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May 1: NYC Comptroller Will Contest Exclusive Snapple Vending Contract At State Supreme Court Hearing On May 13

Posted On: 5/1/2004

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NEW YORK CITY - State Supreme Court Justice Richard Braun has denied New York City Comptroller William Thompson, Jr.'s request to scrap the $126 million contract awarding Snapple the exclusive right to install vending machines in 6,000 of the city's public buildings. However, Justice Braun scheduled a hearing for May 13, at which the comptroller will argue for nullification of the contract.

Thompson filed an action in New York State Supreme Court on April 21 to prevent execution of the contract. The judge declined to sign a temporary restraining order that would have blocked Snapple from beginning installation of the machines on April 23, on the ground that Thompson had failed to show any "irreparable harm" if machine placement goes forward. Braun can issue a declaratory judgment requiring Snapple to remove the machines, if Thompson prevails in court.

On March 18, following an in-depth audit, Thompson refused to approve the Snapple contract. He accused the city of awarding Snapple a "sweetheart deal" to sell its drinks in the city's public buildings without participating in the necessary competitive bidding process.

"As New York City enters into this marketing arena, I am trying to ensure that all vendors will have a fair chance," Thompson told VT. "The best way to do this is to mandate an open process with a public hearing and oversight by office. That is the purpose of my lawsuit."

Mayor Michael Bloomberg overrode the comptroller's rejection, and directed Thompson to register the contract. He acknowledged that the bidding process "may not have been perfect," but stated that the deal is good for the city.

Thompson audited a separate $40 million contract last fall, in which the New York City Department of Education named Snapple the exclusive beverage vender for schools citywide. That audit revealed that Snapple was the only company allowed to rebid higher, after making a subpar bid.

The city received approval from a Franchise and Concessions Review Committee to proceed with the deal. Thompson has no authority to halt the school Snapple agreement, because the DOE is not required to adhere to city procurement policies.