County Coughs Up $1.2 Million Extra for Fleet

Los Angeles County has agreed to pay a private vehicle maintenance firm $1.2 million to settle a contract dispute over the upkeep of the county’s huge fleet of cars, trucks and prisoner buses.

But under the settlement, the contractor, Holmes & Narver Services Inc., must return $400,000 over the next 18 months because the company’s costs are expected to decline.

Holmes & Narver, based in Orange, had sought $2.8 million in addition to its $12-million annual fee for the first year of its five-year county contract, part of an experiment in turning government work over to private companies. The request came after months of complaints from many county departments, from the sheriff to the Regional Planning Commission, about massive backlogs, shoddy service and delays in providing information.

In the past, the county had spent $14 million annually for its own mechanics to maintain the fleet.

Last week, the county Board of Supervisors asked Chief Administrative Officer Richard B. Dixon to review the vehicle maintenance contract and report back. Earlier, Supervisor Kenneth Hahn had proposed that the board consider canceling the contract.

Hahn’s chief deputy, Mas Fukai, expressed anger about the extra money going to Holmes & Narver. “That’s crazy,” he said. “This is an old trick. They come in low to try to get the contract and (then) come in for a supplement.”

William F. Stewart, director of the county’s Internal Services Department, said the $1.2-million payment will cover costs incurred by Holmes & Narver for repairing more than twice as many vehicles as the company had expected when it bid for the contract. Stewart said about 850 vehicles a month went to the shop during the contract’s first year, which ran from October, 1988, through the end of September, 1989. County mechanics had worked on 400 vehicles a month the previous year.

But, Stewart added: “If they fixed that many vehicles and did the job right, it should result in lower costs for them later on.” So the county is demanding the return of $400,000 “in ensuing months as the gains become apparent.”

He said that if Holmes & Narver does not return that money, “We will simply withhold it from the $850,000 in base pay we pay them every month.”

Stewart said the county is also cutting its fleet from 5,300 vehicles to 5,000. “This is a one-time payment,” he said of the $1.2 million, adding that “there should be no need” for an extra appropriation this year.

Company President Newman A. Howard declined comment on the settlement, saying only: “If that’s what Mr. Stewart says, I’m sure that’s correct. He’s got the purse strings.”

Stewart has recommended against canceling the contract, telling the board Nov. 22 that “the performance of the contractor has dramatically improved.”