Company that creates blue signs on highway loses contract

MILWAUKEE (WITI) -- A Milwaukee company says it is fighting a DOT decision -- one it says won't just hurt the company's bottom line, but thousands of businesses across the state. It all has to do with those blue signs you see along the highway.

Derse has been creating and maintaining the signs for the past 28 years. It lost a bid to continue doing that, and now, it's fighting back.

The blue signs along the highways alert drivers to hotels, gas stations and places to stop for a bite to eat.

"Most customers have been extremely satisfied with us for the past 28 years," Brett Haney with Derse said.

For the past 28 years, the signs have been created in the Derse warehouse and maintained by the folks who work there.

"From its inception, the blue highway business signs have been something that we`ve serviced and serviced well throughout the state," Haney said.

The DOT is in charge of contracting who makes and services the signs, and when Derse heard it didn't win the latest contract, Haney says it was a total shock.

"It doesn`t make a lot of sense from our point of view," Haney said.

The DOT instead gave preliminary approval to Interstate Logos -- a subsidiary of Lamar. Interstate Logos operates out of Baton Rouge, Louisiana.

Derse says that company charges more than it does -- and will hurt the businesses that advertise on the blue signs.

"Some of the state businesses are going to be paying over double," Haney said.

Some business owners say it would be too costly to keep up.

"That's quite a steep increase. We would definitely have to cancel our contract.  We would not be able to keep the highway signs any longer," one business owner said.

Derse will hand in an appeal on Thursday, February 6th. It says it could lose around $2 million and create some layoffs.

"We are optimistic and very hopeful they will overturn the decision that's been made for all the flaws that have been in it throughout," Haney said.

The DOT says pricing is still being negotiated, and it chose Interstate Logos because it got a higher evaluation.

Meanwhile, this decision by the DOT has drawn the attention of a bi-partisan group of elected officials from Wisconsin who are calling for the Department of Administration to change the DOT's decision.

“We can’t drive Wisconsin businesses away,” said State Representative Josh Zepnick (D-Milwaukee). “The decision by DOT to shut the door on a Wisconsin company that has done business with this state since this program started is a short sighted decision.

“Like many people in Wisconsin, I question the decision made by the DOT to award this contract to an out-of-state company without offering an explanation or agreeing to specific terms. If the DOT still plans to negotiate rates, why award the contract in the first place?” said State Representative Adam Neylon (R-Pewaukee).

“Set aside the fact that the Wisconsin companies using these signs will see huge cost increases imposed from this out-of state conglomerate, the real issue here is the fact that this company just didn’t follow the rules,” said John D. Finerty Jr. of the law firm Michael Best & Friedrich LLP.

Department of Administration Secretary Mike Huebsch will have an opportunity to review the decision by DOT that would result in cost increases of as much as $10 million – all on the backs of Wisconsin businesses. The additional revenue all goes to Interstate Logos, a subsidiary of out-of-state mega advertising giant Lamar. Despite the huge price increase there are no new services or products and no new revenue for the State of Wisconsin.

“The Department of Administration takes procurement issues very seriously,” said Finerty.  “Given the clear cut violations that took place I’d be surprised if Secretary Huebsch didn’t throw out Interstate’s proposal. There’s just too much riding on it for the administration given how much this Governor is focused on Wisconsin businesses and Wisconsin jobs.”