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Hernando County schools seek vendor discounts, get confusion

BROOKSVILLE — The idea seemed simple enough.

Faced with the prospect of a growing budget deficit, the Hernando County School Board last month gave superintendent Wayne Alexander permission to try renegotiating contracts with the district's many vendors and contractors.

Alexander didn't promise a lot of savings for the district's nearly $420 million annual budget. Still, he said, if a little bit of money could be saved in buying everything from milk to motor oil, why not try?

But the letter Alexander sent out March 10 has left some vendors scratching their heads, and perhaps even checking with their lawyers.

"There's at least 10 to 15 (contractors) who called to complain," said facilities director Roland "Bo" Bavota, who recently learned his own job is being eliminated. "They said, 'My fear is, if I don't do something in response to this letter, I'll be blackballed and I won't get the work.' "

Other companies told the district they just didn't understand the letter, he said. Were they being asked to cut back on their contracted services with the district, such as reducing the square footage on a new school? Or were they being asked to cut their fee and do the same work for less?

The letter, which was co-signed by board Chairwoman Dianne Bonfield, doesn't say.

"Revenue to run our school system has dropped significantly and the projections for the coming year are even worse," Alexander wrote. "For this reason, we are asking for a 10 percent reduction in your contracted services for the duration of your remaining contract, or as close to that figure as you can get."

Companies that modified their existing contracts "will receive special recognition for their sacrifice in an upcoming Hernando County School Board meeting," he added.

Alexander told the St. Petersburg Times he was not asking businesses to provide fewer services.

"Same service, less expenditure," he said. "I think it doesn't hurt to ask."

Many of the more than 170 recipients of the letter have not yet responded, district officials said.

A few immediately agreed to cut their fees, including Roesch Housemovers of Largo, Fredericks Pressure Cleaning of Crystal River and Charles Bliss Produce of Tampa.

"This is a very confidential arrangement as (suppliers) would normally only offer this reduction to huge chains such as Walmart, Publix, etc.," one company representative wrote.

A few said they received the letter even though they don't currently have contracts with the district.

"We thoroughly enjoyed working with you designing Chocachatti Elementary School and look forward to future work with you," wrote Edward C. Hoffman Jr. of Hoffman Architects in Tarpon Springs. "When that time comes, we will gladly decrease our fee by 10 percent, and more."

Other companies said they simply couldn't afford to renegotiate their contracts.

"When we offer music industry bids to you, we already know how pressed all school districts are in the music department budgets," wrote Robert Goodden, a vice president with Wisconsin-based Interstate Music, which sells instruments and sheet music. "Thus unlike many products you purchase, (we) only have about a 5.5 percent markup — barely enough to cover costs of shipping."

Several local companies told the Times they were afraid to comment on the letter because they would soon be bidding on new contracts for business with the Hernando County schools.

And even those who are offering discounts are presumably finding ways to cut corners or pad their bill to ensure that they earn a profit, Bavota said.

"When (a contractor) does his labor hours, he puts in four more hours of labor," he added. "How do you know if he's working 24 or 28 hours? They need to make a profit, reasonably, or they're not going to be there."

Since compliance is voluntary, the letter itself doesn't appear to violate Florida's public bidding or procurement laws, said Ronald M. Schirtzer, a procurement law attorney and a partner with Foley & Lardner of Orlando.

But there is "potential for this coming back and haunting you" if a vendor loses a bid after declining to participate and decides to sue, he said.

"I've never seen it on a public contract before," Schirtzer added. "The concerns vendors raise about how is this going to affect my (access to) work in the future are legitimate concerns."

Nor had Johnny Richardson, treasurer of the Florida Association of Public Purchasing Officers, ever heard of a school district sending such a letter.

"Once you do that, the vendors that comply, they're going to be looking for something more than recognition," he said.

"I guess they could easily come to that conclusion that (if) they didn't play ball, therefore they're out," Richardson added. "You can always get that impression from something like that. That's why I would not do it."

Tom Marshall can be reached at tmarshall@sptimes.com.

Hernando County schools seek vendor discounts, get confusion 04/11/09 [Last modified: Saturday, April 11, 2009 11:22am]

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