By Adam Pagnucco.
Montgomery County Inspector General Megan Davey Limarzi has found “wasteful spending” in MCPS’s electric bus contract. The bus contract was initially lauded with praise two years ago, but problems in its administration led MCPS to buy more diesel buses, a reversal criticized by environmentalists. Limarzi’s memorandum of investigation sheds light on what went wrong.
The inspector general begins:
*****
The Office of the Inspector General (OIG) recently concluded an investigation into Montgomery County Public Schools ‘ (MCPS) management of a contract valued at over $160 million to acquire and operate 326 electric school buses. The investigation substantiated that all of the buses received during fiscal years (FYs) 2022-2024 were delivered beyond the contractually required delivery date. We note that the contractor has notified MCPS that they will not be able to deliver the full complement of buses expected in FY2025. We also found that mechanical failures with many electric buses rendered them inoperable for extended periods and that MCPS did not exercise contract provisions to force the contractor into compliance or penalize them for noncompliance. We estimate that, in addition to other possible actions. MCPS should have assessed the contractor approximately $372,000 for failing to provide serviceable buses between FYs 2022 and 2024. Furthermore, MCPS is spending over $14 million to acquire diesel buses to compensate for not receiving the anticipated electric school buses.
*****
Under the contract, the vendor retained ownership of the buses and provided “their use as a service to MCPS.” The inspector general wrote:
*****
At a ribbon cutting ceremony in October of 2022, the then superintendent of schools claimed that when all 326 electric buses were procured, “we are going to be saving upwards of 6,500 gallons of diesel fuel per day, and immediately, this is going to cut costs by 50%.” MCPS’s webpage further states that the “school district is on track to have 326 electric school buses by 2025 and an entirely electric school bus fleet in 10 years. Replacing the diesel bus fleet with electric buses brings MCPS one step closer to our pledge of cutting greenhouse gas emissions by 80% by 2027 and 100% by 2035.”
*****
Former Superintendent Monifa McKnight. Photo credit: Electrek.
But the contractor fell behind on deliveries, causing MCPS to resort to extending the lifespan of its existing diesel buses and also to purchase more of them. That provoked this extended and unusually harsh rebuke from the inspector general:
*****
MCPS’ Financial Manual defines waste as “the extravagant, careless, or needless expenditure of MCPS funds, or the consumption of MCPS resources that results from deficient practices, systems, controls, or decisions.” MCPS’s failure to hold the contractor accountable to the terms of the contract and their decision not to include provisions to offset incurred expenses has led to millions of dollars in wasteful spending.
Maintenance of Buses
MCPS also did not assess the required fees per the agreement for mechanical failures. Mechanical and/or charging infrastructure issues resulted in buses not being able to run routes on more than 280 instances from February 10, 2022, through March 31, 2024. In more than 180 of those instances, repairs were not completed within the five working days (averaging 13 days per bus) allowed by the agreement before a fee equal to S100 per bus per day would be assessed. The OIG confirmed that MCPS bas never assessed the contractor any fees related to the unavailability of electric buses due to mechanical or charging infrastructure issues. The OIG calculated that MCPS should have assessed the contractor $372,100 in related fees.
During the OIG’s interviews with members of MCPS management, none of them could explain why this fee was not assessed. Furthermore, the OIG learned that newly negotiated terms will likely eliminate the fee altogether in a future contract amendment.
*****
At the time it was announced, the electric bus contract looked like a big success for MCPS. Now, the inspector general has revealed that incompetent contract administration has made it a notable failure.