Friday, August 27, 2010

ACS's Parking Privatization Effort in Nation's Capitol: Auditor Exposes Overcharging and Bogus Tickets Issued by ACS

You have to wonder how much City officials actually researched ACS's performance when it comes to running parking operations. In 2007, The Newspaper reported on the D.C. auditor's findings regarding ACS's performance on its seven year, seven month privatization contract:

A report released February 22 by the Washington, DC city auditor documented the mismanagement of a for-hire contract to issue parking tickets in the nation's capital. The District's choice of Affiliated Computer Services (ACS) to run meter maid operations delivered $8,823,447 less revenue and a twenty-fold increase in complaints from the public.

"The District government experienced a severe financial crisis," the audit stated in explaining the purpose in hiring ACS. "In response to the growing concerns regarding the decline in parking meter revenue, on February 2, 1998, Department of Public Works entered into a $24,991,000 seven-year seven-month privatization contract
with Lockheed Martin IMS Corporation, now Affiliated Computer Services (ACS) to provide new parking meters and to manage the District's parking meter services."

Among the findings were that ACS was overcounting the number of meters, and charging accordingly. ACS claimed 1906 were in use, but the audit showed 1236 -- "the remaining 670 meters, or 35 percent, were missing and could not be accounted for by ACS or DDOT," the report explained. Of the meters that were present, 65 percent were defaced, damaged or inoperable. Only 232 meters were in proper working condition. ACS also pocketed $644,952 in fees for parking meters that had been "bagged" while streets were under construction or turned off for private functions, in violation of the city's contract.

The audit also blamed ACS for improperly issuing 6888 tickets to motorists parked at busted parking meters to generate $159,975 in revenue. The frequency of such mistakes was reflected in the increase in the number of complaints. When the city ran the meter maid program, annual complaints averaged less than 4000. In 2005, 89,840 complaints were lodged against parking services.

Between 1999 and 2005, the District collected $89,022,302 in parking meter revenue. Of this, ACS kept $26,434,192. Emeka Moneme, Acting Director of the District Department of Transportation suggested a new means of increasing revenue by the use of new
"pay and display" style electronic parking meters to overcharge motorists.


The 61 page scathing report about ACS's failures can be found on-line. I think it would be enough though to simply list some of the topics listed on the index page:

  • The Parking Meter Privatization Effort Failed to Yield the 5% Cost Savings Required by Law. Instead Costs Were Approximately $8.8 Million, or 33% Higher under Privation

  • Net Revenue under In-house Operations Were Higher than under Privatization

  • ACS Failed to Meet Performance Standards under the Contract

  • Flawed Meter Inventory Data Provided under the Contract
  • Parking Meters Examined by the Auditor Had Significant Problems.

  • Overall Meter Complaints Increased Approximately 903% under the Privatization Contract with ACS

  • Parking Ticket Patrons Were Improperly Fined $159,975 While Parking at Broken Meters

  • ACS Was Inappropriately Paid $644,952 in Bagged Meter Revenue Fees

Indianapolis would deal with the problems exposed in the Washington, D.C. audit, by simply never doing an an audit of the politically-connected ACS. No audit - no publicity of the problems. That is the Indy way. Even if there was an audit done, you can bet it would be so greased by the politicians that ACS come out smelling like a rose.

As a side note, I would specifically note that the DC audit blasted ACS for submitting "flawed meter inventory data." In the Indianapolis contract, it says that the City will simply use whatever data and calculations ACS supplies the City for determining the revenue to which the City is entitled under the contract. Why in the world would City negotiators agree to that?

Finally, it should be emphasized that these were problems noted in ACS's performance on a 7 year plus contract, a contract short enough where ACS actually had to fear competition. Imagine what ACS's performance will be like under a multi-generational, 50 year contract which will shield the company from competition for decades?


Downtown Indy said...

I shudder to think...

I hope the city's negotiated an an 'out' if ACS is found to be pulling those sorts of shenanigans here. Ha, ha, ha. I crack myself up sometimes.

Marycatherine Barton said...

All the publicized information about ACS and the city contract are appalling. Please, may not this Republican mayor and controlled council not saddle us with it!!

MacDre said...

ENFORCEMENT PROCEEDINGS - SEC Charges Affiliated Computer Services, Inc. With Stock Options Backdating and False Disclosures: "The SEC's complaint, filed in federal district court in Washington, D.C., alleges that from 1995 to 2006, ACS engaged in a fraudulent and deceptive scheme to provide executives and other employees with undisclosed compensation."

Above is a part of a recent investigation into ACS.

Seriously folks let's get real.
Public officials are supposed to be trustees of the commonweal, not political
buccaneers seeking their own private gain. But sometimes, in what economists call a
principal-agent problem, those trustees forsake that obligation and misuse the power
delegated to them in ways that advance their personal interests rather than those of the
Corruption distorts the allocation of resources toward projects that
can generate illicit payoffs. Besides the undesirable efficiency consequences arising
from this distortion, the effect is likely to aggravate social inequalities, because the poor and powerless suffer, by definition, a comparative disadvantage in securing special favors.
If the $500,000 has to be paid if the City-County Council will not vote for the ACS deal. Pay ACS's political blackmail scheme and get them out of town. Like all the other commentaries together with articles I've been reading have showed, ACS is not the kind of corporation we want in our town. Political blackmail, special interests, conflict of interests, WHERES THE FBI? WHERES THE FEDS?
Has anyone ever read ACS Ethical Standards they try to impose on their employees at the welfare office. Their employees aren't allowed to accept even a Christmas card. Yet the CEO's and Directors of this company have done just that.
ACS is a shameful, unethical, disgraceful hypocrite, not to mention the so called "leaders" of Indianapolis for creating this mess.
What an embarrassment to our city.

Rocco Lee said...

The city of Sacramento is undergoing the same pathology just like on this case. Their public parking spaces are to be privatized as well.
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