Last week, G-P Distributing Inc. rescinded its Canada Winter Games sponsorship, worth $30,000.
The move came after US-based conglomerate Sysco Foods Service received the lion’s share of a Games food contract worth roughly $500,000.
G-P Distributing received about 20 per cent of the total contract.
“It was my understanding from (the Games sponsorship committee) that they wanted to form a partnership and support local businesses,” G-P owner Kyle Doll said in a release on Friday.
“In return, local businesses were expected to provide sponsorship, which would be taken into consideration when awarding contracts.”
The Games works with sponsors to ensure they have an opportunity to bid on work, said Games general manager Chris Morrissey on Thursday.
“And the value of the sponsorship is also a consideration when we evaluate proposals.”
Sysco Foods is not listed as a sponsor on the Games website.
Sysco has provided no sponsorship for the Games and employs one Yukoner, said Doll.
Yukon College, which is supplied by Sysco, handled the food services tender.
“Through this whole process I believed (the Games) would be handling the tender,” said Doll.
“At no point was I advised the contracting of food services for the Games would be handled by Yukon College.
“Any contacts and relationships built with the Games host society and the sponsorship committee had no bearing on the tender package.
“The message being sent is while (the Games) were seeking sponsorship and support from the Yukon community, they are not willing to support the Yukon business community through awarding contracts with the Canada Winter Games.”
Had G-P maintained its sponsorship, it would have been expected to warehouse, store and deliver approximately $500,000 of its competitor’s goods, said Doll.
“Labour costs alone, from time of delivery of the competitor’s goods at my warehouse, through delivery of those groceries to the college, would have increased my sponsorship by thousands of dollars in addition to the already committed $30,000,” he said.
Doll is not the only Games sponsor feeling the pinch.
“I’m being squeezed,” said a local business owner and Games sponsor who wished to remain anonymous because they are still negotiating with the organization.
“It’s —‘We need you for this, this and this,’ then one thing was dropped. Then it was — ‘We’re going to break it up between two people, and this is our only budget.’
“And (the Games’) budgets are very tiny, smaller than my normal budgets are.
“So even though I’m already a sponsor and I’m giving away that much money, I’m still having to lower my price for Games.”
And the details are still not firmed up, said the business owner.
“We’re trying our best to go out and get things for free or at a discounted rate so we’re balancing the books,” said Morrissey.
“We can’t spend money that’s not in the bank.”
However, saving money is not always the Games’ focus.
“Contracts are not always going to the lowest bidder,” said Morrissey.
“We have certain criteria in place when it comes to requests for proposals that outline how we actually evaluate goods and services.”
But this criteria is muddy, according to Northland Beverages manager Gerry Thick.
“Sometimes with these Games, things might not be done straight up front,” said Thick on Thursday.
“And I’m sorry to see that.
“I hope it doesn’t have an effect on other local businesses in Whitehorse who support the arts and sporting events in the community in the future.”
In June, Thick submitted a proposal to have Pepsi and Northland be the Games’ official beverage supplier.
It was a lost cause, he said.
Dave Pearson, general manager of six businesses, including Whitehorse Beverages Ltd, Thick’s competitor, is vice-president of the Games volunteer committee.
And Pearson was already in negotiations with the Games, said Thick.
In December 2005, Pepsi requested sponsorship information from the Games.
It didn’t get a response.
“It was getting down to the crunch for us, for money and ordering,” said Thick, who sent an e-mail in April restating Pepsi’s interest in sponsoring the Games.
Almost two weeks later, Thick received a reply from Games sponsorship vice-president Paul Flaherty.
“We have been having ongoing discussions with Coke,” wrote Flaherty. “But nothing has been finalized at this point and thus would be happy to discuss the opportunity with you.”
“When I met with Mr. Flaherty, I told them right up front I was thinking of not giving them a proposal because it was either going to be used as a measuring stick, or we were out to lunch anyways,” said Thick.
“It just wasn’t a fair process.”
In the end, Northland did submit a proposal — “they got everything that’s in their budget, within my proposal, and they got it all for free,” said Thick, whose company has been a strong sponsor of local sports for 50 years.
But Whitehorse Beverages was awarded the contract.
“We believe that, although your proposal was very generous, the other proposal we received provided us with additional budget relief and the opportunity to showcase our support for a First Nations operated business,” stated a letter to Thick from Morrissey.
“I suspect they were making some excuse,” said Thick, who has not seen Coke’s winning bid.
“With Coke and Pepsi, we evaluated the proposals and picked the best one,” said Morrissey on Tuesday.
“And if people aren’t successful, we let them know why their proposal was not accepted.
“We try to be as open and transparent as possible when it comes to everything from staff hiring to public expenditures — basically we’re out in the public.”
However, winning bids aren’t made public.
“I don’t think we have to (make them public),” said Morrissey.
“But I’m not sure if that’s a good enough reason.”
Last year, Summit Awards owner Mitt Stehelin bid on the contract for Games pins.
But the contract was awarded to Alberta-based Laurie Artiss.
“And they refused to show me the winning bid,” said Stehelin.
“It’s weird.
“In any tender, especially one using government money, at the end of the day, all the cards are on the table, and everyone has a look to see who won and why. Then you can learn from that experience and go forward and do better next time.
“But these guys refused flat out to give me a peek.”
However, the government-funded Games don’t have to play by government rules.
“We’re not government,” said Morrissey.
“So we don’t practise things exactly the way government does.”
The 2007 Games received $8.75 million from Ottawa, $4 million from the territorial government (not including the $35 million athletes’ village or the $40 million Games Centre) and $2 million from the city.
It has received another $7.45 million in sponsorship, so far.