Schneider Airport Surveillance Contract Cancelled, 2 Year Ban

Schneider Electric had its contract rescinded and was banned from bidding on projects after the South Jersey Transit Authority Board of Commissioners voted to kill the deal March 19th. In the note, we share our findings from talking to officials and look at why.

The Project

The Atlantic City Airport wanted to upgrade its analog system to IP. For “security reasons” the airport won’t say how many cameras they plan to add or release any details about the project.

The Bid Process and Contract

The SJTA has not released detailed bids, however it did release a bid summary showing Schneider's bid was chosen because it was the lowest:

Contract Cancelled

The contract with Schneider was cancelled after the company requested modifications to the bid specifications after the contract award and “failure to adhere to the General Conditions of the Bid Specifications.”

The complete bid specification document has only been released to vendors because it contains “security sensitive information,” an official with knowledge of the project said. However, he did say the sections in question deal with liability insurance.

“We require a certain amount of insurance and liability insurance, and they decided they didn’t want to adhere to our procedures and they tried to do an exception to it. There was some negotiation between our counsel and them and we revoked it,” he said.

The resolution also bans Schneider Electric from bidding on any SJTA projects for two years.

Contract Re-awarded

In the same meeting, the contract was re-awarded to Chammings Electric, the second lowest bidder.

Insurance

Is it a common issue that a company wouldn't have the amount of insurance needed to be part of a project? And why would a company try to change the requirements after winning the bid? Schneider Electric has not responded to emails or calls about the contract, but if you have any insight on how insurance requirements have impacted your decision to bid on a project, let us know in the comments.

[Update Monday: March 24, 2013]

Schneider Electric says the local newspaper article about the contract "unfairly portrays the situation" and says the company could not agree on the contract terms and made a choice not to sign the contract it was awarded. It provided this statement by email:

Schneider Electric was awarded the contract for new security cameras in the passenger terminal at the Atlantic City International Airport, it is our standard practice to review all contract terms and conditions before signing. The South Jersey Transportation Authority contract was reviewed by the Schneider Electric legal team, and as is the case with many projects, a few changes to the contract were presented to SJTA. The SJTA did not approve these requested changes, so we requested that only the insurance term be changed. It is our standard protocol to provide a certification of insurance, but not provide a copy of Schneider Electric's policy. This request was denied, therefore Schneider Electric could not agree to the contract terms required by SJTA, did not sign the contract and notified the SJTA we would not be able to move forward with this project.