2 companies that lost out in bidding for new ‘smart’ parking system call Laguna Beach’s selection process unfair

Two disgruntled companies have sent protest letters to the city of Laguna Beach contending they were treated unfairly during the city’s recent bidding for a new “smart” parking guidance system.

The chief executives of Indect and Fybr, companies that specialize in parking sensor technology, expressed concerns that the city didn’t follow due process when putting out a request for proposals in December or when deciding the winning bidder, New Zealand-based Frogparking.

Both companies requested that the city start over with the RFP process.

“We didn’t get an interview, none of our references were [contacted] and we were significantly cheaper. … It was a bit unusual,” said Indect CEO Dale Fowler. “To my mind, it sounds like they had already made a decision before they went out to bid.”

In a 4-0 vote April 2, the City Council approved appropriating nearly $1.3 million to roll out Frogparking’s sensors at every city-owned parking space. The system would include a phone app to allow drivers to search for available parking before getting in their cars. The app also would enable drivers to pay parking meters through their phones.

Fowler sent a letter dated April 15 asking the city to reconsider awarding the bid to Frogparking. He alleged the city did not contact any of Indect’s references during the vetting process. He also said he found out about losing the bidding from a news article online.

Fowler said Indect integrated Frogparking’s product into its system but the sensors ultimately had to be removed because they worked poorly.

Frogparking’s executive salesman Grant Johnson said Frogparking and Indect are still involved in some of the same projects, including at a Walnut Creek shopping mall and in Beverly Hills.

“We’ve lost proposals … in the past and we don’t protest,” Johnson said. “This is part of the American capitalist system, and I think the results of this whole project will speak for themselves.”

Fowler said in an interview that Indect’s bid was nearly $150,000 cheaper than Frogparking’s and included a lifetime maintenance warranty.

“I’ve never protested anything before, because part of me is like, ‘Ah, well … good for him,’” Fowler said. “But being a city, that makes me a little bit [concerned], especially when there’s a big difference in the price compared to what was reported. … We weren’t given an opportunity. We put in a bid that was 15% or 20% cheaper than these guys and we didn’t even get a look in. That just seems odd to me.”

City Attorney Robert Owen wrote in a response letter, which Fowler gave to the Daily Pilot, that official notification would be sent once the contract with Frogparking was finalized. Owen said the city received no negative feedback from Frogparking’s references or clients.

Paula Faust, city deputy director of public works, declined to respond to questions about the matter and wrote in an email that “procurement issues are a legal matter between the bidders and the city.”

Owen could not be reached for comment.

A staff report for the April 2 meeting when the City Council approved Frogparking said that “while Frogparking is not the lowest bid, they outweighed the other bids in the comprehensive technical solution that they provide.”

The report deemed Fybr, the other protesting company, “non-responsive.”

Fybr CEO Bob Glatz disputed that label and said the city abused its discretion in giving the contract to Frogparking, since it was not the lowest bidder.

“In a 37-year career … I’ve never seen anything so egregious before that I’ve wanted to spend a lot of money on lawyers,” Glatz said.

In a letter that Fybr’s attorney sent to the city, the company alleged Laguna Beach did not follow public contracts code by properly noticing the RFP in December and that it inconvenienced companies by releasing the RFP over the holidays.

Fybr’s letter also said the city did not give a reason for deeming the company’s proposal “non-responsive.” The letter gave several reasons that Fybr considers Frogparking a poor choice for the city. And like Indect, Fybr found out from news reports that it lost the bidding, Glatz said.

The city attorney’s response to Fybr, which the company sent to the Daily Pilot, said Fybr’s arguments about “defective noticing, improper publishing and failure to award the bid to the lowest responsible bidder are incorrect” because the complaints were based on a contracts code article that relates only to public works projects.

“The RFP for parking guidance technology is not a public works project and is not subject to the provisions of that article,” Owen wrote in the letter dated April 19.

The city’s letter also said Fybr’s proposal was deemed non-responsive because it lacked certain information required in the RFP.

In a reply April 23, Fybr said it provided the necessary information and that “any perceived non-responsiveness was again erroneous and an abuse of discretion.”

“I would like to see the process just be fair and do it over again,” Glatz said. “If you do it over again, the same party’s not going to win.”

But Johnson said he believes “the structure that the city went through was legal.”

“I think the cities all are very well-trained at how to put out a fair bid and give notice, so I think the bid time was correct, the notice was correct,” he said.

The city expects to have 75% of Frogparking’s sensors installed by summer, Faust said at the April 2 council meeting.

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This article was originally published at 3:10 p.m. and was later updated with additional information.