendor) was a "very influential person in the commmity". He also directed -
us to another city official concerning the vendor. Subsequently, the city official left me a voicemail
irrurediately prior to the Cone of Silence period, stating that (I) since "we were still outside the Cone of
Silence period, he felt it was okay to speak with us, and (2) that he was not telling us what to do, but it would :,;')
be difficult to lose the bid if we added the vendor to our proposal. ~ehave replayed that voicemail to our_' '.
f:rm' s ~Ili~ I}"!lIIllIgement, and we were all shocked that a city official would communicate such a message. ,. .':,
.,..,
,"""
'",'
All of this appeared very inappropriate to us, gi ven that one city official had already told us (prior to the Cone .,
of Silence Period under RfP 66-02-03) that:
Mr. Jorge M. Gonzalez
April 12, 2004
Page 2
. City of Miami Beach was in a dispute with the vendor in question regarding advertising rights on the
beach, with the vendor claiming that since his concessionslbeverage contract (through a company he
controls/intluences) was silent on the subject of advertising rights, that he was claiming these rights
were his. This city official called me on several occasions to discuss this matter and asked my
advice. I told the city official that if the City of Miami Beach was embarking on a marketing and
sponsorship campaign, that it should rigorously defend its claim for those rights, otherwise the
financial results of any future sponsorship program could be materially and adversely affected. I also
recommended that he immediately bring this to the attention of the City's law office, because there
was so much potential revenue for the City at stake. He then said he was in discussions with staff
about hiring Superlative on an hourly basis just to review this one issue. 1l1at never
happened.
. The existing vendor's firm was in default (words used by the city official) of its existing contract
with the City.
. In contemplation of RFP 66-Q2/03, he had given our name to the vendor. The vendor almost
immediately called our offices seeking to participate in our bid. I asked the vendor about the
advertising rights dispute he was having with the City, and he stated clearly that since the contract
was silent, he (and his legal advisors) felt they were entitled to those rights. He then asked to
participate with us since we had won the previous bid and were in his words "wired to win" the
upcoming RFP. It was clear that his comment was made because he had spoken to City officials
who had told him we had won the recent bid. I had an active conversation with the vendor and
expressed doubts about ajoint bid, given the conflicts. We agreed that he would send a proposal on
how to work together for Superlative's consideration. That proposal is attached, along with
Superlative's response.
The vendor's refusal to acknowledge any conflict of interest as a participant in this RFP should be troubling to
the City. The fact that he is part of the winning bid raises many questions about how this bid was conducted.
The conflict of interest questions, as well as whether any inappropriate conversations took place prior to and
inside the Cone of Silence period are subjects that concern The Superlative Group, given all the facts at our
disposal.
There is one other very key point that needs to be made in relation to the existing vendor's involvement in this
RFP. The growing trend of municipal marketing and sponsorship has caused many City and County
govelTllrents to first look to their beverage vending contract as an initial source of new revenue. San Diego,
New York City, Oakland, California, Miami-Dade County, and many more are recent examples of
tremendous new value being created for public sector entities through rigorous management of beverage
vending/concession rights. Miami Beach's combination of vending and sponsorship rights would make this
an obvious, early priority to bring in money as part of a municipal marketing program. In our conversations in
August of 2003, the vendor stated that he did not think the beverage vending should be apriority, and that he
had done the City a great service over the years through his contract. His statement goes against every trend in
the industry. Further, these trends are well-known to a city official, a selection committee member, through
his own research, and his discussions with Miami-Dade County officials regarding their beverage vending
solicitation efforts. Rather than questioning the vendor's involvement. The city official proactively tried to
get the vendor onto our bid, as did another city official.
We cannot help but consider that the vendor's vested interest in the existing contract (which he has enjoyed
since 1983 according to his correspondence) is a material fact in this bid award process. If the City were to
conduct a competitive bid the likely result is a less favorable outcome for the existing vendor's financial
Mr. Jorge M. Gonzalez
April 12, 2004
Page 3
interests and a more favorable outcome for the City's interests. He desired to bring several other frrms
controlled by him into the Superlative bid raises other important conflict-of-interest questions.
Our position on the matter of a partnership is further reflected in the attached correspondence we sent to the
vendor on September 3, 2003. The vendor made our staff extremely lUIcomfortable with his desire to join our
bid. We felt pressW'e to include him, and that pressW'e was exacerbated by the communications we received
from city officials.
We want to learn whether the vendor had any conversations with any city exocutive during or immediately
after the first award, and whether influence was brought to bear that caused the city to retract its award to
Superlative, and re-award the contract to a bidder who agreed to join with him. The evidence submitted
warrants such investigation.
Based on the facts above, which we assert to be lIUthful to the best of our knowledge, we respectfully request
that the City suspend the award until the matters of this protest are thoroughly and rigorously investigated.
We also respectfully request inunediately under Aorida open records law, copies of all bids, proposals and
evaluation memoranda sunounding the fll'St bid (which Superlative won) and the second bid. We also desire
to learn at what point the vendor in question had discussions with City officials surrounding the bids, the
nature of those discussions, and any memoranda, emails and other documents which shed light upon his
involvement in the process. Further, we request documentation that the response time for protests on this RFP
66-02/03 is consistent with the response time given in other city bids. Such evidence could include
documentation of response times given in the City's last 25 RFP's. We will pay customary copying and
delivery costs incurred for such requests.
Finally, we were told by a city official on April 9, 2004 (after receiving the City's award notice and trying
without success to reach the city manager) that the committee not only rejected our bid, they did not even
evaluate it. This is curious given we had won a previous I?id. It is with healthy and reasonable skepticism that
we inquire about the vendor's influence over this entire process, and the overall criteria used to make the
award.
We reserve all rights and remedies lUIOOr law.
Respectfully subQtted, (\ r
~~~.)
L. Christopher Lund
Vice President Municipal Marketing
LCUcal