- The Washington Times - Friday, April 20, 2001

The Metropolitan Police Department wasted more than $1.2 million by failing to properly manage a private contractor who repairs city cars, according to a federal audit.
The General Services Administration inspector generals audit found that police officials failure to have qualified managers "weakened" the departments ability to control costs of Serco Management Services Inc. and keep its $3.5 million contract within the financial ceiling.
The contracts cost last year increased from $3,529,936 to $4,794,388 — a 36 percent increase.
The GSA findings contradict testimony to the D.C. Council by Chief Charles H. Ramsey and Eric Coard, the departments chief executive director of corporate support, who said cost overruns were caused from the contract being underfunded.
In light of the GSA audit, Chief Ramsey said it would be impossible to know if the contract was funded inadequately or if mismanagement caused funds to be wasted.
"We need to do the best we can to manage this contract, but we need to privatize. If it isnt this company, it will be another, " the chief said.
"We do need to have better oversight to look out for our interests, " Chief Ramsey said.
Mr. Coard said he still believes the contract is underfunded. He also said he is waiting for approval from the office of the chief financial officer to hire a qualified service manager and fleet manager.
Mr. Coard, who oversaw fleet operations before Serco was hired in September 1999, would not say why a qualified manager was not hired when Serco began repairing police cars.
"We are trying to move the process forward and hire a service manager to work with the fleet manager, not look into the past, " he said.
GSA auditors found that the department had no properly experienced person monitoring the contracts costs or the quality of Sercos work. The auditors recommended the department have a certified mechanic review Sercos charges.
"The is required to review technical submissions and schedules, monitor schedules and work progress to ensure contractor performance, and monitor and inspect work performed by the contractor," the auditors wrote.
"A mechanic could help control costs by making decisions on what non-target repairs are absolutely necessary for the safe operation of the vehicle, but at the same time disapproving repairs that may be put off until a later time if the budget is running tight," the auditors wrote. "These type decisions would be made to manage costs to comply with the contract ceiling levels."
The auditors found that the department should have questioned many repairs that appeared "unusual"; instead, police officials paid Serco whatever the company charged. The auditors cited three 2000-model vehicles one of which had four tires replaced after 833 miles, another had nine tires replaced in seven months and the third had its brake rotors replaced after 7,500 miles.
The Washington Times reported Tuesday the audit found that Serco invoices for simple repairs seemed high. Invoices show that the department paid $56.08 to replace windshield wipers, $157.99 to replace a light bulb, $187.47 to replace a $36 battery, $186.55 to remove snow chains, $80.12 to replace a fuse, $1,940 for a front brake job and front-end alignment, and $252.63 for an inspection, oil change and lubrication job.
The GSA auditors said a qualified manager would have halted major repairs of older model cars that were later scheduled to be sold at auction. Instead, department managers authorized spending $158,548 to repair the old cars many of which were sold for about $1,000 each.
The auditors said while older cars were being repaired, new cars remained in storage because they were not outfitted with emergency lights, radios or striping. The auditors recommended that the repairs to older cars be deferred while Serco mechanics prepared new cars for service.
The GSA also recommended that Sercos 8 percent markup for parts and tires be eliminated when the contract is renewed since it cost the police department $81,598 through December. The auditors said both Serco and Addison Auto Parts, which provide the parts, use the police departments facility rent-free and there is no justification for the 8 percent "material handling charges."

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