The New York City Comptroller is not satisfied with answers about the bid process that led to $166 million in deals between Snapple Beverage Group and the city, and has requested an audit of the selection process. Last month the office called for the five-year deal, giving Snapple exclusivity as the city’s beverage vendor, to be cancelled.

“The answers I have received have proven unsatisfactory,” Comptroller William Thompson said in a statement, referring to communications with Department of Education Chancellor Joel Klein’s office. “The public, vendors and elected officials must be confident that agreements are awarded fairly and without the taint that now surrounds the Department of Education and citywide agreements. These two contracts are the city’s first venture into sponsorships and marketing and must be above reproach.”

The partnership, announced in September, called for Snapple to sell juice drinks and bottled water in the city’s 1,200 schools. Distribution was to begin within 30 days. In the second, more lucrative deal, Snapple was to put vending machines in all 6,000 of the city’s public buildings to sell its iced tea, water and Yoo-hoo chocolate drink. That deal is set to begin Jan. 1, 2004. Snapple bid $40.2 million for the school distribution deal and $126 million for vending in public buildings. Thompson began investigating the deals after competitors complained.

In a four-page letter to Mayor Michael Bloomberg dated Dec. 3, Thompson stated his concerns that the city may have failed to conduct a fair and open competitive process in the award of the Snapple agreement. He said he had directed his staff to audit the DOE’s process.

He said that vendors were not provided a level playing field as they were told to bid on a different mix of products. For example, Pepsi was asked to give a price structure for fruit juice, water and snacks. Apple & Eve was told to propose prices for fruit juice only, the letter said.

The letter also stated that Snapple did not have a fruit juice in its inventory at the time it was negotiating with Octagon Corp., the DOE’s marketing agent. Thompson also cited conflict of interest problems with Octagon, which does business with Cadbury Schweppes, Snapple’s parent, and is related to Snapple’s advertising firm through common ownership by the Interpublic Group. He said that Octagon had failed to publicly advertise that it was seeking proposals and did not issue a Request for Proposal so other vendors would know the guidelines.

Snapple claimed that it is compliance with city processes, but did not return a call for comment yesterday.

“We followed the guidelines as set forth by the city,” Steven Jarmon, a spokesperson for Snapple Beverage Group, said last month. “[The city] told us that there is not a violation here.”

The city expected to generate $1 million in revenues and was guaranteed $60 million in marketing and promotion value. As part of the deal, Snapple was to financially support the schools through commissions on sales from vending and via sponsorships supporting sports and physical education programs.

The New York City Comptroller is not satisfied with answers about the bid process that led to $166 million in deals between Snapple Beverage Group and the city, and has requested an audit of the selection process. Last month the office called for the five-year deal, giving Snapple exclusivity as the city’s beverage vendor, to be cancelled.

“The answers I have received have proven unsatisfactory,” Comptroller William Thompson said in a statement, referring to communications with Department of Education Chancellor Joel Klein’s office. “The public, vendors and elected officials must be confident that agreements are awarded fairly and without the taint that now surrounds the Department of Education and citywide agreements. These two contracts are the city’s first venture into sponsorships and marketing and must be above reproach.”

The partnership, announced in September, called for Snapple to sell juice drinks and bottled water in the city’s 1,200 schools. Distribution was to begin within 30 days. In the second, more lucrative deal, Snapple was to put vending machines in all 6,000 of the city’s public buildings to sell its iced tea, water and Yoo-hoo chocolate drink. That deal is set to begin Jan. 1, 2004. Snapple bid $40.2 million for the school distribution deal and $126 million for vending in public buildings. Thompson began investigating the deals after competitors complained.

In a four-page letter to Mayor Michael Bloomberg dated Dec. 3, Thompson stated his concerns that the city may have failed to conduct a fair and open competitive process in the award of the Snapple agreement. He said he had directed his staff to audit the DOE’s process.

He said that vendors were not provided a level playing field as they were told to bid on a different mix of products. For example, Pepsi was asked to give a price structure for fruit juice, water and snacks. Apple & Eve was told to propose prices for fruit juice only, the letter said.

The letter also stated that Snapple did not have a fruit juice in its inventory at the time it was negotiating with Octagon Corp., the DOE’s marketing agent. Thompson also cited conflict of interest problems with Octagon, which does business with Cadbury Schweppes, Snapple’s parent, and is related to Snapple’s advertising firm through common ownership by the Interpublic Group. He said that Octagon had failed to publicly advertise that it was seeking proposals and did not issue a Request for Proposal so other vendors would know the guidelines.

Snapple claimed that it is compliance with city processes, but did not return a call for comment yesterday.

“We followed the guidelines as set forth by the city,” Steven Jarmon, a spokesperson for Snapple Beverage Group, said last month. “[The city] told us that there is not a violation here.”

The city expected to generate $1 million in revenues and was guaranteed $60 million in marketing and promotion value. As part of the deal, Snapple was to financially support the schools through commissions on sales from vending and via sponsorships supporting sports and physical education programs.