OKs DIA phone deal
By John Accola
Rocky Mountain News
Friday, November 11, 2005
Denver's city auditor has signed off on a controversial
airport concessions contract that went to the low bidder
after two other companies were booted for not partnering
with a certified disadvantaged business. Auditor spokesman
Dennis Berckefeldt said Denver-based RMES Communications
Inc. essentially won the airport pay-phone contract by
default, even though the company's annual income projections
for the city fell well under one of the rival bidder's.
RMES, owned by black businessman Herman Malone, is a
city-certified DBE, or disadvantaged business enterprise,
that formerly operated Denver International Airport's pay
phones with MCI and later Qwest Communications.
"Basically, the airport had no choice," Berckefeldt said. "RMES
was the only vendor left that met (the city's) disadvantaged
business enterprise requirements."
City Auditor Dennis Gallagher had held up the pay-phone
contract for more than a month after questioning a
procurement process that disqualified Chicago-based FSH and
New York's Verizon Communications.
In proposals to operate 200 pay phones at Denver
International, both companies said they were committed to
fulfilling a federal rule for 40 percent DBE participation.
Denver's Division of Small Business Opportunity, however,
ruled that they were ineligible because neither had
committed themselves to a partner that held current DBE
certification from the city.
FSH, a minority-owned company that acquired Qwest
Communications' pay-phone division last year, failed to
persuade City Council members to reject the RMES contract.
The three-year contract, with an option to renew for two
more years, gives the city a 16 percent cut of pay-phone
sales. RMES estimates annual revenues of roughly $1.3
million over the next two years.
FSH submitted a bid offering a 30 percent commission that
would have generated an additional $1.5 million for the city
over five years.
The company has since filed a lawsuit against the Denver
Department of Aviation and the city's small-business office,
alleging a corrupt procurement process.