Hey, this is right up my alley. My job was managing a vending company branch until we closed in February.
I don't know the specifics of your contract but most of our standard versions allowed for 30 days notice of removal IF we recieved a registered letter of intent.
If your company sent this there has to be a record. That's BS that they say it didn't arrive. (I always dreaded when the postman brought one to me as I knew what it was.
)
I would be careful of moving the vendors, though. You could be liable for any damage. If the get the Pepsi/Coke machines from those folks you may end up having to deal with them and thier attorneys.
Who is handling the contract with them? HR or purchasing? Have you informed the vending company about the expired product and crappy service?
I was in this position a couple of times in my career and both times I saved the account but it sure sounds like this company is being silly. I guess the vedning business is so good that they can afford to lose customers. idiots.
Screw it. Call another company in and let the lawyers duke it out.