West Palm awards a no-bid contract worth up to $7.9 million to a security firm whose regional director is drinking buddies with top city officials. Competitor cries foul, promises investigation.

WEST PALM BEACH -- City commissioners Monday night awarded a no-bid, multimillion-dollar security contract to a firm whose regional chief socializes with the mayor, city manager, police chief and deputy chief and a city commissioner. All of those city officials played a role in the outcome.

The board voted unanimously to award Professional Security Consultants (PSC) a three-year contract, with an option for an additional two years, for a total that could mount as high as $7.9 million.

Caught by surprise, competitors cried foul, saying the decision to forgo bidding would cost the city a chance at a better, less expensive deal, deny minority-owned firm participation and unnecessarily limit the work to one company.

The firm that would be bumped from its hold on the guard contract for West Palm’s Northwood district, Giddens Security, filed a public information request seeking copies of emails between PSC and city officials, seeking evidence of favoritism. Calling the contract illegal, Giddens on Friday afternoon filed for a circuit court injunction to stop it from taking effect Oct. 1.

PSC won praise for its yellow-shirted “security ambassador” work for the Downtown Development Authority and for its prior work in the North End. It also handles security for privately held Rosemary Square, the former CityPlace, owned by The Related Cos.

More importantly, city officials stressed, for public safety it was best to have just one firm handle security guard service citywide, to allow seamless communication and intelligence-sharing between police and guards and avoid confusion. Since PSC already has contracts for Clematis Street and Rosemary Square, and has done a good job, it only made sense to have them in the rest of the city as well, City Administrator Jeff Green said.

Mayor said social interactions don’t influence preferences

"Professional Security Consultants has the resources, is qualified and already services multiple areas in our city," Mayor Keith James said Thursday in an emailed response to The Palm Beach Post.

"Prior social or campaign interactions do not influence preferences or procedures in any city decisions. This contract is allowed, makes sense and can be terminated at any time if our needs are not being properly met."

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Twelve firms wanted to compete for all or part of the proposed contract, which includes responsibility for city hall, the downtown library, public garages, parks, youth empowerment centers, Northwood, and water and wastewater plants.

However, shortly after James took office in April, he threw out the solicitation process already in motion and the city told participants they would be notified when it resumed. But it never did. Competitors found out days ago, some only when they saw it on the commission agenda, that there would be no bidding.

Firm’s official and city officials frequent Blue Martini in Rosemary Square

PSC’s Senior Regional Director Wilfredo "Willie" Perez-Borroto, declined comment for this article.

Perez is a former Miami police officer who was ousted in a contentious firing in 1997. He later served as bodyguard for former West Palm Beach Mayor (now U.S. Rep.) Lois Frankel. He has done security work in West Palm for about a dozen years.

Known to frequent the Blue Martini bar at Rosemary Square, he is sometimes joined there by Green, new Police Chief Frank Adderley, Deputy Chief Rick Morris, Mayor James and City Commissioner Joe Peduzzi.

Peduzzi, a former cop, said that he’d sometimes spend an hour or two at lunchtime smoking cigars with Perez. "I know him pretty well. I’m not going to say I don’t."

Regardless of the relationship, Peduzzi said, it made sense to have one firm handle guard assignments.

"What I notice in city hall is, in the elevators if you need security assistance, inside the building, it’s one number, for Giddens, and outside the building it’s PSC," he said. "It’s probably a good idea we have that consistency ... when it comes to security."

City manager says they don’t play favorites

Likewise, asked about the optics of awarding a no-bid, multimillion-dollar contract to a drinking buddy, Green replied: "There are friends all over the city. Personal relationships, business relationships, relationships that try and move the city forward in a good direction.

"We have social relationships with a lot of people. That doesn’t mean we’re playing favorites."

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Green added that he and his staff merely recommend; the commission decides. But after Mayor James took office, his public safety liaison, Greg Key, and other city staff spent a lot of time studying how to improve security, a top priority, and having the one firm handle it was the best way, Green said.

A city can’t afford to hire all the police officers it would like, so it needs security guards to add feet on the street, he said. That works best if everyone’s on the same page, he said.

PSC also won a no-bid contract in Fort Lauderdale in 2014

Chief Adderley agreed. He didn’t recommend one firm or another, but advised that having one company communicating with police would be better than multiple companies, he said.

"I can’t really speak about the optics. I’m not the person who drove the bus," Adderley said.

Adderley’s familiarity with PSC dates to his days as police chief in Fort Lauderdale, where PSC also won a no-bid contract with that city’s Downtown Development Authority in 2014. That decision followed recommendations from U.S. Rep. Frankel and West Palm’s DDA director, Raphael Clemente.

Clemente initiated West Palm’s security ambassador program in 2006. The program hires guards as downtown "ambassadors" to establish a visible security presence that bolsters police efforts to control crime and vagrancy in the heavily visited commercial area. The service worked best when PSC was assigned to city hall as well as to Clematis Street, Clemente said.

"The program worked unquestionably the best when everything was under one umbrella. That’s particularly important, in my opinion, because of the absolute necessity of a close working relationship with the police department."

Businesses in Northwood applaud PSC’s work

Also supportive of the one-firm approach: The Northwood Village Merchants Association.

The shopkeepers, in Northwood as on Clematis Street, want guards to be more forceful in getting vagrants to move on, Will Davis, president of the association said. The feeling is, having one person reporting to the police department creates more of a sense of responsibility.

What’s more, some longtime business owners remember when PSC had the Northwood contract and did a good job, Davis said. "We’ve been fighting for over a year to improve security."

North End Commissioner Kelly Shoaf concurred, calling security a specialized service that requires "a firm that knows the issues that are specific to West Palm Beach."

Giddens officials said they’d never had a bad review or complaint from the city. They noted that, because of budget restraints, the city or its Community Redevelopment Agency had them reduce their coverage in Northwood to having one person on duty around the clock, from two on weekdays and three on weekends.

They urged the board to table the vote, to allow time to investigate how requests for competing proposals came to be canceled in April.

Competing firm said it could have done job for $780K less

The morning after the commission meeting, Giddens lawyers submitted a public records request for emails among city and PSC officials that might shed light on why the administration gave up on competitive bidding. CFO Adam Giddens said he planned to file court motions to halt the award pending a challenge.

Giddens proposed to do the job for $780,000 less than PSC, Giddens attorney Geoffrey Smith, told the board Monday night.

"Let’s take a minute, two weeks. Let’s gather the facts. Why was there a request for proposals put out to competitively solicit, then withdrawn instead of multiple vendors submitting competitive bids?" he asked.

"We have competitive bidding and competitive procurement laws for good reason: to ensure the integrity of the process, to avoid the appearance of bias, collusion. ... We have gotten information that there are issues with potential favoritism. We think it’s serious and it merits at least a pause, to think about what you’re doing."

Some say the decision undercuts efforts to reduce racism in contracting

The decision, especially on such a big contract, undercuts years of efforts to reduce racism in West Palm Beach city contracting, said Elvin Dowling, who advocated for the city disparity study that confirmed bias and led to the city’s creation of a Minority and Women Business Enterprise program.

"Historically, minority contractors have been shut out consistently for contracts. You’re either going to follow the rules or not," Dowling said.

"I know at least two other contractors that put in bids for Northwood and the city paused the contract, then rolled this into something else and didn’t tell these contractors who had responded and were licensed, certified, bonded, ready to go. And they gave a no-bid contract to a guy who’s the mayor’s friend. There’s something wrong here," he said. Lia Gaines, executive director for the Center for Enterprise Opportunity in West Palm Beach, helped a company apply for the Northwood security work the city solicited, only to see the opportunity eliminated.

"There was not even an opportunity for my client to be heard," she said. "They just set a Minority Business Enterprise policy. This sets a very bad precedent."

The firm she assisted, Chameleon Security Group, on Thursday wrote to the mayor and commissioners, urging them to reconsider.

"The process is patently unfair and should be rectified and remediated," Chameleon owner Ansel Graham-Record said. "Seamless security services can be accomplished via an open, transparent and competitive process."

During his eight years as a city commissioner, Mayor James, who is African-American, often quizzed contract applicants to ascertain how they planned to create opportunities for minorities and minority-owned firms. He participated in meetings on the disparity study.

One of his first high-level hires as mayor, Adderley, also is black.

The PSC contract, however, includes no minority requirement. Asked about that, City Administrator Green said a number of PSC’s security ambassadors are minorities.

City attorney says city can bypass competitive bidding

City Attorney Kimberly Rothenburg said in an email Thursday that city law gives it the authority to bypass competitive bidding requirements if need be.

Gaines, however, and an attorney for Giddens Security, disagreed with the city interpretation. Several qualified companies that want the work are available, and there’s no emergency that would justify a no-bid contract, they said.

Time is running down for any reconsideration vote, as there are no regular commission meetings scheduled before the contract begins. Scheduling a special meeting would require the mayor to do so, or at least two commissioners to rescind their Monday votes.

Two commissioners would need to rescind votes to set a special meeting

Reached this week, commissioners Cory Neering and Richard Ryles said they’ve fielded complaints and are considering it.

Neering made it clear Monday he wasn’t comfortable scrapping bids on a contract so large but would go along with it on the basis of the mayor’s repeated pledges to make public safety a priority, and because the voters had supported James.

As of Thursday afternoon, however, Neering was on the fence. He said he was troubled that bidders like Chameleon weren’t notified. He hadn’t known about the officials’ friendships with Perez, he said.

"I would have done it differently, just out of an abundance of caution," Neering said.

"We’re accountable to the residents and we have to be as transparent and open as possible and we don’t want to do anything to compromise that."

Ryles said that if the Giddens’ public record request turns up anything untoward, "I’ll be the first one to vote to undo the contract."

He didn’t have information that would cause him to oppose the measure Monday, he said.

"I’m not part of that drinking cabal," he said, but added that relationships in a small town are not necessarily nefarious, whether they come about through a fraternal organization, church or anything else.

"What I have tried to do is work as closely with the mayor as possible, to give him the tools he needs to provide the best job to the city," Ryles said.

For his part, Mayor James admits that he’s betting a lot that the decision is the right one.

"This a big contract,” he told commissioners before they voted. “Public safety is a big deal.”

"I am convinced that this company can work well with our police department ...," he said.

"That, to me, is extremely important, to have that collaboration and cooperation so that our citizens can be best served ... let’s get the right team in place. And yes I’m to some degree staking my political future on this decision but I feel very confident."

After the vote, standing out in the vestibule, business owner Darrell Giddens appeared stunned. In 47 years in the security business, he said, "I’ve never seen this happen."

tdoris@pbpost.com

@TonyDorisPBP