O.C. Votes to Retain Firm That Runs Traffic Schools, Despite Lower Bidder

Orange County supervisors voted Tuesday to retain the firm that runs traffic schools in the county, choosing it over a competing company that offered to do the work for nearly 20% less.

In deciding which company would receive the $1.6-million contract, the county decided to reduce the importance of price in the decision from 20% to 10%. The winning company, National Traffic Safety Institute, has had the contract since 1995.

The ultimate value of the contract could be as high as $8 million, because it contains options for automatic renewal over five years.

Supervisors selected the company on a 4-1 vote. Supervisor Chris Norby, the lone opponent, questioned the way the firm was selected and criticized the process but couldn’t rally support for his concerns.

“I just question a process in which cost is only 10% of the evaluation,” he said.

Details of the contract must still be negotiated, and it must come back to the board for final approval.

National Traffic Safety Institute’s bid was $21.50 per student. A second firm came in at the same price, but a third firm, the Academy of Defensive Driving, offered to do the work for $18 per student.

The companies were judged by a panel of two Superior Court officials and three judges. While cost was only 10% of their consideration, “company qualifications” and “ability to demonstrate and provide a traffic school program” were each worth 25% of the weighted score, and “management qualifications” made up another 20%. The rest of the weighted decision was scattered among several smaller categories.

National Traffic scored the highest of the three companies, but the panel gave little insight into how it arrived at the score. A staff report said the Superior Court felt “service levels have been satisfactory or above” with the company’s previous performance.

The company, which was founded in California but has since shifted corporate headquarters to Staten Island, N.Y., and now Tuscon, Ariz., has had troubles.

In 1995, it lost its contract in Santa Clara County after questions were raised about close relationships between company executives and judges who selected the firm, as well as the financial statements the firm was providing to the county.

And in 2004, the company’s former president, John Segreti, was sentenced to more than four years in federal prison after he was convicted of bribing an official in New York state. The case arose from a scheme in which the official, former state Labor Commissioner James McGowan, steered hundreds of thousands of dollars in federal grant money to Segreti’s companies in exchange for cash, travel, a golf club membership and a promise of income once he left public office.

In an interview Tuesday, current President Paul Hallums said the company was never a target in the case and assisted the prosecution. He said the firm was often selected over lower-priced competitors because it offered specialized training in defensive driving, had a high accuracy rate on its reports to the court and had longevity in the industry.

“What helped us in Orange County is we’ve been there for 10 years,” Hallums said. “We’re proven.”