Tuesday, August 4, 2015

Contracts and Facts

The other day when I was talking about CB 17, Nutritional Standards, and vending machines, this question came up in the comments section:

Serious question, related to this topic. On last night's 10 pm news, Channel 45 had a story on this topic. The reporter made an interesting assertion: the current contract between the county and the vending machine operator extends through 2019. This bill can't force a change in what the vending operator does until that contract expires, unless the county wants to unilaterally break the contract, to its detriment. So this bill won't impact those vending machines for four years, by which time a majority of the County Council will be gone due to term limits.

I had never heard that asserted before. Is there anyone out there who knows whether it's true? Because if it's the case that this bill really won't impact anything for four years, this truly becomes a lot of sound and fury, signifying nothing.

On the other hand, if it was just another case of shoddy reporting by the local media, then I'll don my "complete shock" look again. :-)

I didn't have the answer so I went to work to find out. I started by writing to my County Councilman, Dr. Calvin Ball. I received his reply last night and it is so thorough that I asked permission to share it in its entirety.


Thank you so much for your patience as I awaited the guidance from of our Office of Law so I could ensure accuracy. I’m happy to share some additional information regarding the status of the County’s contract with Black Tie Services LLP, our vending contractor, as well as the impact it may have on implementing CB17.

The contract went into effect on October 1, 2014 and will expire on September 30, 2015 (“Initial Term”). The County has the option to renew for four (4) additional one-year terms, unless sooner terminated. It’s been alleged by Channel 45 and others that the County cannot implement CB17 until 2019. It is true this is timeframe when the County would complete all terms under the contract; however, it is not the only opportunity the Administration would have to implement the nutritional standards.

The County would have at least two additional opportunities to implement CB17. First, the Administration may amend the contract to implement the nutritional standards under CB17. This would require consent from Black Tie Services LLP. Second, the County may terminate the Agreement for convenience and can do so without showing cause so long as we provide at least 30 days written notice to our Contractor.

I understand the comment from your blog stated the bill couldn’t force a change in how our vending operator conducts its business unless the County unilaterally cancels the contact, to our detriment. I’m unclear what is meant when they say “to our detriment”. This is not the first time under this Administration the County would have unilaterally cancelled a contract. In fact in April 2015, the Administration unilaterally cancelled our contact with the vendor of our café, Auction Café, in the George Howard Building. This contract was not scheduled to end until 7/31/15 and had 11 renewals remaining. Auction Café prepared and made available a variety of meals (breakfast, lunch, snacks) and beverages, healthy and otherwise which accommodated our County employees including the County Executive’s office, County Council and majority of County agency employees as well as visitors entering our main government building.

This was one of the catalysts for introducing CB17. Without the freedom or opportunity to order a healthy meal, snack or beverage, our employees and visitors are now left to select from the items remaining in our vending machines. The Administration emailed they would be exploring other alternatives, however none have been offered nor an explanation provided for cancelling the contract. It is likely this has lost revenue for the business, jobs for its employees and commission to the County. However, as it relates to this specific contract, CB17 and the nutritional standards, commissions would still be required to be paid to the County from the Contactor through the termination date. Furthermore, the County could then submit an RFP for a vending contractor that would implement the nutritional standards.

It would never be my intent for the County to terminate a contract or for a business to lose revenue. The terms of our agreement give us flexibility, in fact, to negotiate and amend the terms to implement the nutritional standards. Of course, that does require consent from our Contractor. If the Contractor is not willing to negotiate, we are still approximately 60 days from when the contract is scheduled to expire. We are required to give 30 days written notice if it would be our intent to cancel our current contract, which is the other alternative for the County implementing the nutritional standards.

As you can see, our Contactor would be afforded the option to amend the contract without its losing its business with the County and CB17 can be implemented if the Administration is willing to act. However, the Council does not have purview over negotiating or implementing contracts with our vendors. This is an Executive function.

I hope this answers your questions.

That's a lot to digest. I'll delve into this tomorrow.

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