Feb. 17--Two firms appealing the award of a three-year, half-billion-dollar Milwaukee County transit contract to Dallas-based MV Transportation have made last-ditch arguments claiming bid improprieties, in advance of Tuesday's hearing on the issue.
MV lowballed its bid price for administrative costs, burying some $20 million in management costs as part of its operations costs, according to briefs filed by Milwaukee Transport Systems and Veolia Transportation.
That error resulted in MV winning the competition for running the transit system for about $164 million a year, according to MTS and Veolia. The deal would come to nearly $500 million for the three-year base term of the contract.
MV said it would spend $8.6 million on administration, while MTS listed its management price at $19 million. Veolia's was $29.6 million.
MTS and Veolia are seeking to have the county either rescore the transit bids it received from five firms or start a new bidding process.
County officials have defended the selection of MV as fair and said the firm would be held to its low management price.
An administrative appeal on the contract award will be heard by a special panel of county supervisors.
MTS is the nonprofit company created in 1975 to run the county transit system and is the only operator the county has had since then. Veolia is part of a large French firm.
MV charges far more for administration on other contracts it has elsewhere and would likely seek extra money once it has the contract, according to an MTS appeal brief.
MV persuaded Santa Clarita, Calif., officials to raise its administrative fee by $750,000 in 2009, a year after it won a bus contract there, according to MTS.
A 2010 article in the Santa Clarita Valley Signal newspaper said MV had complained to the city that the company had underbid its contract and was losing money. A Santa Clarita city spokeswoman did not return a call Tuesday.
MV won't plow savings from administration into expanding bus routes here, as the county transportation department has said, according to Veolia.
Instead, more will be shifted into profits for MV, Veolia's appeal brief says.
MV officials have said they'll honor the contract.
Both MTS and Veolia also faulted the county for allowing only MV to amplify its bid with answers to 22 questions. That provided an impermissible advantage to MV, the losing bidders said.
They also challenged the county's contention that the 22 questions were part of contract negotiations after the county had notified the firm it had won the bid competition.
If the county hasn't completed the transit contract by April 1, the county will take steps to manage the Milwaukee County Transit System itself, according to a measure included in the 2014 county budget.
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