STRAW BID FOCUS OF $3.3 MILLION BISD INSURANCE AWARD

By Juan Montoya
When two companies bidding for the Brownsville Independent School District's $3.5 million  windstorm, machinery, and boiler insurance contract were excluded from consideration, the reason given was because they did not have the authority or permission to approach the companies already on board with  McGriff and Seibels and Williams of Houston, Texas, the broker for the district.
The other company besides McGriff who was rated by the district's evaluation committee was Bordon's Insurance, of Corpus Christi.
The district employees who made up the evaluation committee were Employee Benefits administrator Judy Cuellar, Payroll Administrator Kenneth Lieck, Warehouse Adm. Kent Wittenmore, CFO Lucio Mendoza, Finance Coordinator Mark Alaniz, and Belia Rodriguez, a representative from the purchasing dept.

They rated McGriff over Bordon's simply because the premiums were higher, and on two other subjective categories: professionalism and financial.
If they had looked closer, they would have noticed something curious. The companies listed by McGriff as making up their bid for the contract were the identical ones listed by Bordon's. So how did both companies – supposedly in competition with each other – end up listing the same carriers in their proposals?
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The other two, the Klements Agency and Montlavo Agency, were declared non-bids by Employee Benefits administrator Judy Cuellar. and members of the district evaluation committee that included Cuellar, Payroll Administrator Kenneth Lieck, Warehouse Adm. Kent Wittenmore, CFO Lucio Mendoza, Finance Coordinator Mark Alaniz, and Belia Rodriguez, a representative from the purchasing dept.
The three BISD board members who head the insurance committee are Cesar Lopez, Jose Chirinos and Carlos Elizondo.
The two companies who were not considered, according to Cuellar, was because they did not have the authority or permission to approach the companies McGriff already had contacted to be in their bid. Many companies, insurance experts say, only allow one agent to approach them and will not consider any others.
At least one representative of the companies excluded, Greg Kelment, of Klements Insurance, said the set up in effect prevents other brokers or their agents to offer any bids because McGriff has already "tied up" the bids.
Was the Bordon's quote simply a ruse to make the district believe that there were two different companies bidding when in reality the same insurance carriers are listed by both with the only difference being the price that favored McGriff?

With both Bordon and McGriff's bids scoring identically in the minimum, professional and coverage categories, the evaluation committee based their choice between the two on cost, professional and financial qualifications. By that measure, McGriff was awarded a 100 and their straw company, Bordon's, a 86 rating.
The other two – whose cost and commission and inspection fees were much lower – were not even considered.