By Adam Pagnucco.
MCPS’s failed electric bus contract, the subject of an Office of Inspector General (OIG) report detailing its “wasteful spending,” is more than just a government procurement gone wrong. It was spawned in a bubbling swamp of criminality, one that produced two guilty pleas. And despite its seamy origins, MCPS plans on renegotiating and renewing it possibly as early as this month.
Why do I say this? This is not the whisperings of midnight conspiracy theorists, folks. It is all laid out for the public to see in a set of fact findings by the Appellate Court of Maryland.
In an opinion filed in March 2024, the court laid out the process by which this $168 million contract was awarded four years ago. The two key figures in these events were MCPS Department of Transportation Director Todd Watkins and Assistant Director Charles Ewald. They were two of the four evaluators who were charged with scoring the bids for MCPS’s electric bus RFP. Additionally, Ewald was the “project contact” for the RFP.
Both of these men are admitted criminals.
At the time, Watkins and Ewald had engaged in a specific arrangement with MCPS’s diesel bus vendor, American Truck & Bus (ATB), that would later result in their criminal guilty pleas. According to the appellate court’s opinion, Watkins “arranged for ATB to hold reimbursements due to MCPS in an ‘off-the-books account’” and Ewald “exploited his relationship with ATB and its president to misdirect payments from that account to himself.” The result was that Ewald stole over $320,000. The court stated that the two men “deliberately violated MCPS financial and procurement protocols,” setting the stage for the resulting corruption. In 2023, Ewald pleaded guilty to one count of felony theft and one count of misdemeanor misconduct of office and was sentenced to five years in jail. Around the same time, Watkins pleaded guilty to one count of misdemeanor misconduct of office and was sentenced to three years of probation and 200 hours of community service.
State’s Attorney John McCarthy called the theft by Ewald “one of the worst financial crimes to ever victimize Montgomery County Public Schools.”
What does this have to do with the electric bus contract? After MCPS issued the electric bus RFP, four bidders submitted proposals. One of them was Highland Electric Trucking (HET), which according to the Appellate Court of Maryland, “shared the address of MCPS’s existing diesel bus vendor, American Truck & Bus (“ATB”).” The court drew a direct line between Watkins’s and Ewald’s dealings with ATB and their participation in awarding the electric bus contract to Highland:
As the Ewald and Watkins Proffers detailed below establish, both public officials had extensive dealings with ATB, while managing the DOT’s diesel bus fleet operations under ATB’s long-term contract with MCPS. In turn, their official misconduct in those dealings, ranging from deliberate disregard of MCPS procurement and financial protocols, to theft by fraud, created incentives to favor an ATB-affiliate in the procurement process for the electric bus program.
The court went on to describe how Watkins and Ewald gave their highest scores to ATB affiliate Highland while assigning much lower scores to a competitor, AutoFlex Fleet, Inc. The court cited “undisputed evidence that Mr. Ewald and Mr. Watkins were integrally involved in the procurement process resulting in MCPS selecting an apparent affiliate of the exploited bus vendor as the winning bidder on the electric bus contract.” Highland got the contract. Two and a half years later, Watkins and Ewald were pleading guilty to criminal charges stemming from their relationship with Highland’s affiliate, ATB.
It’s important to note that the court’s opinion did not accuse ATB or Highland of wrongdoing. References to criminality apply to the two MCPS officials and not to the companies. In fact, the court characterizes the MCPS officials as “exploiting” ATB.
Highland proceeded with the contract and the results turned out badly for MCPS. The Office of Inspector General’s report details delays in electric bus deliveries and mechanical problems with the buses that were delivered, forcing MCPS to order 90 diesel buses instead. Highland now owes MCPS $1.5 million in performance fees and there is doubt as to whether MCPS will collect those fees.
So why did the Appellate Court of Maryland get involved? AutoFlex, one of the losing bidders, challenged the contract award in circuit court. In its filings, AutoFlex asked the circuit court to consider later media reports of MCPS suspending Watkins and Ewald. The circuit court refused to consider the media reports and upheld the contract, causing AutoFlex to appeal to the Appellate Court of Maryland. The Appellate Court of Maryland then found in AutoFlex’s favor, ruling that the revelations of criminality by Watkins and Ewald could be considered in deciding whether the contract was properly awarded. The appellate court remanded the case to the circuit court with instructions to remand to the Maryland State Board of Education and then to the Montgomery County Board of Education, which would then consider AutoFlex’s challenge.
In June, the Maryland State Board of Education complied with the court’s instruction and remanded the contract challenge to the Montgomery County Board of Education.
Let’s connect the dots. Two of MCPS’s four electric bus contract evaluators, one of whom was the project contact, have pleaded guilty to criminal conduct exploiting a corporate affiliate of the winning bidder. That winning bidder has performed so poorly that it owes MCPS $1.5 million and forced MCPS to procure more diesel buses. One of the losing bidders has a pending contract challenge that has gone up and down through the court system and produced an absolutely damning opinion by the Appellate Court of Maryland. And now the county school board has been directed by that same court to decide on the contract challenge.
So has MCPS frozen this contract pending its decision on whether it was properly awarded (in part by two admitted criminals)?
No.
Instead, MCPS representatives told the county council that they are renegotiating the contract and may not even collect the poor performance fees owed by the contractor!
I have written more than 5,000 columns about Montgomery County and Maryland since 2006. In all that time, this is one of the most appalling stories of corruption and mismanagement I have ever encountered.
This contract is the first test of the young tenure of Superintendent Thomas Taylor. The circumstances of this contract’s awarding are marred by admitted criminality. The county school board has now been instructed by the Appellate Court of Maryland to decide on a challenge to the contract. There are moral, ethical and perhaps even legal factors at play here. And if the contract is renewed despite all of the above, MCPS’s message to the community will be this:
“It’s OK for admitted criminals to award a $168 million contract funded by your money. It’s OK for such a contract to produce poor performance lambasted by the county’s inspector general as ‘wasteful spending.’ And now we are going to renew it even while one of its contract evaluators who was also the project contact sits in jail.”
Dr. Taylor, you must stop this renegotiation now.