Baltimore is suing the operator of the free Charm City Circulator, alleging the company overcharged the city more than $20 million for passenger transport.
The lawsuit, filed in Baltimore City Circuit Court, alleges breach of contract by Transdev North America Inc. and Transdev Services Inc., according to a news release Wednesday afternoon from the city.
The city claims it discovered Transdev invoiced for thousands more hours of passenger transport than it performed, resulting in the city overpaying more than $16 million since 2010.
“When companies violate their contracts with the City and either overbill or underpay, the Law Department will seek damages to make taxpayers whole,” City Solicitor Andre M. Davis said in a statement.
A city consultant reported a discrepancy in the invoices and service reports from July 2015 to July 2017, according to the complaint. The report indicated Transdev had billed the city for more than 29,000 hours when a bus had not been available for passenger transport.
In a March letter to Transdev, the director of the Baltimore City Department of Transportation pointed out the issue, asked for a reconciliation and indication of any refunds due and requested weekly service logs moving forward.
Transdev did not provide the requested information but allegedly admitted to invoicing the city for scheduled hours as opposed to when the vehicles were in operation, according to the complaint. The company claimed to have reached an unwritten agreement “with unnamed City ‘representatives'” to bill for scheduled hours, not service hours.
The city demanded $2 million in partial compensation in an August letter. Transdev allegedly admitted again to overbilling and stated that the practice dated back to at least 2010.
The lawsuit alleges the submission of invoices and acceptance of payment for scheduled hours and not actual service hours represents a material breach of the contract.
The Baltimore City Department of Transportation is in the process of selecting a new vendor to provide circulator service and expects to award a new contract by Oct. 10, according to the news release. Buses will still be in operation while negotiations take place, according to city officials.
The case is Mayor and City Council of Baltimore v. Transdev North America Inc. et al.