Metropolitan Police Chief Charles H. Ramsey said his department will open its car-maintenance contract to competitive bids, after reports by The Washington Times about mismanagement of its current $3.5 million contract with Serco Management Services Inc.
“I want to make sure we have a better-written contract, whether it is Serco or someone else doing the work,” Chief Ramsey told The Times. “Im going to make sure we get a better deal, but I know for sure we will have better oversight.”
The chief made his comments after The Times inquired about the son of a Serco official who was paid almost $100,000 through the departments fleet maintenance contract. The sons company was not licensed to operate in the District and was awarded repeated contracts with Serco without any bidding or oversight by the police department.
Documents obtained by The Times under the Freedom of Information Act show that Serco paid American Logistic Management Services Inc. (ALMS) $99,141 between July 31, 1999, and Feb. 10, 2000. More than $93,000 of that total was paid by D.C. taxpayers via the police department contract.
ALMS is owned by Jason Bergeron, 24. He is the son of Serco Vice President Raymond J. Bergeron, and his company was once based in his fathers home in Middle Village, N.Y.
ALMS, hired by Serco as a subcontractor under the police department contract, has operated illegally in the District by failing to register with the proper city agencies and not paying D.C. sales taxes. The Delaware-registered corporation never registered as a corporation in the District nor filed with the D.C. Office of Tax and Revenue for business sales and employee-withholding taxes that are required by all companies operating in the city.
Serco originally hired ALMS in July 1999 to do odd jobs for $2,000.
In November 1999, ALMS began installing police car decals and prisoner containment units at the police departments fleet services building at 1501 S. Capitol St. SW. ALMS and Serco failed to get the appropriate building permits and inspections by the Department of Consumer and Regulatory Affairs.
ALMS had little or no overhead since Serco provided all the equipment, work space and materials, which were ultimately paid for by the police department.
Jason Bergeron made on average about $100 an hour, while Sercos qualified mechanics charge $34 an hour and the police departments mechanics charge $17 an hour an apparent violation of Sercos police department contract, in which Serco said it would subcontract only work that could be done more cheaply.
Chief Ramsey said he will include payments to ALMS in an ongoing investigation of Serco and fleet management by the Office of Professional Responsibility, which investigates public corruption. The investigation began after The Times reported that $300,000 worth of the police departments new automobile parts were disposed of as scrap when Serco started repairing police vehicles in September 1999.
“I dont have all the facts, and this is an issue that needs to be investigated,” Chief Ramsey said. “This is an issue that needs to be closely scrutinized.”
“I am having the Office of Professional Responsibility investigate this and see if other procedures were not followed or laws violated,” he said.
The chief said he is getting assistance from Montgomery County, which also has hired a private company to repair its police cars, to help write a new contract for the D.C. police department and establish proper contract oversight. Police officials mismanagement of the Serco contract has resulted in budget overruns of about $1 million.
Mike Henry, Sercos president and chief operating officer, said he was unaware that Raymond Bergerons son had been used as a subcontractor before receiving inquiries from The Times. He said he began looking into the matter and talked with Raymond Bergeron to be sure he had not received any income from ALMS.
Mr. Henry said he was unaware that ALMS had failed to file tax and corporate information with the D.C. government and that ALMS had operated illegally in the District.
Other discrepancies in Serco-ALMS records include Serco payments to ALMS before the company submitted invoices, Jason Bergeron signing for supplies through a Serco account, and no Serco requirements for ALMS to be licensed, bonded and insured. Mr. Henry said Serco normally requires its subcontractors to have proper insurance and local licenses before they are hired.
“Of course, we are concerned. This is not Sercos practices,” Mr. Henry said during a telephone interview. “You never want a conflict of interest or an appearance of a conflict of interest.”
He said that, although he has been investigating the matter for the past two weeks, he has not checked Raymond Bergerons financial records to see if he received any payments from his son or his sons company. Mr. Henry also said he was unaware that ALMS corporate headquarters were located in the home of Raymond Bergeron and his son.
The D.C. police department contract was advertised and awarded by the General Services Administration, which forbids the principals of its contracts to receive payments from subcontractors.
Mr. Henry said he has no indications that Raymond Bergeron did anything wrong.
Raymond Bergeron has not returned calls seeking comment at Sercos office. Jason Bergeron has not returned calls made to his home; no one has answered the phone at ALMS all week.
The Times reported Wednesday that the police departments current contract with Serco is costing $70,000 more than it should because it allows Serco to charge by the job rather than by the hour; Serco has been charging 20 percent more for labor than its mechanics have actually worked.
The Times also found that, although police officials promised the D.C. Council the contract would be modified in October, nothing was done to change the contract until the past four weeks.