State threatens action as dispute over Mobility service escalates

Flanagan says payments to firm may be withheld

April 09, 2004|By Michael Dresser | Michael Dresser,SUN STAFF

A long-running dispute between state Transportation Secretary Robert L. Flanagan and a contractor that provides van and taxi services to the disabled escalated yesterday as Flanagan said he would begin withholding part of the firm's payments if service does not improve.

Flanagan said the Maryland Transit Administration halted negotiations on a possible three-month contract extension with Yellow Transportation Inc. and will stop doing business with the company July 1. He said Yellow's service had deteriorated significantly in recent months.

"We have reached the point where we believe it is an emergency situation," Flanagan said.

His statement brought a sharp response from Yellow, which accused the Transportation Department of "making this Maryland company the villain in the problems they have been unable to solve."

Yellow provides 85 percent of the rides given to about 2,300 Baltimore-area disabled people each day as part of the state's Mobility service. MTA employees provide the remaining 15 percent of the rides.

The state and Yellow are locked in a bitter fight before the Board of Contract Appeals over the MTA's decision to replace the company with MV Transportation Inc. and Laidlaw Transit Services Inc.

Yellow has been operating under a contract extension while the matter is under appeal to the board, which has held hearings but not announced a decision. The hearings produced evidence of numerous improper contacts between MTA officials and officers of Yellow's rivals during the bidding process.

Flanagan has maintained that while "mistakes" were made during the procurement process, they didn't affect the outcome of the award.

The secretary told the Board of Public Works yesterday that the Transportation Department has signed emergency contracts with MV and Laidlaw authorizing them to prepare to provide service starting July 1.

MTA figures show that Yellow's on-time pickups have been hovering around 80 percent in recent months, while MTA's own service has been running at about 90 percent to 95 percent.

Ronald J. Hartman, Yellow's executive vice president, said the company's on-time performance has slipped from the mid-80s to low 80s in recent months but he said the main reason is the difficulty of keeping and recruiting drivers with the company's contract just months from expiration.

In a March 24 letter, Flanagan informed Yellow that he would begin enforcing a contract provision allowing the department to withhold payments if it fails to achieve an on-time standard of 90 percent.

Mark Joseph, Yellow's president, has said 90 percent is "unachievable" under Mobility's current structure. He said past transportation secretaries have recognized that and made oral agreements not to assess damages.

Joseph also disputed MTA's figures, saying the agency has overstated its own performance while underrating Yellow's. He said that if the Transportation Department begins withholding payments, the matter will likely end up in court.

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