20-year awarded to BIG Outdoors
By Dolores Quintana
Santa Monica City Council has approved a 20-year contract for digital wayfinding to BIG Outdoors amid legal threats from IKE Smart City, the main competition in the bidding process. IKE Smart City made claims of infringement and unrealistic financial projections during the RFP process as part of the City’s Community Partnerships Program.
According to the City, the agreement approved on December 13 will generate a minimum of $5 million in revenue through advertising to the City annually. The program comes after City Council directed staff in 2020 to pursue public-private partnership opportunities to generate new revenue.
“This new community messaging and advertising program provides a benefit to residents and visitors while also creating a new much-needed revenue source that can support community programs,” said Mayor Gleam Davis. “The City and the selected vendor look forward to engaging the community as the kiosk program launches.”
In their bids, BIG Outdoor is offering a full-time Santa Monica ambassador, something the other bidder IKE Smart City did not do as part of their bid. BIG Outdoor offered up to 90 percent off for local businesses to place ads. 10 percent of ad space would be reserved for local businesses. IKE Smart City offered a 50 percent discount with 25 percent of ad space set aside for small businesses. BIG Outdoor offers an in-market maintenance team seven days a week, while IKE offered five. In terms of projected revenue, in their respective bids, BIG Outdoor projected an average of $14.8 million while IKE Smart City projected $5.3 million.
BIG Outdoor first offered a signing bonus of $3 million to the city, which they raised to $4 million as the negotiations progressed. IKE Smart City offered no initial signing bonus, but as part of their best and final offer offered a $1 million signing bonus.
Another part of BIG Outdoor’s offer is a Santa Monica-based warehouse dedicated to serving the program and the city. Their kiosks would be custom designed for Santa Monica with innovative technology and durable hardware and the full-time maintenance team would be available seven days a week. BIG Outdoor promises that 2% of the program’s annually generated revenue would be donated to the community, between $112 K and $298 K each year, to support community services and programs with the City Council having the oversight of where those monies would go. They would also give 10% of the kiosk’s screen time to the community for free.
IKE Smart City would not be in-market with its own warehouse and would have a maintenance team available for the program five days a week. The company offered $250K worth of advertising space as a donation to the community and, at first offered 12.5% of the kiosk screentime for community use for free and upgraded to 25% in their best and final offer.
The proposal’s minimum annual guarantee from BIG Outdoor remained consistent from their initial offer to their best and final offer as an average between phase one (25 kiosks) and phase two (50 kiosks) at $5.49 million. IKE Smart City’s minimum annual guarantee started at $0.9 million (25 kiosks) and $1.77 million (50 kiosks) but went up noticeably when they submitted their best and final offer of $1.66 million (25 kiosks) and $3.18 million (50 kiosks).
IKE Smart City, however, alleged infringement made by BIG Outdoors in addition to unrealistic financial projections. IKE Smart City claimed that BIG Outdoor filed “astronomical” financial projections that it can not stand by. In addition, Big Outdoor claimed BIG Outdoor’s copied its kiosks from IKE Smart City’s designs and language from their proposals to other cities. IKE Smart City also alleged, with photos, that BIG Outdoor stole their user interface design in addition to their kiosk design. IKE Smart City’s representative at the City Council meeting, Victor de la Cruz, also said that the company filed a federal lawsuit against BIG Outdoor for the alleged copyright infringement.
BIG Outdoor’s response was to say that IKE’s claims had no merit and to remind the City Council that the Santa Monica City Attorney agreed with their assessment that their claims had no legal merit, as the kiosk and interface design is common in the industry and did not originate by IKE Smart City and that the staff recommendation is legally defensible.
With that, the City Council voted on the staff recommendation to award the contract to BIG Outdoor and the motion passed with a five to two vote, with Councilmembers Caroline Torosis and Phil Brock voting no.
