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12.28.2005: Monroe Bus Corp.

CITY OF NEW YORK

OFFICE OF THE MAYOR

OFFICE OF CONTRACT SERVICES

DECISION OF THE CITY CHIEF PROCUREMENT OFFICER

Application for Declaration of Rehabilitation

from

Monroe Bus Corp.

By letter dated November 28, 2005, Monroe Bus Corp. (“Monroe”) applied to the City Chief Procurement Officer (“CCPO”) for a Declaration of Rehabilitation pursuant to §2-08(p) of the Procurement Policy Board rules.

Monroe provides charter bus services and has been incorporated in the State of New York since January 29, 1985. Monroe has been doing business with state and local government for many years. Its principal executive office is located at 60 Nostrand Avenue, in Brooklyn, New York. Herman Freund is president and owns 100% of the business.

DOC’s Non-Responsibility Determination

By letter dated August 27, 2004, the Agency Chief Contracting Officer (“ACCO”) for the New York City Department of Corrections (“DOC”) determined that Monroe was a Non-Responsible bidder for the award of a requirement contract for bus transport of sentenced inmates between Rikers Island and Ellenville and Fishkill, New York. The ACCO based his determination solely on poor performance evaluations (Unsatisfactory: 10/16/01, Unsatisfactory: 7/27/02, Unsatisfactory: 7/27/03) issued by the New York City Police Department (NYPD) for Monroe’s performance on an NYPD contract (contract term: 7/1/00-7/3/03) to provide bus services for the NYPD’s Summer Youth Program. At no time was Monroe’s business integrity at issue.

NYPD Performance Evaluations

The primary issue regarding Monroe arises out of a contract between Monroe and the NYPD entered into on July 28, 2000 (date registered in FMS) to provide bus services for the NYPD’s Summer Youth Program (“Contract”).

The Contract required Monroe to provide charter buses for both in-city and out-of-city after school programs. The charter buses were to be clean and have properly functioning doors, windows, air conditioning and toilets. The buses were also not required to stay with the passengers during the day.

At some point during the three-year term of the contract the relationship between Monroe and the NYPD began to deteriorate.

Monroe claims that a dispute began with the first NYPD invoice dated May 19, 2000, for the summer trip to Aqueduct Raceway, which contrary to the terms of the Contract, required the buses to stay at the raceway. Monroe claims that it told the NYPD that it could only stay at the site if it provided school buses and that the NYPD agreed to these new terms. NYPD’s agreement to receive school buses for in-city after school trips is supported by the fact that the NYPD wrote a letter to Monroe noting “that the use of school bus type vehicles will suffice for summer day trips and fall/winter/spring after school trips.” (See letter, dated February 20, 2001, from St. DelSardo to Mr. Freund). Monroe, being in the business of providing only charter buses subcontracted the work. Monroe also claims that the first invoice required them to provide seventy buses—more than the maximum number of buses agreed to in the Contract. This issue was subsequently resolved by the NYPD agreeing to receive sixty buses—the maximum allowed under the Contract.

According to the NYPD, the relationship deteriorated after Monroe had been providing charter buses for approximately a year, when suddenly, in direct violation of the Contract, Monroe said that it couldn’t provide the volume of charter buses needed by the NYPD because it was too expensive. NYPD also claims that when Monroe did supply charter buses they were old and run-down and the air conditioning didn’t work. Monroe’s refusal to provide charter buses for in-city after school trips and its submission of late bills, showing up late for pick-ups and poor organization lead the NYPD to issue Monroe three unsatisfactory performance evaluations. (See performance evaluations dated 10/16/01, 7/27/02 and 7/27/03).

By letter dated March 25, 2002, counsel for Monroe sent the NYPD a letter objecting to the unsatisfactory ratings and the comments on the 10/16/01 performance evaluation that Monroe failed to provide buses with air conditioning and toilets. After receiving no response from the NYPD, counsel for Monroe, by letter dated April 29, 2002, sent a follow-up letter concerning the negative performance evaluation. NYPD responded by letter dated May 14, 2002, in which it stated, among other things, that the basis stated in the comments (namely, Monroe’s failure to use coach buses—with air-conditioning and toilets—as required in the Contract) was not the only or even a primary reason for the unsatisfactory rating that Monroe received.

By letters dated September 29, 2003 and October 1, 2003 counsel for Monroe raised objections to subsequent unsatisfactory ratings.

Notwithstanding the disputes between Monroe and the NYPD and its alleged reasons the primary issue here is what corrective actions must Monroe take in order to perform effectively and responsibly on future contracts, especially those it may subcontract.

DOC’s Performance Evaluations

Monroe had already taken a series of actions to improve its business practices since receiving a less than satisfactory performance evaluation in 1998 on a DOC contract to transport inmates to state facilities.

These actions included:

• Adding three full time employees and increasing its office staff by hiring five additional people.

• Increasing its fleet from twenty to thirty-five coach buses so as to utilize its own coach buses and seldom subcontract.

• Hiring fifteen additional qualified drivers.

• Establishing three shifts of dispatchers thus enabling it to move from a twelve-hour dispatch system to a twenty-four-hour system.

• Adding six additional skilled mechanics (for a total of eight) and an expert technical supervisor to thoroughly inspect all buses prior to each departure and ensure the success of all trips.

• Increasing the number of hydraulic lifts in its repair yard from one to four and the number of repair bays from one to eight to assist the company in keeping its fleet at full operational level and in perfect condition.

In the years since 1998 Monroe has continued to provide bus services for both City and the State contracts. Monroe’s commitment to quality assurance and enhancing its performance level is ongoing. We note that Monroe has submitted reference letters to the Mayor’s Office of Contract Services from certain government agencies, which attest to this commitment as well as its better than satisfactory performance on contracts with these agencies. These agencies include the New York City Human Resources Administration, the New York City Housing Authority, the New York State Department of Parks and Recreation and the New York State Department of Correction, with whom Monroe has done business for over ten years.

Monroe’s Actions since the Non-Responsibility Determination

Monroe’s latest performance evaluations (from the NYPD) identified areas—some of which were also previously at issue in the DOC performance evaluation—where Monroe should and will be required to focus more attention and resources to improve business quality and efficiency and address any shortcomings in performance. These categories include:

• timeliness;

• conformance and quality of deliverables;

• ability to communicate findings and recommendations;

• cooperation with City agency staff and responsiveness to agency requests;

• provision of level, volume and frequency of services required by the contract;

• technical and professional quality of services; and

• adequacy of physical facilities and equipment.

Monroe now understands that the NYPD has had issues with its performance and therefore has committed to take the following additional measures to address the issues presented:

• Ensure that it has the capacity to fully perform a contract on which it bids at the price it bids and according to all contract specifications and not bid on a project that is beyond its capacity, including financially and operationally, to perform successfully.

• Ensure that its subcontractors have the capacity to fully perform the contract, which Monroe may decide to subcontract, including by conducting a careful

inspection of its subcontractors’ buses sufficiently in advance of every trip so as

to ensure that the buses from the subcontractor conform to contract specifications.

• Regularly check its fleet to ensure that its own coach buses are kept and maintained in a condition, which meets the quality expectations of the contracting government entity and conforms to the contract specifications.

• Implement measures to ensure the timely submission of bills to the contracting government entity.

• Train staff to document all communications with clients and to preserve all paperwork pertaining to Monroe’s performance on its contracts.

Because Monroe has agreed to address its weaknesses as previously identified in the NYPD’s performance evaluations, in an appropriate manner, I find that it is a suitable candidate for a declaration of rehabilitation.

In addition, the NYC Department of Investigation, which was consulted on the application pursuant to PPB Rule § 2-08(p)(5), reviewed the circumstances surrounding NYPD’s decision to give Monroe the unsatisfactory evaluations and conducted a background check of Monroe, and determined that Monroe does not have any business integrity issues that should preclude it from being declared rehabilitated.

Declaration

I have determined Monroe Bus Corp. has given adequate assurances that it will address the issues that gave rise to the caution listed in the VENDEX cautionary database based on the following reasons:

1. Monroe has agreed to abide by new directives and implement new procedures to

improve communication, workflow and its general business practices.

2. Monroe has agreed to implement new procedures in order to strengthen its

company’s business operations when dealing with subcontractors.

Therefore, I declare that Monroe is rehabilitated pursuant to PPB Rule § 2-08(p). Monroe certifies under penalty of perjury in its Application for Rehabilitation that no other issues have arisen that would adversely affect its responsibility. Pursuant to the New York City Administrative Code, this Declaration of Rehabilitation will be reflected in the VENDEX database.

Decision by: Dated:

__________________________ ____________

Marla G. Simpson

Director, Mayor’s Office of Contract Services

City Chief Procurement Officer

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