HARVARD -- The fate of a 44-year Harvard bus company is unclear following the Monday awarding of the Harvard school busing contract to Dee Bus of Shirley. The three-year contract takes effect on Aug. 1.
Contacted Tuesday, Gokey & Quinn Bus Company President and Manager Peter Deforge was melancholy about the unanimous 5-0 Harvard School Committee vote to contract with Dee Bus, saying, "It's the town's loss on a number of levels."
Nine companies pulled bid packages in the town's invitation for bids, but only Gokey and Dee responded. Bids were opened on Jan. 15 by Finance Director Lorraine Leonard, who is the town's procurement officer. Deforge was present for Gokey, Dee's business manager Sandra Martin was present for her family's company.
Dee's Facebook page states that the company was birthed out of a taxicab service operated by Leo Dee starting in 1946. "Later, when his son, George Dee, joined the business, he began bidding for school bus contracts, and the business has grown to a fleet of 163 buses and 27 special-needs vans."
At Monday's committee meeting, Martin was accompanied by her sister, Renee. Martin said her brother is the chief mechanic for the fleet headquartered at 33 Great Road, Shirley, just over the Ayer town line.
Gokey also has deep local roots. Started in 1969, Gokey & Quinn has had the Harvard school bus contract for more than 30 years. Headquartered on Ayer Road in Harvard, the Harvard schools were Gokey's largest client.
"We're disappointed," said Deforge. "We've provided the town with boutique service over the years. It was our hope that by providing that kind of added care and service we'd get a little extra consideration. That turned out to not be the case."
But Deforge acknowledges that Harvard was put in a difficult situation. "The town did try to work things out to help keep the continuity in the busing contract."
Leonard confirmed that Martin threatened to take action with the Inspector General's Office when learning that she was considering either rebidding the contract due to ambiguous language in the request for quotes, or splitting the contract into two pieces.
And that's when the wheels came off the bus for Gokey & Quinn.
Regular versus athletic busing
Leonard said regular student transportation is funded through the omnibus budget, while athletic transportation is paid for by athletic fees, which flow into a revolving fund for the Athletic Department. Combined together into one contract, Deforge said "we were the low bidder" over the life of the three-year contract. Leonard agreed, stating that when factoring in Gokey's lower rate per mile on athletic runs, Gokey appeared to have an edge in terms of saving money for Harvard.
But to maximize the savings for the town and after the bids were opened, Leonard said she'd considered splitting the contract into two pieces to realize the lowest cost for regular busing and the lowest cost for athletic busing. In the alternative, she considered rebidding the contract altogether.
Leonard said Gokey's long been the sole bidder for the work. Faced with a dilemma, Leonard reached out to both companies to discuss her concerns, noting the bid package "reserved the right" for Harvard to split or reject the bid. Leonard said, however, those grounds are generally reserved for instances where bids are higher than funds on hand to pay on the contract.
"I called Deforge and told him," said Leonard. "He said they wouldn't be in business" if only given the athletic piece.
Martin's response was more ominous. "If you award to Gokey, we're going to challenge it with the Inspector General," said Leonard. The Inspector General's Office has oversight of public contracts. "When I said, 'Our other thought is to rebid it because the bid wasn't clear on athletics,' I got the same response: 'If you do that then we'll go to the IG's office.'"
With the threat in the air, Leonard contacted the IG's Office for advice on how to proceed. Leonard then learned that Dee had carried through and filed a formal complaint, triggering a pre-award hearing to review the bidding process.
On the regular busing piece, Dee bid $781,650, or $22,000 less than Gokey's $803,700 bid over three years. However, Gokey bid significantly less on athletic transportation, at $3.25 per mile for yellow school bus transport (compared to Dee's $4 per mile) and $4.25 per mile for coach bus transport (compared to Dee's $6.50 per mile). Over three years, Leonard said she projected a savings by going with Gokey.
But the IG's Office found the Gokey bid to be incomplete, leaving Dee as the only qualified bidder left in the mix. Leonard said Gokey failed to an audited financial statement with its bid, which is a required document according to the bid package.
The IG's Office termed it a "material omission" from Gokey's bid. "Bid forms must be fully completed to be considered responsive ... Requiring a financial statement is not a minor informality that can be waived."
"It is critical to an assessment of the financial standing of the bidders, most especially in the instant case where there is concern over the possible financial instability of one of the bidders," reads the IG's determination letter. "Waiving the financial statement requirement for Gokey would result in prejudice to the other bidder, as Dee was the lowest responsive bidder who also met Harvard's requirements in this solicitation."
However, Deforge and Leonard agreed that Harvard has never denied awarding the contract to Gokey in the past despite the fact the company hasn't provided an audit report before.
"We have some documentation missing from our bid but have been missing that piece for the last 10 bids over the decades," said Deforge. "The town's always waived it in the past. We're so small that we used a bookkeeper with a certified public accountant."
"In the IG's mind, that was the critical factor -- we were not a qualified bidder though the town's done business with us for 30 years. If that document had ever been requested, we'd have provided it," said Deforge. "I'd certainly be willing to do it if it made a difference."
"The last time he bid, there was no other bidder," said Leonard. "That's why he 'skated' on it. I even told the IG when he asked me 'Why didn't you think that was serious?' I said we had Gokey for 30 to 40 years and if it was a company we didn't know, I'd think it to be serious. But since they're just down the street ..." Leonard trailed off.
"That's what the IG hung their determination on," said Leonard.
Dee had offered to match Gokey's athletic transportation quote. Leonard said since the IG invalidated the Gokey quote, her hands were tied. "I couldn't entertain that because, at that time, there were two bidders," said Leonard. "When the IG found (Gokey) unresponsive, I only had one bidder left -- Dee." Dee has agreed to match the lower Gokey athletic quote.
The end result is a deal that will save Harvard more money still in terms of school transportation and $6,000 less than what was built into the proposed fiscal 2014 budget. But Deforge suggested the town may suffer in other ways if his business fails.
Deforge said the company pays a healthy sum annually in excise tax for its fleet of 30 vehicles. That number was not immediately available but Leonard agreed with Deforge. Leonard said she'd raised the excise tax argument to the IG's Office to no avail. "That is not a valid reason, but I did make that point."
Gokey wasn't represented at the Feb. 22 IG's Office hearing. Notified by Leonard a few days before the event, Deforge said he opted to take a prepaid February vacation with his family. Though only Dee and Harvard were summoned to appear, Leonard said Gokey's absence didn't sit well with Inspector General Glenn Cunha's staff.
Deforge said it's unclear if Gokey & Quinn can survive the hit. "This is a huge loss," said Deforge. "This is our only school district. It's a huge piece of income. I don't know yet -- I'm still doing some math and analysis, but it seems possible that it could put us out of business."
Gokey & Quinn have 10 buses dedicated for Harvard school and athletic runs. Deforge said he's relied on coach buses for athletic trips rather than commit to debt service for a new yellow bus.
While Harvard's busing needs are "tiny as far as the norm in the state of Massachusetts," Deforge said, "Harvard is our single largest customer, far and away."
While "the town doesn't have to take into consideration if my business has to survive or not," Deforge said the loss of the Harvard contract is a serious blow. "We've been dealing with some brutal economics for years that have been crushing."
"We know that you've had Gokey & Quinn for a long time," said Martin to the committee on Monday. "We're looking for a smooth transition."
Martin pledged that Dee would accept any Gokey drivers that the committee desired. "As long as you're happy with who is in the position, we'd offer them a spot."
Dee serves Boxborough, Maynard, Westford, Clinton, Nashoba Tech, Groton-Dunstable Regional and Tyngsboro. Martin said she'll meet with Harvard school officials to "find out how Harvard works ... We have all the surrounding towns so we're very happy and hope you will be, too."