Bowing to demands from the US Department of Transportation, Westchester County on Monday issued a request-for-proposals for the county’s bus system.
The bid documents include a provision that bidders post a $20-million bond to cover possible compensation to the current operator, Liberty Lines, if Liberty loses the bid.
The federal government had threatened to withhold an estimated $13 million in transit aid if Westchester extended its current agreement with Liberty Lines, which has held the no-bid contract since the 1980s.
“Price and service are the core of any Bee-Line bus contract, and we now have a foundation for both,” said County Executive Rob Astorino. “The request for proposals process will keep costs down and federal aid in place. The bridge contract provides insurance against the interruption in the quality of service. The goal we are working toward is to protect both riders and taxpayers.”
Liberty Lines runs 56 of the Bee-Line system’s 59 lines. PTLA Enterprise Inc. runs three county bus lines in Peekskill. Overall, the system carried 32 million passengers in 2012, up 1.7 percent from 2011.
Westchester since 2009 has known of the federal requirement to bid the bus contract. But Westchester officials had argued that its special relationship with Liberty Lines would make them exempt from the bidding requirements. Earlier this summer, the Astorino administration was on the brink of awarding a five-year extension to Liberty Lines. The administration and Board of Legislators Chairman Ken Jenkins sought the aid of the county’s Congressional delegation to sway USDOT to drop its demands.
Federal transit officials disagreed, and held firm to its demand that the $100 million contract be bid, arguing that taxpayers deserve to let the open market decide what should be paid the private operator.
Liberty Lines executives have argued that Westchester could be liable for millions in compensation if it loses the contract, claiming it has certain rights to the routes that the county buses run on.
The proposal may prove daunting for potential competitors. The RFP requires that bidders procure a $20 million bond to cover the potential legal awards to Liberty if it loses the bid. The winner of the would be required to defend and indemnify the county against any claim made by Liberty Lines. Liberty, meanwhile, would not have to pay for a bond of that magnitude, giving the company an advantage in the competition.
In addition, any competitor would have to address concerns of the trustees of the TWU-Westchester Private Bus Lines Pension Plan. The trustees have warned that awarding the contract to a new operator would create a withdrawal liability of $232 million.