Friday, April 7, 2017

Colorado Springs' fleet contractor lost money, calls for 22 percent price increase

Posted By on Fri, Apr 7, 2017 at 1:01 PM

click to enlarge The city's police cars are among those serviced by Serco, Inc., under a five-year contract. - FILE PHOTO
  • File photo
  • The city's police cars are among those serviced by Serco, Inc., under a five-year contract.
In this week's issue of the Independent, we report that then-Mayor Steve Bach's grand idea to outsource the city's fleet maintenance work to save money is on a collision course of sorts.

Not only has the city not saved the money it expected so far, but there have been some performance problems as well.

The five-year contract is held by Serco, an international giant based in the United Kingdom. Serco says it's lost $1.4 million in the contract's first three years and wants a 22 percent increase in contract price for 2017, the contract's fourth year.

The city isn't obliging, and Serco filed a lawsuit recently.

Serco, it turns out, has had some problems before. A few examples:

In 2006, the Forest Service cancelled a contract. According to a report on a union website:
On May 1, 2006, the Forest Service terminated for default its Region 5 fleet maintenance contract with Serco Management Services, Inc. This will affect how the agency's California fleet, including specialized fire-fighting equipment, will be serviced.

The California fleet maintenance work was originally outsourced to Serco as part of President Bush's competitive sourcing initiative. Recently, the Forest Service Washington Office reported that this generated $1.7 million in estimated savings in fiscal year 2005. However, a Region 5 investigation in early 2006 found that Serco was chronically behind in accomplishing work, and that shoddy work had placed our employees and the public in general in unsafe situations. In Sacramento, 14 of 25 Serco-serviced fire engines were removed from service for critical safety issues.
The city of Dallas reported that while it saved more than expected, Serco had problems meeting the vehicle availability requirements.
Serco has only met the fleet availability requirement for 81 of 171 workdays, or 47% of the time. After various meetings with Serco, in June 2006, the City had Serco submit a plan to meet the 90% fleet availability contract performance. Fleet availability has improved but continual improvement is needed. While the contract provides for overall fleet availability requirements, further analysis showed significant differences in the fleet availability based on the specific types of equipment. Nevertheless, the Sanitation Department advised us they were satisfied with Serco’s service and that Serco’s inability to achieve the fleet availability requirements has not interrupted service to citizens. 

Both of those cases date back 10 years, and things could have changed since then. So we asked Serco for a comment about those contracts and will circle back when we hear something.

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