Council has chosen a vendor for a proposed digital kiosk system but not before hearing accusations of wrongdoing from a failed bidder.
City Hall has been debating the Digital Wayfinding and Out-of-Home (OOH) Advertising Kiosk Program for several months that would deploy up to 50 interactive digital advertising kiosks throughout the city with emergency communication capabilities, deliver community messaging, provide public Wi-fi, access the City’s 3-1-1 system, pedestrians counters, photo booth functions and advertising.
BIG Outdoor received the contract after promising the city $9 million in the first year due to a combined signing bonus and revenue split. The company is expecting minimum payments to the city to be $5 million per year once the company installs 25 kiosks but gross revenues could be about $14 million annually over the 20 year agreement assuming all 50 kiosks are installed.
Six companies participated in the process with BIG Outdoor and IKE Smart City making the final cut. Both were asked to submit a “best and final” offer with staff recommending BIG due to more community benefits and higher revenue projections.
In response, IKE sent a protest letter to the city claiming BIG lacked experience in the field, had infringed on intellectual property and that city staff had shown inappropriate favoritism to BIG.
BIG strongly rejected those notions at the meeting as did city staff.
“The many accusations and complaints about the process lack factual support, do not accurately reflect the law and the RFP itself,” said Santa Monica City Attorney Doug Sloan. “Some of the accusations may even amount to defamation.”
He said they city had followed all processes and that IKE had attempted to circumvent the process by altering its “best and final” proposal after seeing the submission from its competitor.
While some councilmembers initially asked for the evaluation process to be restarted using elements of BIG’s as the baseline, others said doing so would be ethically unsound and reflect poorly on the City.
Mayor Gleam Davis said restarting the process would establish a precedent for any company to expect a new process after submitting their “best and final” offers if they realized they had been outbid.
“And that really undermines the city’s reputation as being sort of an honest broker in these things,” she said.
Davis also criticized IKE for attacking city staff.
“And I do want to emphasize and I don’t know any other way to say this, so I apologize for my bluntness, I think the attack on staff was unconscionable.”
Councilman Oscar de la Torre said BIG’s package had substantial benefits over IKE’s and also said the evaluation process had been conducted appropriately. He said a new process wouldn’t be appropriate.
“It will just complicate it and will politicize the whole process in a way that I think would be unhealthy for us as a city government,” he said.
Councilmembers Phil Brock and Caroline Torosis ultimately voted against the motion. Torosis said she thought IKE had the better product.
“And I think if you look at the first round of the RFP process, but for the revenue projections and profit sharing, IKE had a better product, period. I had the opportunity to personally interact with both products and IKE has a better product that has been more built out,” she said.
Brock said many residents are adamantly opposed to this kind of advertising product so he wasn’t as concerned with the promise of higher revenues from BIG if the final product wasn’t the best it could be.
“I’m just convinced that the residents of the city will benefit more with IKE Smart City than they will with BIG Outdoor and BIG Outdoor has more chances in the city because they’re going to come to us, along with Santa Monica Place, and try and put huge Time Square billboards on the side of Santa Monica Place. So I think that if our residents see something on Montana Avenue or by the Pier or on the Promenade, they’re going to want to make sure that it actually benefits them as well as taking some of the burden off them to pay for services in the city.”
While BIG did receive the contract, opponents said the decision could be delayed if critics were to file a voter referendum to overturn the Council’s decision.