For Immediate Release - November 02, 2012

Company That Backed Out of Contract with the MBTA to Operate “The Ride” to Pay $7.3 Million

AG Coakley Says First Transit Reaffirmed Bid Before Suddenly Withdrawing

BOSTON – A transportation company will pay $7.3 million to settle allegations that it backed out of a contract with the MBTA to run “The Ride,” Attorney General Martha Coakley announced today.  The Ride is a paratransit service that provides door-to-door transportation to individuals who are unable to use the general public transportation systems because of disabilities.

The AG’s Office filed an Assurance in Suffolk Superior Court today, which resolves allegations that Cincinnati-based First Transit violated the Massachusetts Consumer Protection Act when it breached a contract with the Massachusetts Bay Transportation Authority (MBTA) to operate The Ride. 

“When First Transit backed out of the contract to run ‘The Ride,’ it hurt the T’s ability to serve the customers who rely on its services and left all taxpayers footing the bill,” AG Coakley said. “This settlement will bring millions of dollars back to Commonwealth’s taxpayers that deserve the best in public transportation.”

“First Transit made a calculated business decision to abandon its bid, assuming that the MBTA would roll over and bear the cost. That assumption was wrong, and the action that the Attorney General takes today proves it,” said MBTA General Manager Jonathan Davis. “The MBTA fully supports and appreciates the Attorney General's efforts to recover the substantial loss the MBTA suffered as a direct result of First Transit's actions.”

The settlement concerns the MBTA’s procurement of services for The Ride. In November 2008, First Transit submitted a $97 million bid and was subsequently awarded a five-year contract in March 2009. In April 2009, First Transit learned its bid was significantly lower than competing bidders. In May 2009, First Transit abandoned the contract two months before its start date, asserting that it received inaccurate information in the request-for-proposal (RFP).  The Commonwealth contended that these reasons for breaching the contract were false.

The settlement resolves the resulting dispute between the parties and requires First Transit to pay $7.3 million to the Commonwealth and to exercise due diligence in any future bids with the MBTA. 

Assistant Attorneys General Matthew Connolly, Jeffrey Walker and Division Chief Stephanie Kahn of Attorney General Coakley's Consumer Protection Division are handling this matter along with Deputy Attorney General Chris Barry-Smith in coordination with legal and operations staff at the Massachusetts Department of Transportation.

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