“Unsatisfactory” Answers About Bid Process and Potential Conflicts of Interest Prompt Audit; Thompson Requests Delay of Franchise Hearing Pending Outcome

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New York City Comptroller William C. Thompson, Jr. today directed his staff to audit the process that led to the selection of Snapple as the Department of Education’s (DoE) exclusive beverage vendor after receiving contradictory and incomplete information about the deal from both the DoE and the City’s Corporation Counsel.

In a letter advising Mayor Michael A. Bloomberg of the audit, Thompson stated that both the DoE and Corporation Counsel Michael Cardozo failed to dispel concerns about whether the process was open and fair, as well as whether potential conflict of interest issues were thoroughly explored. Thompson has made numerous attempts to clarify these issues, including conducting a meeting late last month with Cardozo and members of his staff.

Mayor Bloomberg and Schools Chancellor Joel Klein announced last September that Snapple had been selected as the exclusive beverage vendor for the New York City public school system and, as such, would serve as the exclusive vendor for the City of New York.

“The marketing program your administration is embarking on is innovative and has the potential to bring much needed revenues to the City of New York,” Thompson wrote. “The answers I have received have proven unsatisfactory. The public, vendors and elected officials must be confident that agreements are awarded fairly and without the taint that now surrounds the Department of Education and citywide agreements. These two contracts are the City's first venture into sponsorship and marketing and must be above reproach.”

Last month, Thompson recommended the DoE and the New York City Marketing Development Corporation cancel both deals because there were so many outstanding questions about how Snapple was selected and because issues regarding potential conflicts of interest were dismissed without adequate explanation by the Corporation Counsel.

“As the City seeks to enter into other marketing arrangements, we need to make sure that there is open and fair competition, and that the end result is the best possible deal for New York,” Thompson said.

In the letter, Thompson also asks Mayor Bloomberg to delay review of the Snapple agreement with the City by the Franchise and Concession Review Committee (FCRC) until the audit is completed. The FCRC is scheduled to hold a hearing on the Citywide agreement on December 8 and vote on the matter on December 10.

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