Government Fleet Top News

Colorado Springs Sued by Fleet Maintenance Provider

April 10, 2017

File photo
File photo

The City of Colorado Springs is facing a lawsuit from its fleet maintenance provider, after costs rose higher than anticipated. The city first outsourced its fleet maintenance in 2014, expecting to save $2 million over a three-year period. A five-year contract was awarded to U.K.-based Serco, with the option to renegotiate payment for years four and five based on inflation.

A financial audit conducted a year into the agreement found that costs were higher than anticipated due to a new utility service center, and the city paid $112,199 more than expected. 

Now, Serco has said it lost money in the first three years of the contract, and would require a 22% price increase for 2017 to meet its operating needs, reports the Colorado Springs Independent. This would add $1.4 million to the city and utility's fleet maintenance budget, bringing the price up to $8.2 million.

This is significantly more than the 2.6% increase allowed in the outsourcing contract, and Serco has filed a lawsuit against the city to declare the agreement unenforceable for the last two years of the deal. The company cited the city's aging fleet for its rising maintenance costs.

Comments

  1. 1. Citizen [ May 27, 2017 @ 07:35AM ]

    Lol... The city gets all it deserves for that stupid decision in 2013. Sad part about it is.... No one is accountable for the decision that cost the city more and all the dedicated employees there career

 

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