The Massachusetts Department of Transportation stacked the deck in favor of a single company when it was selecting a towing contractor for the Massachusetts Turnpike in 2013, according to a letter from the state's Inspector General.
The Massachusetts Department of Transportation stacked the deck in favor of a single company when it was selecting a towing contractor for the Massachusetts Turnpike in 2013, according to a letter from the state's Inspector General.
MassDOT's bidding process was flawed in a number of ways, the IG alleged. Members of its procurement team were ill-trained, its scorecard for selecting a towing company did not meet state specifications, its chosen company was allowed to skirt procedures and it excluded or disadvantaged a specific bidder, the letter said.
"Providing preferential treatment to a vendor violates these standards of conduct," the letter said. "Favoritism also undermines companies' willingness to compete for contracts in the future. Moreover, when the favorable treatment brings with it significant financial value to the contractor, it fosters suspicions that the favorable treatment is being or will be reciprocated in clandestine ways by the contractor."
In July2013, MassDOT launched a bid process to award towing contracts across the Mass. Pike. A procurement team, led by MassDOT purchaser Marie Luskin, included both MassDOT employees and Massachusetts State Police troopers who had experience dealing with towing companies.
By April of 2014, following confusion over pricing and changes to the Request for Responses, the bid process had been canceled, and until now existing contracts have continued using temporary extensions.
But during those 10 months, the procurement team allegedly showed "extraordinary favoritism" toward references submitted by Watertown-based Perfection Towing, improperly amended the bid process and allowed state troopers' personal opinions of other bidders to influence the process, the IG wrote.
MassDOT contractually receives 15 percent of regular towing revenues on the Mass. Pike, and procurement team members initially disagreed about what to seek in a contractor -- higher toll fees to better fund the department, or lower ones to make towing cheaper for drivers.
What they did not expect was for Perfection Towing to offer to charge $1 per tow on the easternmost part of the Pike, in hopes of winning additional business at its car repair shop.
"The extremely low bid surprised MassDOT officials, who immediately contacted Perfection to see if the $1-per-tow price was a typographical mistake," the IG's letter said. "Because the RFR required towing companies to give MassDOT 15% of their Turnpike towing revenue, MassDOT stood to make just 15 cents per tow."
For that reason and others, MassDOT amended the request for responses, requiring a tow price between $81 and $90, the state maximum. The IG took issue with the amendment, arguing that rules required the agency to issue a new RFR for such a significant change.
The IG also criticized MassDOT for how it handled its request for references from towing companies. Perfection Towing's references were rated "excellent" despite Luskin, the procurement team leader, not documenting any phone calls to those references. And one of Perfection Towing's written reference letters came from Luskin herself -- a copy of an email praising the company for "outstanding service."
Other competitors were graded more harshly for their references, the IG's letter said.
The IG also suggested that state troopers on the procurement team had allowed their personal bad experiences with Perfection's competitors to color their ratings, despite a requirement that all information used in the bid process be properly documented.
Beyond the bid process, the IG found that MassDOT had been significantly underpaid by towing operators for years. Some operators only paid MassDOT 10 percent of revenues, despite a contractual requirement to pay 15 percent -- a discrepancy that escaped the department's notice, according to the letter.
"Clearly, MassDOT officials did not review the monthly commission statements submitted by their towing vendors to ensure the companies were complying with the contract," the letter said. "The act that two vendors computed the commission rate at 10% was plainly visible on the monthly statements."
MassLive has reached out to MassDOT for comment.