Montgomery County Public Schools (MCPS) recouped $1.5 million in fees from bus contractor Highland Electric Fleets after the company delivered electric buses later than expected, with some unable to be operated, Superintendent Thomas Taylor told the Montgomery County Council this week.
The receipt of the money marked a win for MCPS after the Montgomery County Office of the Inspector General’s withering assessment of the district’s handling of the electric bus contract. The $1.5 million total was four times more than the amount that the inspector general’s office suggested in a July report that MCPS was owed.
“We are delighted to meet the minimum standard,” Taylor told the council Tuesday as councilmembers laughed in response.
The $1.5 million payment follows the inspector general’s report that found the bus contractor didn’t deliver buses on time — and its contract with MCPS didn’t include provisions to assess fees for late delivery. The contract did allow MCPS to assess fees for “downtime damages” when buses were unavailable due to maintenance, repair and charging system readiness issues. MCPS didn’t charge these fees at the time, and didn’t terminate the agreement when the contractor failed to meet its obligations, according to the report.
In September, Dana Edwards, MCPS chief of district operations, told the council Audit Committee that MCPS invoiced the bus company for $1.5 million for performance issues and late delivery of buses after receiving the inspector general office’s report.
The $1.5 million invoice was news to the inspector general’s office, Inspector General Megan Davey Limarzi said in September. According to the office’s report, MCPS should’ve assessed the contractor $372,100 in related fees due to the delays.
Edwards explained at the time the $1.5 million total was based on assessing fees for buses that weren’t able to run, delays in buses arriving to the district and a component dealing with “readiness.”
Despite having the largest electric bus fleet of all public schools in the U.S. according to the district, MCPS and its transportation department have been embroiled in several controversies regarding the contract and rollout of the fleet.
In September 2023, Charles Ewald, the former assistant director of the transportation department, was sentenced to five years in prison. Ewald pleaded guilty to charges of a felony theft scheme having a value of over $100,000 and misdemeanor misconduct in office for stealing hundreds of thousands of dollars from the school district.
As a result of the theft, AutoFlex Fleet Inc., a Baltimore-based company that competed for the MCPS electric bus contract, appealed the decision to award the contract to Highland Electric to the school board and the Maryland State Board of Education, ultimately taking MCPS to court. AutoFlex argued in a lawsuit the district showed favoritism during the selection process in choosing the Massachusetts company.
In March, the Appellate Court of Maryland issued an order remanding the issue back to the Maryland State Board of Education and the local school board to review the Highland Electric contract in light of the information about Ewald’s crimes.
In November, Massachusetts-based Highland Electric Fleets filed a lawsuit against AutoFlex, claiming AutoFlex unlawfully interfered with its contracts. Highland’s pending lawsuit also criticized the inspector general’s July report.
On Tuesday, Taylor told the council the district received more than $1 million from Highland Electric Fleets for the electric bus contract that “wasn’t managed particularly well.” MCPS spokesperson Liliana Lopez confirmed the district received a total of $1.5 million.
Several councilmembers thanked Taylor for the update.
“I hope that this speaks to our diligence that taxpayer value is being achieved through our management,” Taylor said.
