The Metropolitan Police Department is reviewing bids for its vehicle maintenance contract, including one from a private company that has overbilled the department for vehicle repairs and received performance bonuses it did not earn.
Serco Management Services Inc. is one of three car maintenance firms to bid on the police department contract, which police sources said will likely pay between $4 million and $5 million a year.
In violation of a $3.6 million contract with the department in 1999, Serco has increased labor charges without proper authority, changed the contract to perform preventive maintenance less often and received $28,000 in performance bonuses without establishing performance criteria, according to a recent General Services Administration (GSA) audit.
The Washington Times first reported about the GSA audit on Monday.
“Serco should not be bidding [on the new contract] because they defaulted on the [old] contract,” said a police source familiar with the contract. “Why would you let someone bid on it if they were [cheating] you? A little common sense has to kick in somewhere.”
Metropolitan Police Chief Charles H. Ramsey said he would allow Serco to bid on the new contract because his top managers had mismanaged the current contract, adding he would recommend Serco receive the contract if it proposes the best offer.
The police department last summer decided to rebid the contract because of Serco’s poor service and overbilling. At that time, Chief Ramsey said he needed to hire another firm after The Times reported that Serco had subcontracted work to the son of one of its top officials, which cost the department almost $100,000.
But the department did not exclude Serco when it advertised for bid proposals from vehicle maintenance companies.
The department also has received bids from First Services, a divsion of Ryder, and SKE of Georgia. Police and city sources said no decision has yet been made.
The Times reported yesterday that D.C. Council members Kathy Patterson and Sharon Ambrose said an independent investigation should be conducted into the department’s mismanagement of the contract and Serco’s performance.
Both council members sit on the Judiciary Committee, which oversees the police department.
Chief Ramsey said Monday that it might be best to have the department’s Office of Professional Responsibility look into the matter, since the GSA audit criticizes top managers in the department.
The Metropolitan Police Department enlisted the GSA to contract with a private company for provide vehicle repairs in 1999 because it believed repairs could be done more cheaply if it used 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 through contract modifications.
At the time the police department began paying Serco more money, it began experiencing cost overruns beyond the $3.6 million budget.
Eric Coard, the department’s chief executive officer of corporate support, 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.