In a Nov. 21 lawsuit filed against another bus company, the business that provides electric buses to Montgomery County Public Schools (MCPS) criticized a July report from the county Office of the Inspector General that said the district’s management of its contract with the business led to “millions of dollars in wasteful spending.”
Highland Electric Fleets of Beverly, Massachusetts, filed the lawsuit against AutoFlex Fleets in Baltimore in U.S. District Court for the District of Maryland, claiming AutoFlex unlawfully interfered with its contracts.
The suit, which doesn’t name the inspector general’s office as a defendant, adds yet another layer to the issues the district has faced in recent years involving its MCPS transportation department and the roll-out of its electric bus fleet. Issues ranged from a former MCPS transportation employee being charged with stealing hundreds of thousands of dollars from the district to AutoFlex challenging the electric bus procurement process.
Additionally, in November 2023, protestors rallied outside of the school district’s Rockville headquarters to call for more electric buses after the district was required to spend more than $14.7 million on 90 diesel school buses due to delays with the delivery of electric buses from Highland Fleet.
In a statement provided to MoCo360 on Wednesday on behalf of county Inspector General Megan Limarzi, the inspector general’s office said it stands by the integrity of its work and “fully supports the analysis and conclusions contained in every publication.”
“In conducting our work we diligently adhere to professional standards to ensure it is fully supported, objective, and fair,” the statement said.
The lawsuit
Highland Electric Fleets, which has been providing MCPS with electric buses since entering a contract with the district in 2021, filed its lawsuit in response to legal action from AutoFlex Fleets, a bus vendor that submitted an unsuccessful bid to the district for the same contract.
AutoFlex appealed the district’s decision to award the contract to Highland Electric to the county school board and the Maryland State Board of Education, ultimately taking MCPS to court after news publications reported that the former MCPS transportation assistant director, Charles Ewald, was accused of stealing hundreds of thousands of dollars from the district.
Ewald was sentenced in 2023 to serve five years in prison for charges of felony theft scheme and misdemeanor misconduct in office. Ewald served as assistant director from 2016-2021. He was placed on administrative leave in November 2021 and ultimately fired in February 2022 as the result of an investigation by the Office of the Inspector General conducted in collaboration with local police.
AutoFlex argued that Ewald, who was part of the MCPS bid review committee, exploited the relationship with the company that provided diesel buses to the district, which was affiliated with Highland Electric. According to AutoFlex’s lawsuit, that exploitation allowed him to misdirect reimbursement funds to himself rather than MCPS, establishing an “appearance of impropriety that violates MCPS contracting requirements.”
In March, the Appellate Court of Maryland issued an order remanding the issue raised by AutoFlex back to the Maryland State Board of Education and the local school board. The boards were to review the Highland Electric contract in light of the information about the crimes Ewald was accused of. MCPS Spokesperson Chris Cram didn’t immediately respond to emails Wednesday asking whether the school board has asked the district to address the order.
In its lawsuit, Highland Electric said it was bringing legal action against AutoFlex and its president and owner Luis MacDonald to end their “pattern of unfair competition, including their repeated and unlawful interference with Highland’s contracts and customer relationships.”
The suit argues that AutoFlex and MacDonald “never got over” the fact that the company’s bid was ranked last out of four proposals received by MCPS, a fact also included in AutoFlex’s appeals, and has “pursued a baseless legal challenge to the procurement process,” according to court documents.
Highland Electric also claims that AutoFlex has “unlawfully” interfered with Highland Electric’s customer relationships by urging MCPS to reopen the request for proposals for supplying electric buses and by circulating a letter “purportedly from a nonprofit coalition group to MCPS that urges MCPS to breach its contract” with Highland Electric. The suit alleges that MacDonald, who serves on the Greater Washington Region Clean Cities Coalition board of directors, prepared the letter without proper authorization.
In a Wednesday night email to MoCo360, MacDonald said AutoFlex strongly disagreed with Highland’s “frivolous lawsuit” and said it was “filed to create a false narrative that is illegally pointing the finger of blame” for the company’s “lack of performance.”
MacDonald said AutoFlex intends to ask the court to dismiss the case.
Critique of county inspector general’s report
In a report released in July, the county inspector general’s office found that after MCPS entered a contract with Highland Electric to obtain 326 electric buses, the company failed to meet the terms of the deal and MCPS failed to force the contractor to comply or to end the agreement.
The report said Highland Electric didn’t deliver buses on time, and that mechanical and charging infrastructure issues prevented the buses that were provided to MCPS from running routes on more than 200 occasions.
According to the report, MCPS failed to assess more than $372,000 in fees as required by the contract when buses were unavailable for five or more days because of mechanical or charging infrastructure issues. The inspector general’s report also found that if MCPS had followed the model of its diesel bus agreement, the district could have received more than $1.8 million from Highland Electric to offset expenses related to late deliveries.
While the inspector general’s office isn’t named in the Highland Electric suit against AutoFlex, the court documents criticize the report, arguing that the office didn’t contact Highland Electric before releasing the report and included “many inaccuracies, including misinterpretations of contract terms” that rendered the report incomplete and lacking context.
Highland Electric’s suit also said the company believes that AutoFlex was involved with an anonymous tip that prompted the inspector general’s office to investigate the company’s contract with MCPS.
