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December 3, 2022

COD – US Bank no bid contract -part 3

By Kirk Allen & John Kraft

On March 6, 2015

DuPage Co. (ECWd)

If you have not been following the chain of events as it relates to COD and their no bid contract with US Bank we suggest you read part 1 and part 2. 

Why didn’t COD seek RFPs or bids on this project?

As we outlined, it may be that no bidding is required for these bank branches, however, the dollar figures that COD is spending for their end of this deal is still not known as they have yet to respond to my FOIA for that information.

Considering COD is a member of the Illinois Community College Association and has received the ICCA handbook for trustees we felt it appropriate to share an example used by the ICCA during one of its discussions on bidding and what to look out for.

Before diving into that matter, we have informed public officials numerous times that every board member has the same exact power as any other board member and the Chairman is only provided the power to run the meetings and sign the contracts.  Something that COD Board Chairman must have failed to read in her ICCA handbook!

“As a community college trustee, you are one member
of an eight-member board. All board members have
equal rights and responsibilities, with one exception —
the student trustee does not have the right to cast a
vote. (Click here to view ICCA Handbook)

What constitutes a legal bid?

If the vendor were to call the college and say “It just so happen we got an XYZ machine sitting in our show room floor for $30 thousand dollars. And do you want it?” If the college president says “yes” and then publishes a request for bids for XYZ machines (after he made the side deal with the vendor), the president is guilty of a bid rigging violation. That’s a felony under Illinois law.

But not if the college then went out for bids for such a machine and the college’s request for bids simply described what the machine will be used to do. Then it’s not locking into a given vendor’s product. And then you wouldn’t be guilty of rigging a bid.” (Click here to download the ICCA What constitutes a legal bid document”)

Let’s apply this test to COD and the US Bank situation

What we know:

  • US Bank Marketing President is COD Foundation Board member
  • No Request for Proposals
  • No Bidding notifications
  • No bids received

How did US Bank get an exclusive contract to operate on public property?

U.S. Bank then approached the College about locating a customized, full service branch bank on campus.” (Click here to read from the Board Approval Document presented by Breuder)
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Is there any difference in the example presented by the ICCA that outlines felony actions and the actions of COD in the US Bank deal?  The Bank notified COD?  So it is clear there was an interest from US Bank and it is also clear COD did not even discuss seeking a competitive proposal from another bank.  Am I the only one that finds that very troubling?
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We also know that US Bank has not complied with its obligations under the contract as it relates to monthly payments and scholarship payments under that contract, assuming COD is being honest with the FOIA responses. (Click here for COD FOIA response to American Transparency)
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The latest signature date on the contract was signed October 25th, 2012. “The effective date of this Agreement shall be the date upon which the last party signs the Agreement.”  (Click here and read 2.1 on page 2)
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That would indicate, according to the language in the contract, an advance payment of $1,500.00 should have been made November 1st, 2012.
  • 4.2 –“The License Fee shall be payable in equal monthly installments of One Thousand Five Hundred and No/100 Dollars ($1,500.00) in advance on the first day of each month” (Click here and read 4.2 on page 3)
Using that language, the total license agreement revenue from US Bank should be $3,000.00 for the remaining two months of 2012 and $18,000 a year there after, however, that is not the case.  (Click here for payments from US Bank-listed as fiscal year payments)
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The first payment made was not until March of 2013! That being the case, US Bank appears to be in breach of the contract based on item 14.1 of the contract. (Click here and read 14.1 on page 9)
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Do not confuse the “terms” of the agreement outlined in 14.2 with the payment obligations.  The terms referenced is related to when the clock starts for the 7 year exclusive, not when payments are due.
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Even more disturbing is section 4.3.1 and 4.3.2 that mandates additional financial considerations that have not been complied with assuming once again COD is being honest with the records provided.
  • 4.3.1 – “Bank shall pay, within 90 days of the opening of the On-Site Branch, and annually thereafter, a payment of $2,500 to be used for a U.S. Bank named sponsorship opportunity, to be; mutually agreed upon by the Bank and College.”
  • 4.3.2 – Bank shall pay, within 90 days of the opening of the On-Site Branch, and annually thereafter, a one time payment of $2,500 to be used for a U.S. Bank named scholarship opportunity, to be mutually agreed upon by the Bank and College. (Click here and read 4.3.1 and 4.3.2 on page 3)
The response from COD does not reflect either of those $2,500.00 mandatory payments.  For an administration that stood before the public and bragged about their internal controls and over-site, I have one simple question:
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How is it that no one has caught the fact that $11,000.00 worth of  payments have not been collected based on documents provided by COD?
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Next up is Part 4 – Property Tax!

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3 Comments
  • DuPageLiberty
    Posted at 08:29h, 07 March

    RT @ECWDogs: COD – US Bank no bid contract -part 3: DuPage Co. (ECWd) –
    If you have not been following the chain of events a… http://t.c…

  • Ted Novak
    Posted at 09:42h, 07 March

    And let’s not forgot that the college for many years had a great relationship with the College of DuPage Credit Union which merged into the Dupage Credit Union until Brueder came along. They had a very small office for years and were told the college didn’t have room for them. Now US Bank takes up enormous space.

    • jmkraft
      Posted at 13:19h, 07 March

      That’s probably because they (Credit Union) were not on the Foundation board…I must check that one out.

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