Open Bus Contract Bid Goes Before The School Board

By Eliza Hallabeck

Following the school district’s announcement of an upcoming bid for transportation services for the 2012-13 academic year, school district Business Director Ronald Bienkowski spoke to the school board during its meeting on Tuesday, June 7, regarding the bid.

Newtown’s students are currently transported by both owner-operators, individually contracted bus drivers, and MTM Transportation Inc, a local fleet operator that specializes in special needs students and out-of-district transportation. Mr Bienkowski said at Tuesday’s meeting that the owner-operators’ contracts will be up for the 2012-13 school year.

Forms for bid, certification, conditions, and specifications were made available at the district offices on May 31. Bids will be received until 2 pm on June 23, at which time and place all bids will be publicly opened. Mr Bienkowski said he hopes to have final bids to bring before the Board of Education for its first meeting in July.

Mr Bienkowski said the overall transportation budget represents the district’s third largest budget item, following salaries and benefits. He also said the district is obligated to put contracts that exceed $30,000 out for bid, and the owner-operator contract exceeds that limit.

 The owner-operator contract was last approved by the school board in 2007, for five years. The MTM Transportation contract is separate and was last approved in 2009, also as a five-year contract. Following the meeting, Mr Bienkowski specified a possible change in the contract would not affect the 2011-12 school year for students transported by owner-operators, because, whichever company or owner-operator system receives the bid, it would take effect for the 2012-13 school year.  

Changing the transportation contract away from the owner-operator system to a single transportation company, Mr Bienkowski said at the meeting, could save an estimated $500,000 each year of the new contract, depending on the submitted bids. Mr Bienkowski projected the cost savings using daily rates provided by local fleet operators in 2009, when MTM Transportation’s contract last went out to bid. In 2009 the daily rate for an owner-operator was $376. Companies that bid on MTM’s contract estimated a potential daily cost of $290 by All-Star Transportation, $312 by First Student, $313 by Student Transportation of America, $326 by MTM Transportation, and $441 by Baumann and Sons. Mr Bienkowski explains he used projected rate increases through 2014 provided by those companies to compare the cost of the owner-operator system to the local fleet operators to arrive at the potential $500,000 a year savings.

“I think what we learned last time is there are better deals out there,” said Mr Bienkowski.

After the school district merged with the town last year to offer self-insurance coverage for town and district employees, Mr Bienkowski said this is the last area in the budget he sees that could supply a structural change with cost savings. Mr Bienkowski said other companies that bid on the transportation contract could offer significant potential savings for the school district.

He said deciding who or what company to hire to manage the district’s transportation services should not be about feelings or politics.

“Certainly if any of our owner-operators are not in the running, I’m sure they could be hired by a potential bidder,” said Mr Bienkowski.

Board of Education Vice Chair Debbie Leidlein questioned what a performance bond was and why it was added to the bid announcement for the contract.

A performance bond, Mr Bienkowski explained, requests an insurance provider underwrite a submitted bid on a large contract to guarantee the contractor performs the specified services.

Ms Leidlein said the bid specifications could eliminate the current transportation system, “which is beloved in our town,” and asked why the owner-operators would be asked to provide the performance bond.

“This is a different approach to transportation in Newtown,” said Mr Bienkowski. “The goal here is to have a single contract, not multiple contracts. There is less risk for the Board of Education and the town if we have a single vendor providing these types of services rather than 31 individuals providing these types of services.”

Mr Bienkowski also said the owner-operators could collaborate to pool their individual resources to apply for the contract “without much of a problem.”

Changing from the owner-operator system to a single vendor, Mr Bienkowski said, would be structural change that would not effect people in the classroom.

“I think this affects every child that rides a bus,” Ms Leidlein countered.

Board of Education Chair William Hart asked whether the school board could reject the bids submitted and put the contract out to bid again without the performance bond, but Mr Bienkowski said doing so could taint the bidding process.

One of the six to seven vendors who have expressed interest on the bid already, Mr Bienkowski said, asked whether the bid process was all for show, knowing what occurred during the last two times the contract was put out to bid.

The Board of Education will review bids submitted for the contract during its first meeting in July, currently scheduled for July 12.

Former First Selectmen Object

As one of the public participation speakers at the start of the meeting, former first selectman Joe Borst reminded the school board that any outside transportation contractor would need to acquire property to house buses in the district. The owner-operators now keep buses either at their homes or in other areas around town where they are allowed to park.

Mr Borst and multiple other public participation speakers voiced support for former first selectman Herb Rosenthal’s comments. Mr Rosenthal and Mr Borst both said their families have been transported by owner-operators over the years.

Mr Rosenthal read from a letter he wrote to the school board, saying he worked on three bus contract renewals during his 14 years as a Board of Education member. He looked into the matter with insurance carriers who considered the owner-operators as independent contractors and required carefully worded contracts.

“In addition, I have looked into this issue and you can waive the requirement for a performance bond for our owner-operators,” said Mr Rosenthal, “as it may be cost prohibitive for them individually, while still requiring it for a new bus company.”

He also urged the school board to reject a consultant’s report provided to the district in January that said the owner-operators are not independent contractors.

“I contacted Dr Robinson and told her that if the Board of Education accepts this report and endorses their conclusions, you will be exposing the town of Newtown to serious liability,” Mr Rosenthal said. “Particularly if you use their recommendation as a reason for ending the owner-operator system, owner-operators could bring suit for damages to recover half of the self-employment taxes they have been paying for social security over the years as well as other employee benefits they have not received.”