Chandler is preparing to seek bids for a citywide towing contract after rejecting one operator’s proposal to remove vehicles from city streets without charging a fee.
While the bid of zero looked good to city officials on paper, a competitor and Chandler’s City Council said the offer was simply too good to be true. Instead, the city will set a price for basic services and let towing companies compete based on the quality of their service.
The contract could affect thousands of car owners. About 4,300 vehicles are towed every year after being abandoned, damaged in crashes or stolen. And the winning contractor can make hundreds of thousands of dollars from the fees and by claiming ownership of abandoned vehicles.
Chandler initially planned to award an exclusive towing contract to Valley Express Towing, which submitted a bid of zero for a basic tow, zero for mileage, zero for claiming a car after normal business hours — and so on.
Three other competitors offered bids ranging from $13 to $49 for a tow, by comparison.
Valley Express estimated it would collect no revenue based on 4,300 tows a year. Other competitors estimated generating about $173,000 to $331,000 a year.
All City Towing protested Valley Express’s bid. General Manager Jeffrey Dunn recently told the City Council that Valley Express was manipulating the city’s evaluation system and would have to charge hidden fees on the back end to make a profit.
“You can’t possibly do or conduct business by charging zero to your customers,” Dunn said.
All City has had Chandler’s contract for more than 10 years.
Brad Stratton of Valley Express said the company’s track record is so solid that it hasn’t lost any of its other contracts with Mesa, Gilbert, the Arizona Department of Public Safety or the Maricopa County Sheriff’s Office.
The company responds to Mesa calls within 11 minutes, he said, compared with 12.5 minutes for another part of Mesa that is served by All City. He argued Valley Express has the staff and capability to respond to a high volume of calls quickly.
The zero bid doesn’t mean Valley Express would have no revenue.
Towing companies can claim abandoned vehicles they tow, for scrap or the used car market. Stratton estimated 800 vehicles are abandoned in Chandler. Most are clunkers with little value that are abandoned for good reason, he said. He estimated those cars will generate $400,000 a year for whichever company gets the contract.
The City Council agreed to override a staff recommendation for the zero bid in favor of a process that ranks bids by quality of service. Councilman Jack Sellers said he feared a zero bid would result in back-end fees that the city wouldn’t be able to monitor or control.
Chandler procurement officer Mike Mandt expects it will take six months to prepare a bidding process, based on approaches some other Valley cities have taken.
The city does not make money from the towing contract, as vehicle owners are billed for services.
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