Members of the Wellington Village Council agreed last week to enter into a $165,000 contract with the Gehring Group for insurance brokerage services, despite some reservations.
Council members voted 3-1 to approve the contract June 24, despite concerns about the bidding process, which saw a $100,000 disparity in the high and low bidders. Councilman Matt Willhite dissented, while Mayor Bob Margolis did not take part in the discussion because he sits on the Florida League of Cities’ Municipal Pension Trust.
“I have concerns with the process and how it went,” Willhite said. “This is still approximately $50,000 over what the lowest bidder was. I appreciate them lowering their costs, but I can’t support this.”
The Gehring Group, which currently handles Wellington’s brokerage services, initially bid a $198,000 contract and was ranked first by all of the selection committee members, made up of directors of village departments. Last month, council members asked staff to negotiate a lower cost.
“After negotiation, they have agreed to reduce their commission on premium price to $165,000 based on current premiums, with no change on the level of service,” Business Services Manager Ed De La Vega said.
Councilwoman Anne Gerwig said Wellington shouldn’t choose the cheapest option when value was more important.
“This was the highest rated by our selection committee,” she said. “The price was a part of that number, but I go back to the professional quality. The selection committee ranked them based on the experience and service they provided.”
Gerwig supported spending more up front to ensure Wellington gets the best quality of service.
“We’re not trying to find the cheapest provider we can find, but the one that brings us the most value,” she said. “When you go with the cheapest option, it can end up costing more in the long run. They might not understand us; we know the Gehring Group does.”
Although Councilman Howard Coates agreed that the Gehring Group is qualified, he said he still has reservations about the selection process.
“I’m very concerned about a process that results in such a disparity that you can start out with a difference of almost $100,000 between the low-cost provider and the provider staff recommends to us,” he said. “We have to tweak our process to give more consideration to price than we currently do.”
Though price isn’t necessarily the most important factor, Coates reminded council members that Wellington is spending taxpayers’ money.
“It’s a disservice to the taxpayers,” he said. “I’m not saying we don’t need to look at the value we’re getting, but the mix is somewhat off here. This is not the first time we’ve had to sit up here and justify paying more than what a low-cost provider submitted. It’s hard to measure what the value we’re getting is for taxpayers.”
Coates said he would support the contract, but wanted more inspection of the bidding process in the future.
Vice Mayor John Greene also said he would support the bid but had concerns. “It’s important we understand the value we’re getting,” he said. “This group is pretty entrenched in who we are as a village, our process and the way we handle our products and services.”
At the same time, he said, changing firms would be costly.
“My concern is that we’ve created a dependency on this firm that puts us in position where we almost can’t afford not to continue the relationship,” Greene said. “I think that’s dangerous, to be in a position where we don’t have a choice. We do, but there’s a cost in making a change.”
He said he wants Wellington to continue to look into the possibility of self-insurance. “I want to make sure we’re getting the best bang for our buck,” Greene said.
Gerwig asked how points are allotted in the selection process. De La Vega said it’s typically a 40-20-20 ratio, with price being one of the lower components.
“Maybe there’s not as much weight on price as Mr. Coates would like,” Gerwig said. “But I think when it comes to professional services, it’s not about the price. It’s about the value you’re being provided. You’re not the best lawyer that I can hire, but you’re the best value. I don’t see why that works for you, but won’t work for this.”
Coates said he gets paid privately. “It’s not the taxpayers’ money,” he said.
He made a motion to approve the contract, which passed 3-1 with Willhite opposed.
