Chicago Cancels Contract For City Sticker Vendor
EXCLUSIVE: Un-Sticky Situation Seals Decal Printer’s Fate
Perhaps it was the over 77,000 Chicago city stickers peeling off car windshields which had to be replaced.
Or maybe it was the fact the decal vendor couldn’t guarantee their product would actually do what it was supposed to do–stick to windshields.
Or possibly it was the quality control error may have cost the city millions of dollars in parking ticket revenue.
Most likely it was for all of the above reasons that compelled Chicago Department of Procurement Services, nearly five months after the problem surfaced, to finally pull the plug on the nearly million dollar, five year contract with SecureMark Decal Company.
The city officially terminated the contract, just months into the first year of the agreement, the last week of October according to Shannon Andrews from the city’s Department of Procurement Services.
“The City provided the vendor with written notice of the contract termination,” said Andrews via e-mail. “The contract is terminated and all work, deliveries and orders ceased.”
City Clerk spokesperson Kristine Williams is one person happy with the move.
“Obviously, we’re glad the contract was terminated,” said Williams. “It was a process we worked closely on with Procurement and we’re glad that it did get terminated. We can’t have a repeat of last year–we just can’t. No one in Chicago deserves that.”
Of course, SecureMark’s Chief Operating Officer Fabio Tremolada was disappointed by the city’s decision.
“The main thought I can share is we acknowledged the problem with the stickers and really feel we’ve done everything possible in the shortest time,” Tremolada said. “We never interrupted the supply (of stickers) and acted as a good partner with the city. I understand the position of the city and understand they have pressure on them and hope they acknowledge the efforts we have (contributed).”
Tremolada explained the problem was with their firm’s subcontractor which was responsible for applying the adhesive to the back of the decals which SecureMark printed.
Problem May Have Cost City Millions
The problem first surfaced in early June when the City Clerk’s office began getting reports of city vehicle stickers that wouldn’t stick. While both the Clerk’s office and the vendor acted rapidly to replace the initial batch of flawed decals, the problem continued to grow with over 77,000, or 6.5% of the nearly 1.3 million city stickers issued eventually being replaced.
Because of the problem, the City Clerk’s office made the unprecedented move of extending the traditional 15 day grace period between July 1st and July 15th an additional 15 days until July 30th. While this extension gave Chicago motorists with un-sticky stickers time to replace their defective decals, the extension had the unintended consequence of reducing the window of enforcement for city sticker violations. This expensive ticket costs sticker scofflaws $120, but accounts for millions of dollars of revenue for the cash strapped city.
In addition, the City Clerk’s office incurred unexpected overtime labor costs and caused a major disruption to departmental operations. For example, according to Williams, the Clerk’s office had to reshuffle manpower with six to seven people answering e-mails instead of the typical single person and some personnel within the department are completing work now they should have completed back in August.
“If this had not occurred we would have had a near perfect sticker sales this year,” said Williams.
City May Go After Vendor For Financial Losses
But according to Andrews, the city does have the right to recover any costs and expenses which results from a default on the part of a vendor.
“If a default on the part of the vendor results in lost revenue or additional cost, the city will seek any and all remedies available to it,” said Andrews.
But whether the city actually is serious about invoking this right is another question.
The procurement department has been paying SecureMark for its work and thus far, according to the city’s Vendor, Contract and Payment Information website, the firm has been paid a total of $235,845.47 in two payments this year. The most recent payment of $87,713.27 was made on October 13th, just two weeks before the termination letter was sent.
And when asked directly if the city would pursue SecureMark for any costs or lost revenues as a result of their default, Andrews responded stating, “as a policy, the city does not wish to discuss its recovery strategy in advance of implementation.”
Decal Company Plans To Bid Again
In the meantime, Procurement is preparing a new bid for Chicago’s city vehicle stickers, which will be advertised in the near future–a bid SecureMark, despite this year’s problems, still holds out hope it can win a second time.
“It’s not up to us, it’s up to the city,” says Tremolada explaining he harbors no hard feelings for the City of Chicago. “If the city will allow us to compete we will be there. We would still like to be considered as a very good vendor and we ‘d be very honored to work for the city.”