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Baltimore continued to use towing vendor after probe showed $129,000 in overbilling, no contract, report finds

A towing company accused of overcharging Baltimore continued to work for the city throughout 2020 despite the expiration of its contract, the city’s Office of the Inspector General has found.

The vendor, who was not named in an OIG report released Tuesday, was supposed to have its contract with the city expire in December 2019.

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Instead, city officials first extended the contract via a change order until March 31, according to the OIG. Since then, Baltimore has had the company do work “out-of-contract,” the OIG found.

In November, the city’s Department of General Services requested a $96,096 payment to the contractor. That payment request was made in spite of another OIG report in September, detailing $129,521 that was overbilled to the city by the same vendor for items and services not authorized under its $1 million contract. Bills were padded with items including “labor” and “administrative fees” in violation of the contract’s terms, the OIG said at the time.

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Additionally, the vendor did not meet requirements to share proceeds with women and minority owned subcontractors, the latest OIG report found. The vendor was required to provide the city with evidence of payments to such subcontractors with revenue generated from the contract. A review for April 2015 through January 2020 found the vendor to be noncompliant.

In her report, Baltimore Inspector General Isabel Mercedes Cumming wrote that the city Board of Estimates approved the unnamed company’s contract in December 2014.

The board’s agenda for Dec. 24, 2014, includes a $1 million contract with The Auto Barn Inc. as the city’s primary tow operator. That same contract was the subject of the September OIG report.

An Auto Barn representative who answered the company’s phone Tuesday said officials would have no comment.

Following the September report, Department of General Services Director Chichi Nyagah-Nash said a city employee was fired as a result of the findings.

In a Dec. 21 response to the latest report, Democratic Mayor Brandon Scott’s office defended the continued use of the vendor, arguing it was necessary to “ensure the continuity of operations.”

“The city lacks the resources (equipment and personnel) to be able to perform all the towing services provided by contracted vendors and without these services not only would the operations of agencies such as Fire, Police, DPW [Department of Public Works] and DOT [Department of Transportation] be significantly hampered, the risk to equipment being damaged due to not being quickly retrieved from break-down locations also had to be weighed,” wrote Daniel Ramos, Scott’s deputy chief administrative officer.

Ramos said the Department of General Services has been working with the Bureau of Procurement over several months to prepare bid documents to search for a new contractor. That bid solicitation should be advertised within the next few weeks, Ramos said.

The report is the latest in a series to highlight mismanaged contracts by the Fleet Management Division of the Department of General Services.

In July, Cumming issued a report finding the division overpaid by $160,000 another contractor accused of inflating bills for snow plows and services to city vehicles. An attorney for the contractor, Holabird Enterprises of Maryland Inc., denied the allegations, and the city and company are suing each other.

The longtime chief of the fleet division, Robert W. Gibson, left city employment last year. Gibson cashed out his unused vacation, sick time and personal days for about $373,000 in compensation, making him the highest-paid city employee for the fiscal year that ended June 30.

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