- The Washington Times - Tuesday, January 8, 2002

D.C. Council members Kathy Patterson and Sharon Ambrose yesterday said an independent investigation should be conducted into irregularities in the Metropolitan Police Department's $3.6 million vehicle maintenance contract.
The Washington Times reported yesterday that a recent General Services Administration (GSA) audit of the contract found that top police officials have been aware that a private contractor has been overbilling the department for vehicle repairs. Auditors also found that police officials made changes to the contract that favored the contractor Serco Management Services Inc. but required contract modifications were not made.
"If the audit is accurate, it raises serious questions about the business management at [the department]," said Mrs. Patterson, Ward 3 Democrat and chairman of the Judiciary Committee, which oversees the police department. "It is an issue that needs to be looked at."
Mrs. Ambrose, Ward 6 Democrat and a Judiciary Committee member, said the D.C. inspector general should examine the police department's contract with Serco because city and federal contracting laws apparently have been violated.
The GSA audit by Bert Smith & Co. reported that Serco increased labor charges to the police department without proper authority and that the department provided performance bonuses to Serco for $28,000. The auditors said Serco did not deserve the bonuses because the company had never established performance criteria.
In addition, the department allowed Serco to change the contract to making preventive maintenance repairs mainly oil changes every five months rather than every three months.
Eric Coard, chief executive officer of corporate support, and Brender Gregory, director of business services, directly oversse the department's maintenance contract. Antonio Rouse, manager of the department's fleet of vehicles, was hired in July; the audit focused mainly on the time since 1999, when Serco was hired and before Mr. Rouse assumed control of the fleet.
Metropolitan Police Chief Charles H. Ramsey said yesterday police officials are working on a response to the audit, and that it appears there were major management problems that can be resolved. He said Friday he does not intend to reprimand or fire any of his managers.
"There are a variety of things that need to be addressed. There are some things written that we don't agree with," Chief Ramsey said. "We have some problems there. We are looking to bring some strong management there."
He said the GSA audit is similar to a Dec. 17 audit by the D.C. inspector general that found there was inadequate oversight of the Serco contract. He said some of the issues brought out by the inspector general already have been resolved.
Because the audit criticizes top managers, it might be best to have the department's Office of Professional Responsibility look into the matter, the chief said.
The department has taken steps to improve management of fleet operations with the hiring of Mr. Rouse as fleet manager, he said.
Mrs. Ambrose said the police department had defended the contract since it was issued in 1999, but she had always felt the city was not getting the service it was paying for.
"It did not make sense to go with this contract. It was so expensive. The folks on the inside [of the department] said this was way too expensive, but everyone ignored them," she said.
The Metropolitan Police Department enlisted the GSA to contract with a private company for provide vehicle repairs in 1999 because it felt repairs could be done more cheaply with a private company.
But as soon as Serco began making repairs Nov. 1, 1999, it began charging more, the audit said. The audit shows that between Oct. 13, 1999, and May 26, 2000, Serco was given five price increases, which were authorized by contract modifications.
At the time the police department began paying Serco more money, it began experiencing cost overruns beyond the $3.6 million budget. Mr. Coard said the cause for the overruns was that the contract was "underfunded."
Among the biggest discrepancies found in Serco's billing was that the company did not "adhere to labor industry billing rates," as the contract required. The auditors found that Serco used a rate that increased the police department's costs.
The auditors did not provide details of the difference between the two labor rates, but a police department source said the costs are about 25 cents higher per hour, or about 5 percent to 8 percent higher than the contract stipulates.
"No written modification addressing this change was signed by GSA," the audit said.

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