Two weeks ago today, the D.C. Council passed a sweeping package of taxicab industry reforms. Key to implementing the overhaul is a citywide contract to put “smart meters” — featuring credit card readers and GPS navigation, among other things — in every one of the city’s 6,500 cabs as soon as this fall.
The District has moved forward with that contract, inking a $35 million deal this month with point-of-sale giant VeriFone Systems.
But as is not uncommon with a contract of this magnitude, the losing bidders are not taking their loss lightly. Last week, two competing companies formally protested the District’s decision to go with VeriFone.
The upshot is there could be a delay in upgrading city cabs — perhaps a few weeks, perhaps much longer.
The protesting companies are Creative Mobile Technologies of Long Island City, N.Y., and Alexandria’s RideCharge, a company now branded as Taxi Magic. Both raise concerns about the procurement process and the ranking of bids, saying they were excluded from the final determination, in which VeriFone ended up being the only qualifying competitor.
This, in the words of CMT’s lawyers, “changed the nature of the procurement from a full and open competition to a sole source award.” CMT also notes the curious fact that the D.C. attorney general’s office appears to have reviewed legislation awarding the contract to VeriFone weeks before the company was officially selected. It also is raising questions about why the contract solicitation originally had a local small business subcontracting requirement only to have that requirement later pulled.
RideCharge, for its part, claims the procurement was “fundamentally flawed” because the city “consider[ed] materials and conversations outside the scope” of the solicitation. For instance, RideCharge claims, the city told bidders it could not pass on the meters’ installation cost to cab drivers, then inked a deal with VeriFone doing just that. (The District has since agreed to pick up the installation cost, but not through the VeriFone contract.)
Per standard procedure in bid protests, VeriFone has been halted from proceeding with the contract while the conflict is resolved. The city has 20 days to respond to the protest, then the protester has an additional seven days to rebut. The Contact Appeals Board could then schedule a hearing if there are serious factual disputes. Once the fact-finding process is complete, and assuming it hasn’t already tossed out the protest on procedural grounds, the board will rule on the merits. All told, the process would take anywhere from a month to the better part of a year.
Note that both companies have retained high-powered law firms. CMT has Reed Smith, whose D.C. branch is managed by the ubiquitous power lawyer A. Scott Bolden; RideCharge hired Klores Perry Mitchell, where former Mayor Adrian M. Fenty is now special counsel.
Meanwhile, the mastermind of the “smart meter” — that’s D.C. Taxicab Commission Chairman Ron Linton — says he’s confident VeriFone was the best pick on the merits of both price and technology.
”My attorney says they’re not terribly concerned about” the protests, Linton said Friday. “Right now, they’re telling me, ‘Don’t lose any sleep.’”