New York City Transit Requests Bus Fuel Contract Review

On Monday morning I blogged about the MTA getting price gouged on their bus fuel contract extension. The new contract extension with long running supplier Sprague Energy Corporation saw the costs to the MTA rise approximately $26 million dollars which is triple what it payed last year. Now on the heels of this news getting out, New York City Transit has asked the MTA’s Inspector General to review the extension. William Neuman of the New York Times has more in this report which will appear in today’s print edition:

New York City Transit has asked the Metropolitan Transportation Authority’s inspector general to review a highly unusual contract that has added millions of dollars to the cost of buying diesel fuel for city buses, officials said on Tuesday.

The transit agency had to negotiate a one-year contract in late August under what it described as onerous terms as it faced the possibility of running out of fuel for its buses.

The transit agency rushed into its agreement, with Sprague Energy, after it had received no bids on a proposed contract to deliver the custom-made diesel fuel it uses, which is designed to minimize pollution.

Bids from Sprague and another company were due Aug. 21, just over three weeks before the previous contract, also with Sprague, was set to expire.

That gave the transit agency little time to find an alternative source, so it chose to negotiate a one-year extension with Sprague — at highly unfavorable terms — according to materials prepared for the authority’s board.

Barry L. Kluger, the authority’s inspector general, said on Tuesday that he had discussed the agency’s concerns about the contract last week with Howard H. Roberts, president of New York City Transit.

Click here for the complete report.

My opinions were posted in the initial entry which I linked to in the first paragraph.

xoxo Transit Blogger

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[…] $26M which was triple what they had paid the previous year. These events led NYC Transit to request a review of their bus fuel contract a few days […]

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