Palmdale Schools to Award Bus Contract Despite Dispute Over Service : Transportation: Officials say they stand behind the decision although another district canceled its contract.

Palmdale School District officials said Thursday that they still plan to award a multimillion-dollar contract to a private bus company, despite learning that it left hundreds of handicapped students stranded at home for weeks during a 1988 contract dispute in Orange County.

“We certainly don’t have any different opinion of Durham Transportation than we had before,” said Forrest McElroy, superintendent of the 11,800-student Palmdale district. “We think they’re a good operator. We think they will do a fine job.”

McElroy’s comments followed a Los Angeles Times story on Thursday that reported Durham’s past problems in Orange County. Unaware of those problems, the Palmdale district’s Board of Trustees voted Tuesday to hire Durham--the nation’s fifth largest school bus operator--to transport virtually all of the district’s 4,500 bus-riding students starting this fall.

The contract is expected to earn Durham about $3.1 million over three years.

McElroy said he was not troubled by Durham having provided the Palmdale district with incorrect bid information that made it appear as though the company still had a contract with the Orange County Superintendent of Schools. The contract was canceled in mid-1989.

Orange County officials took that action after Durham failed, starting in September, 1988, to provide enough buses to transport mentally handicapped children from their homes to schools.

As many as half of the 800 children were left without bus service for several weeks.

Durham executives have blamed Orange County school officials for not increasing their payments to cover higher operating costs. A top Orange County school official this week called Durham’s actions “despicable and not very ethical.”

After talking Thursday with Orange County school officials, McElroy said he still stood behind Durham.

He said the company, which operates about 1,900 buses in California, Washington and Texas, has received favorable reviews from other school districts.