But while most cities across Broward County (and elsewhere) have codes requiring staff to conduct a competitive bidding process for service contracts, the City of Margate apparently doesn't require any such practice.
In a report issued April 6, the Broward Office of the Inspector General found that the city's purchasing rules do not require a competitive bidding process for purchasing most outside services — no matter the cost — leaving the city vulnerable to fraud and abuse.
"The City of Margate's code is concerning, as at the very least it leaves open the door for the appearance of favoritism and a lack of public confidence in the purchase of services," the report (attached at the bottom of this story) states. "At worst, it opens the city up to something more nefarious such as fraud, waste, and abuse."
According to the city's current procurement code, all the department directors can make purchases of services less than $15,000 without further action. Services that cost more than $15,000 only need to be authorized by the city manager, while all purchases of services of more than $50,000 need to be signed off by the city manager with notification to the city commission. According to the report, the procurement manager told the OIG that purchases of services under $50,000 were often approved without much review "if nothing seems improper."
The report compares Margate's process to other cities like North Lauderdale, Pembroke Pines, and Tamarac, all of which have competitive bidding on services, including requiring staff to retain at least three written or oral quotes from potential contractors.
Margate doesn't have as much as a procurement manual or guidance beyond the code, according to the report.
"Without competitive bidding, the public has no tool to gauge whether contracts for services were awarded equitably and economically," the report reads.
The report stems from an OIG investigation that began in May 2021, when the inspector general's office received a link to a local news article alleging that Margate had failed to solicit more than one informal bid before it officially began doing business with an outside vendor.
The article, authored by the blog MargateNews.net, described a $25,000 purchase made by the municipality for services from the market research and survey company ETC Institute, which was to create a seven-page community survey intended to help assess Margate residents' satisfaction with city services.
The OIG found that Margate city officials did not engage in misconduct by awarding the no-bid contract.
The report nonetheless zeroed in on the city's contested practice of not requiring competitive bidding when contracting with outside vendors. The OIG found that Margate's process for awarding service contracts is "problematic, out of step with best practices, and under some circumstances, could lead to gross mismanagement."
The report notes that while Margate officials have competitively solicited services on occasion, the city still needs to establish a clear policy on the matter. The inspector general's office recommends that the city review its code and amend its language to, at minimum, establish competitive bidding requirements.The OIG found Margate's approach was "out of step with best practices, and under some circumstances, could lead to gross mismanagement."
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"A clear and objective policy as to the thresholds where the purchases of services require competition would help inspire public confidence that contracts are awarded equitably and economically," the report reads.
In response to New Times' request for comment, the city said that it is reviewing the OIG's recommendations and working to ensure taxpayer dollars are spent efficiently.
"The procurement of goods and services requires a delicate balance of procedures, in which the cost of internal controls should not outweigh its benefits," the city said in a statement. "The City of Margate prides itself with integrity, transparency, and sound governance. We want to ensure the public that their tax dollars are, and will continue to be, used in accordance with City Code and industry best practices."
Caroline Klancke, the executive director of the nonprofit Florida Ethics Institute, tells New Times the OIG report was on point in identifying shortcomings in the city's approach.
While there was no evidence of unethical conduct by city staff associated with the award of the ETC contract, Margate's failure to use competitive bidding leaves the city susceptible to future misconduct and mismanagement, Klancke says.
"Not only do competitive bidding best practices help cities in ensuring that its public servants award contracts and purchase services based upon the best and most competitive bids, but it also helps to affirm and safeguard the public's trust in the fairness of public contract awards," Klancke tells New Times. "These goals should be of paramount import to the City of Margate, which should consider appropriate amendments to its ordinances in light of the Inspector General's report."
This wouldn't be the first time Margate has found itself in the midst of controversy over claims of lax oversight.
Back in 2016, the OIG issued a report accusing Margate city officials of "gross mismanagement" after the city allegedly lost track of funds in an arrangement with an Alzheimer's nonprofit. Then, in 2019, ex-Margate city commissioner David McLean was sentenced to five years in state prison after being convicted of bribery and official misconduct for doing city favors for the landlord of a tiki bar he operated inside a strip mall.
More recently, in 2021, the Sun Sentinel reported that the OIG requested copies of contracts between the city and a construction company with past ties to a commissioner.
