Probe into Vero electric contract may be focusing on bid rigging

VERO BEACH — State Attorney Bruce Colton may be looking into possible bid-rigging as part of a grand jury inquiry into the Vero Beach electric contract with the Orlando Utilities Commission, public records show.

Our sister publication, Vero Beach 32963,  has confirmed that  Florida Power & Light, which was ranked second in the bid process, has been contacted by investigators about the bidding procedure and is cooperating with the probe. 

“FPL was contacted by the State Attorney’s investigator,” said FPL spokesperson Jackie Anderson.  “He recently met with a few of our employees and asked general questions regarding our involvement as a bidder.” Email correspondence between City of Vero Beach officials and investigators show the State Attorney’s office requested from Sue Hersey, the city’s out-of-state electric consultant, copies of several documents related to the process by which the city selected the OUC over FPL to become the power provider to its 33,000 customers as of Jan. 1.

Assistant State Attorney Chris Taylor would not comment on the content of the emails, or whether the scope of the investigation had expanded to include the bid process by which OUC was chosen over Florida Power & Light.

As part of the probe, investigator Edward W. Arens was sent via email a copy of the final bid instructions and draft bid documents for the bid request issued by Vero Beach through Hersey’s Boston office.

Arens also asked for a copy of the electronic presentation Hersey gave to the City Council this past Nov. 16th about electric issues. The Nov. 16 Powerpoint  presentation incorporated information which was given to each member of the City Council on April 7, 2008 during individual meetings in City Manager Jim Gabbard’s  office with Electric Utility Director R.B. Sloan, City Attorney Charles Vitunac and Hersey.

On the same date that Arens made his requests of Hersey, Gabbard received from Hersey a requested copy of a market study done by Hersey in 2003. The survey targeted 12 regional power providers – but not OUC – to be polled regarding their interest in doing business with the City of Vero Beach Electric Utility, as well as their interest in possibly purchasing the power plant and/or the transmission and distribution assets of the city.

What is unclear is why those documents were not already in the city’s possession since by law, the city is the record keeper of such documents. Hersey in April, May, June and July 2007 mailed out the bid packets, answered correspondence and collected bid submissions from her home office in Massachusetts.

It appears from charges on Hersey’s invoices for numerous postage expenses for mailing out bid packets and instructions that the city’s purchasing office did not directly handle the bid documents but instead paid Hersey nearly $300 an hour to do so, presumably to keep the documents out of the Vero Beach City Hall and hence out of the public record.

Neither Hersey nor City Attorney Charles Vitunac responded to questions about where the documents had been archived and why the city did not have copies.

The bid evaluation process, for reasons never made clear, was handled in Boston with Sloan and Vitunac flying up for a meeting on March 17, 2008 to “review bid modeling,” as detailed in an invoice.

Bidders were ranked by some as yet undisclosed criteria, and OUC was declared the winner over FPL – even though electric customers’ rates are expected to be 27 to 35 percent higher than FPL after OUC takes over in January.

South Beach resident Dr. Stephen Faherty and a proponent of selling the utility to FP&L has special insight into the bid process after he mistakenly received an email by Vitunac on the subject. He contends that FPL was not given a fair shake.

“When you set FPL as the standard and evaluate all the other bidders in relation to FPL, how can FPL win?” Faherty said. “They should have used FMPA as the standard because that’s the provider we currently have and evaluated all the bidders in relation to FMPA. FPL would have scored higher, maybe higher than OUC.”

 

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