Pittsburgh Audit Targets Outsourced Maintenance Costs

June 07, 2016

The City of Pittsburgh's unexpected fleet maintenance costs have increased and turnaround times for vehicle repairs have fallen to a substandard level, according to an audit of the outsourced contract with First Vehicle Services.

City Controller Michael Lamb's May audit analyzed the vendor's performance in maintaining the city's fleet of 1,089 vehicles from Nov. 21, 2010 to Nov. 20, 2015. The city has retained the company's services since 2005.

The audit looked at scheduled (or target) maintenance and unscheduled (non-target) maintenance that were capped in the contract at $26.9 million and $8.5 million respectively. During the 5-year contract, target maintenance cost the city $26.9 million, while non-target cost $10.2 million. Non-target expenses increased 16.5%.

The audit noted errors in First Vehicle Services maintenance reports about how labor hours were calculated that led to the city being under-charged and over-charged. Of the 117 work orders will incorrect labor hours, 29.1% (34) were non-target orders. Of these, 13 were overestimated and 21 were underestimated.

The amount of time it takes to repair a vehicle and get it back into service came under scrutiny by the audit, which found that First Vehicle Services never met the 24-hour turnaround time for EMS and police vehicles in 2013 or 2014.

The vendor also failed to meet the standard for 48-hour turnaround times. EMS, fire and police vehicles on average didn't meet the desired range of 94-96% for 2013 and 2014. For those years, more than 10% of vehicles took more than 48 hours to repair.

The audit listed 19 recommendations. In a letter to Lamb, the company's regional vice president Jason Stack agreed with most of the recommendations. The company disagreed with several recommendations to increase the financial penalty for not meeting turnaround times.

Read the full audit here.

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