THE PUBLIC WORKS DEPARTMENT/FACILITIES MANAGEMENT DIVISION RECOMMENDS APPROVAL OF THE ABOVE MOTION.
On October 20, 2017, the Director of Purchasing approved the open-end contract between Broward County and Eastern Elevator Service, Inc. for Elevator and Escalator Maintenance and Repair (Group 2), Bid No. D2114263B1.
On April 24, 2018 (Item No. 24), the Board of County Commissioners approved the open-end contract between Broward County and Eastern Elevator Service, Inc. for Elevator and Escalator Maintenance and Repair (Group 1), Bid No. D2114263B1.
Eastern Elevator Service, Inc. was required to strictly comply with the insurance requirements of Bid No. D2114263B1, which required that: “Vendor shall provide verification of compliance such as a Certificate of Insurance, or a letter of verification from the Vendor’s insurance agent/broker, which states the ability of the Vendor to meet the requirements upon award. The verification must be submitted within three business days of County’s request. Vendor may be deemed non-responsive for failure to fully comply within stated timeframes. Final award shall be subject to receipt and acceptance by the County of proof of meeting all insurance requirements of the bid.”
On July 12, 2018, the Facilities Management Division received an email from Risk Management Division regarding insurance certificates from Eastern Elevator Service, Inc. for Elevator and Escalator Maintenance and Repair (Group 1 and 2), Bid No. D2114263B1. Risk Management Division stated they received an email from Eastern Elevator Service, Inc.'s insurance agent, Bruening Insurance Agency, Inc., indicating the insurance certificates appeared to contain untruthful or incorrect information (Exhibit 1).
On July 13, 2018, the County served notice to Eastern Elevator Service, Inc. that the County had a reasonable basis to believe Eastern Elevator Service, Inc. had provided insufficient or incorrect insurance certificates in connection with Bid No. D2114263B1 (Group 1 & 2) in violation of the express terms and conditions thereunder (Exhibit 2). Accordingly, Eastern Elevator Service, Inc. was ordered to discontinue all further services until further notice.
On July 19, 2018, County staff sent a certified letter to Eastern Elevator Service, Inc. requesting confirmation, on official letterhead, from Bruening Insurance Agency that Eastern Elevator Service, Inc.’s insurance certificates dated September 21, 2017, and May 11, 2018, for Contract No. D2114263B1 (Group 1 and 2) were valid and in effect on the date of contract award (Exhibit 3).
On July 30, 2018, Bruening Insurance Agency confirmed that the certificate of insurance dated September 21, 2017, was invalid and that only the general liability policy was active through its agency at that time. Bruening Insurance Agency specifically indicated that the other insurance policies listed in the certificate of insurance were not active through Bruening Insurance Agency and that the signature of the “authorized representative” was not an employee or agent of Bruening Insurance Agency (Exhibit 4).
On August 3, 2018, Broward County contacted Eastern Elevator, to confirm that the County was unable to verify that all insurance coverages required per Bid No. D2114263B1 (Group 1 & 2) were valid and in effect on the date of contract award. Purchasing Division specifically requested that Eastern Elevator Service, Inc. explain how the unverified “authorized representative” signatures on the September 21, 2017, and May 11, 2018, insurance certificates, and insurance agency phone numbers, were identical for the different carriers. County staff emphasized that Eastern Elevator Service, Inc. must clarify these discrepancies and provide documentary proof of insurance coverages as required by Bid No. D2114263B1 (Group 1 & 2) (Exhibit 5).
On October 3, 2018, the County formally notified Eastern Elevator Service, Inc. they were being considered for possible suspension and/or debarment. Eastern Elevator Service, Inc. was given a final opportunity to meet with Broward County staff and address the outstanding certificate of insurance issues (Exhibit 6).
On October 18, 2018, Broward County staff met with Eastern Elevator Service, Inc. and their attorney Mr. Rodolfo Mayor, Esq. (who subsequently withdrew from representing Eastern Elevator Service, Inc.) to address the outstanding certificate of insurance issues. During this meeting, Eastern Elevator Service, Inc. specifically agreed to have their insurance providers send directly to Broward County all required insurance documentation proving Eastern Elevator Service, Inc. had all required insurance categories in effect at the time of contract award. Eastern Elevator Service, Inc. agreed to provide all documentation no later than October 30, 2018. The meeting summary, and confirmation of all necessary documentation, was detailed in an email from Purchasing Division to Eastern Elevator Service, Inc. and Mr. Mayor, Esq. sent on October 19, 2018 (Exhibit 7).
On October 25, 2018, Eastern Elevator Service, Inc. provided Broward County with two separate emails concerning 2017 Eastern Elevator Service, Inc. insurance policies and declaration pages. However, these documents did not come directly from Eastern Elevator Service, Inc.’s insurance providers, as agreed to by the parties on October 18th. Rather, they were emailed to Broward County by Eastern Elevator Service, Inc. (Exhibit 8).
On November 8, 2018, Broward County’s Risk Management Division Director carefully reviewed the insurance documentation provided by Eastern Elevator Service, Inc.. Based on this information provided, Broward County’s Risk Management Division Director concluded that Eastern Elevator Service, Inc. did not satisfy the insurance requirements required by Bid No. D2114263B1 (Exhibit 9).
On December 7, 2018, the Director of Purchasing sent a Notice of Suspension to Eastern Elevator Service, Inc. regarding their failure to comply with solicitation and contract requirements for Bid No. D2114263B1. Eastern Elevator Service, Inc. was notified they were being suspended from conducting business with Broward County for a period of up to three months per Section 21.119.a. of the Broward County’s Procurement Code. Eastern Elevator Service, Inc. was further notified they were also being considered for possible debarment (Exhibit 10).
On January 9, 2019, the Director of Purchasing sent formal notice of contract termination to Eastern Elevator Service, Inc. for Contract No. D2114263B1 (Group 2) (Exhibit 11).
The General Conditions, Section 12(b) of Bid/Contract No. D2114263B1, allow Broward County the ability to terminate this contract for cause if Eastern Elevator Service, Inc. is in breach of contract and has not cured the breach within ten days after written notice. Additionally, Section 21.122, of the Broward County Procurement Code (“Termination of Contract”), authorizes the Board of County Commissioners to formally terminate Bid/Contract No. D2114263B1 (Group 1) based upon the Director of Purchasing’s recommendation.
The Director of Purchasing has thoroughly examined the circumstances and reasons behind Eastern Elevator Service, Inc.’s failure to provide adequate proof of insurance in connection with Bid/Contract No. D2114263B1 (Group 1). Given Eastern Elevator Service, Inc.’s failure to cure the breach of contract, despite multiple opportunities to do so, the Director of Purchasing recommends that Bid/Contract No. D2114263B1 (Group 1) be terminated for cause.
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