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MV transportation loses contract bid: awarding practices spark federal investigation.

A federal investigation is probing whether a multimillion-dollar government contract recommended for a BE 100s company but awarded to a white-owned firm--at a higher cost--was a case of bid-rigging.

Last November, Springfield, Massachusetts-based Pioneer Valley Transit Authority, one of the largest transit authority agencies in the Northeast, awarded a $28 million, three-year contract to provide elderly and handicapped transportation services to Hulmes Transportation Inc., a transportation services company based in Belchertown, Massachusetts. This contract was awarded despite a lower bid of approximately $26.5 million by MV Transportation Inc. (No. 11 on the BE INDUSTRIAL/SERVICE 100 list with $373.49 million in sales). The deal would have netted MV a $1.8 million profit.

Hulmes received the contract despite a recommendation by PVTA chief counsel Kevin Walkowski that some or the entire contract be awarded to Fairfield, California-based MV Transportation.

Walkowski's report detailed how awarding the contract to MV Transportation Would save the agency approximately $4.5 million in excess auto insurance costs over the three-year term of the contract. The recommendation was reportedly dismissed by then-PVTA director Gary Shepard, and the contract went to Hulmes Transportation with two other vendors, Valley Opportunity Council and Massachusetts Service for Seniors, also receiving a portion of the deal.

In late December, federal officials raided the corporate offices of PVTA and Hulmes to investigate a possible bid-rigging scheme between the two firms. Shepard was suspended by the PVTA board and Walkowski was later suspended by Shepard's replacement, reportedly a Shepard recommendation. Federal authorities demanded that the contract be rescinded and new bids submitted.

Jon Monson, president of MV Transportation, says his company will submit a new proposal and hopes to land the contract with the PVTA--which would be the first major transit contract for the company in the state of Massachusetts.

"I think it's unfortunate that federal authorities had to get involved in order to assure that legitimate bids are submitted, reviewed, and awarded fairly to the vendor with the best proposal," says Monson. "Perhaps this time we will prevail and be allowed to help PVTA improve its transit services for the community."
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Author:Townes, Glenn
Publication:Black Enterprise
Geographic Code:1USA
Date:Jul 1, 2006
Words:351
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