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Technicality kills tiny bus firm's dream


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Road Warrior: Technicality kills tiny bus firm's dream

John Cichowski , The Road Warrior, @njroadwarrior Published 8:51 a.m. ET Feb. 25, 2017 | Updated 19 hours ago


How a little bus carrier lost a bid for 34 routes in Bergen County



If you've ever been led to believe that you're getting a big promotion – only to be told later that, actually, no, you're being fired – you might appreciate what's happened to a business owner from Mahwah.


Jim Murphy owns a little bus company – just 50 buses – called Saddle River Tours, which is actually based in Wallington. In September, Murphy got a letter from NJ Transit saying the company had outbid mighty Coach USA for a prized contract in Bergen County. For him and others who own businesses in regulated industries, it was big deal because it looked as if some healthy competition might be added to a statewide bus-carrier system now dominated by giants.


“Finally," said Murphy, "a little, family-owned company like ours had reached the big time in New Jersey busing, and we thought we could expand." Why not? The contract was for seven years – $49-million! It meant Saddle River Tours could provide local service for eight routes in Bergen, including Paramus and Hackensack. The additional 34 buses and a larger staff would give it the economies of scale needed to compete with Coach for another contract – this time for routes in Passaic County. But nine weeks later, a second letter canceled the Bergen deal on a technicality.


The NJ Transit staff, it turned out, had discouraged Coach, which had lost the contract, from making “the required oral presentation to NJ Transit’s selection committee,” said the letter, and it was “in the best interests of NJ Transit to ensure strict conformance” with the rules by re-advertising the bid. Since the bidding process would stretch way beyond the current contract, the NJ Transit board ruled this month to give Coach a one-year contract extension – but for $720,000 more than the low bid submitted by Murphy’s company for the first year of service.


“Although it might be in the best interests of NJ Transit,” said Joseph Barbato, the little company’s controller, “it’s hard to understand how spending $720,000 more is in the best interests of the public.” Neither Barbato nor Murphy claims any intended wrongdoing. But the transaction offered some insight into the business practices of a state agency whose bus and rail operations have provoked chronic service complaints while posting losses of more than $300 million annually despite two fare increases in 10 years. Many complaints have focused on the elimination of bus routes as NJ Transit continues to rely on commercial contracts with private companies for more than 20 percent of its 254 routes.


In nearly every case, these contracts are won by national firms with big local operations, such as the 2,000-bus fleet run by Coach Community in Paramus, and Hoboken-based Academy, which commands 1,200 vehicles. Midsize carriers, such as DeCamp in Montclair and Lakeland in Dover, supplement NJT’s coverage of Essex and Morris counties, for example, but typically these carriers operate under longstanding agreements with the agency.


Bidding requirements

By contrast, the routes in Bergen and Passaic require bidding, and small carriers such as Saddle River Tours seldom, if ever, make it through this rigorous process. The company, which dates back seven decades, concentrates mostly on charter routes, casino runs, a minibus service in Morris County, shuttles on the St. John’s University campus in Queens, some local athletic departments, and one small contract with NJ Transit.


“We got in a couple of years ago,” Barbato said, “when we were asked to take over a route from Rockland County [NewYork].” Rockland Coach pulled out, so bidding was waived because no other carrier wanted the route, which ran to the George Washington Bridge Bus Terminal then under reconstruction. “I knew we’d barely break even on it, but it gave us a foot in the door,” he explained.


Barbato isn't a busing neophyte. Before joining Saddle River Tours two years ago, he was a 20-year employee at Academy, eventually working his way up to assistant controller. So he was well-versed in the state’s complicated bidding process, which requires completing an exhaustive request for proposals and answering questions during an extensive oral presentation, as well as providing the lowest bid.


“Price is important, but it’s more than price,” he said. “You have to meet all the technical requirements. The procurement people want to know you have all the equipment, skills and experience necessary to handle the job. It takes months to put everything together, plus the oral presentation.”


The technical piece, he said, can easily trip up small companies when they compete with big national firms, but apparently his bid cleared all bureaucratic hurdles. As Barbato explained in a last-ditch appeal to the NJ Transit board of directors at a Feb. 8 meeting: “This RFP [request for proposal] went to a best-and-final round … a statistical tie, which means it came down to cost.” Since the two companies were dead even, both were given a second chance to cut costs to the bone, and again the contest ended in a photo finish, with Saddle River offering a seven-year figure of $48,977,000 – just $100,000 less than Coach Community, Murphy said.


Big celebration

Although the win was razor thin, he thought his company had turned a corner. When the first letter came from the procurement department, “we celebrated for days,” Murphy said. “No, it was weeks,” said Barbato, who still has a smartphone recording of the whooping and yelling in the office when the letter was read to the 102 members of the Saddle River staff. On the strength of the letter, Barbato and Murphy made plans to bid for similar, adjacent routes requiring 38 buses, mostly in Passaic County. With the additional manpower needed for the Bergen routes and by leasing additional facilities, they were confident they could win again. But the emotional high they had experienced in September came crashing down in November when the procurement department’s second letter arrived.


Coach Community had issued a formal protest. Unlike Saddle River, the big company had never made an oral presentation, a factor that violated “strict conformance with the terms of an RFP and an equal opportunity for all proposers to obtain their maximum technical scores,” according to the letter. Barbato said he later learned Coach had agreed to waive its oral presentation. Neither Coach nor NJ Transit would confirm that, but Barbato and Murphy insisted Coach also had waived a similar presentation in a previous best-and-final round with Saddle River for routes in Union County. It wasn’t much of an issue then, however, because Coach prevailed with a low-bid price.


“That’s common practice when you’re bidding to renew a contract you’ve had for a while,” Barbato said. “They come to you and say, ‘It's not necessary for you to come in. We know your work and your facility.’ When that happens, you don’t object because there’s always a chance of screwing up an oral presentation.” For Murphy, the rejection amounted to a crushing triple loss. “If I’d known about the waiver for the Union County routes, I would have protested then and I might have received that contract,” he said. And losing the Bergen contract, he said, “meant we couldn’t bid as low as we wanted to for the Passaic routes.” NJ Transit rejected his appeal of its Bergen ruling, which has all but dashed any remaining hope Murphy had for winning the Passaic contract, which is expected to be announced next month.


Coach keeps Bergen

Meanwhile, Coach is hanging onto the Bergen routes – at least for the time being. “To avoid service disruption, NJT entered into negotiations with the incumbent provider for a limited extension of service for the sole purpose of allowing sufficient time to rebid, pursuant to the board’s authorization,” agency spokesman James Smith explained in an email.

This “limited extension” will run a year. Barbato thought he could shrug that off – until he saw the details of this renegotiation. Price – the factor that had made the Saddle River bid attractive enough to initially win the contract – came in at $6.3 million, which is $720,000 higher than the first-year cost initially proposed by Murphy and Barbato.


Spokesmen for Coach and NJ Transit declined to comment on any of the negotiations, especially the renegotiation. Smith said it was confidential. But Barbato had plenty to say. “For a company with a fleet of 2,000 buses, winning a contract like this only means you’re holding onto a few more routes,” he said. “If something goes wrong and you miss a few trips, you just pay a fine and move on. But for a small company like ours, Bergen would have meant everything. We’d be out there every day polishing those buses and making sure they delivered topnotch service.” Will Jim Murphy bid again for the Bergen routes next year? "Maybe not," he said. As the losing bidder in the first round, "Coach had the right to see our bid," he said. "So they now know our strategy."



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  • 2 weeks later...
On 2/10/2018 at 7:10 AM, davemackey said:

Watch for rebranding on the NABIs Community has (6057-6126).... that's what they'll probably use,

not necessarily since they're NJT routes, expect the NABIs to remain NJ Transit branding, the label will say "Operated by: Saddle River Tours"

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  • 3 weeks later...

Now the issue is, does Saddle River have enough drivers to cover the NJT routes?  Buses have basically not been showing up. 

CUSA Community was able to retain their drivers and have them operate NJT's Passaic routes


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