Government Fleet Top News

Pittsburgh Fleet Outsource Agreement Over-Budget

September 12, 2006

PITTSBURGH, PA – An Ohio company hired last year to streamline maintenance of the City of Pittsburgh’s 1,000-vehicle fleet and cut costs is projected to exceed its three-year spending limit, according to the Pittsburgh Tribune-Review. Acting City Controller Anthony Pokora plans to release an audit critical of the fleet maintenance company’s performance next week. It’s expected to show, in part, that First Vehicle Services, of Cincinnati, will far exceed its $11.7 million contract, which runs through Mar. 2008.The city awarded a three-year garage operations contract worth $11.7 million to First Vehicle in Feb. 2005, hoping to control maintenance costs that exceeded $6 million in 2004. First Vehicle promised to save the financially strapped city $3 million a year. Yet, the company had spent more than $7 million as of Jul. 26 — 60 percent of its $11.7 million for three years. That means only $4.68 million in city money is available to cover the remaining 18 months of the contract.Cost overruns for fleet maintenance could force City Council to tap into other areas of the budget, drawing resources away from other programs, according to the Pittsburgh Tribune-Review. The council also could refuse to renew First Vehicle’s contract in 2008.Pokora said First Vehicle could “make a good argument” that city officials underestimated the cost of vehicle maintenance in their haste to bring the 2006 budget in line with a state-mandated financial recovery plan. One area that has outstripped budget estimates is unexpected vehicle repairs.As of July 31, First Vehicle had spent more than $667,000 on unanticipated vehicle repairs, according to the Pittsburgh Tribune-Review. The city’s budget allows $748,811 for such costs — meaning that at the current pace, unexpected repairs could cost $1.14 million by the end of this year.

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