Towing contracts queried - East Valley Tribune: Mesa

Towing contracts queried

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Posted: Friday, July 29, 2005 11:51 am | Updated: 9:32 am, Fri Oct 7, 2011.

DPS and some Valley police agencies are violating Arizona law by not awarding towing contracts to the lowest bidder, state lawmakers say.

Forcing those agencies to comply with the law, though, would reward towing companies that rely on underpaid drivers and poorly maintained trucks, and would encourage companies to hide some of their fees, witnesses told a legislative committee Thursday.

The overwhelming testimony could be bad news for Cactus Towing of Mesa, which is asking state lawmakers to compel the Arizona Department of Public Safety to return to traditional bidding within its 12 regional districts.

Sen. Thayer Verschoor and Rep. Andy Biggs, Gilbert Republicans, are spearheading a review of state towing contracts started by DPS in June 2002. In each of its patrol districts, DPS surveyed towing companies to learn what they charge for tows and other services. Then, the agency used a formula to set maximum rates for towing calls by DPS and awarded contracts to all towing companies willing to comply.

The only exception had been in the East Valley, where Cactus Towing had an exclusive contract as part of a settlement to an older lawsuit. That contract expired in June, and DPS is rotating calls between towing companies as a temporary solution.

Cactus Towing wants DPS to bid for another exclusive agreement, citing a state law that says "contracts should be awarded on the basis of competitive bidding." Cactus president Lee Watkins said the state’s new approach is driving up towing fees by eliminating competition.

"Following the law will dramatically decrease costs to the public," Watkins told the Tribune on Wednesday.

But DPS wants to complete its transition to flat-rate contracts with multiple towing companies. DPS comptroller Phil Case testified Thursday that prior methods of picking towing companies generated too many complaints from motorists. The new approach allows companies to cover expenses and makes it easier to include contract requirements related to the number of towing trucks, the size and location of a storage yard and other issues, Case said.

"Simply going for the lowest bid price glosses over, at some level, the complexities of the industry," Case said.

Cactus Towing officials didn’t testify during Thursday’s three-hour hearing. But other statewide towing companies strongly opposed awarding contracts only to the lowest bidder. Several owners recalled how Cactus Towing recently won a contract with Scottsdale by bidding a single penny per tow.

"I believe competitive bidding has a place," said Chet Dickerson, president of Western Towing in Phoenix. "But a single, low price shouldn’t be the driving factor, because if you don’t make a profit on the tow, you’re going to make it somewhere else."

While Thursday’s hearing focused on the state Highway Patrol, the outcome will have implications for East Valley police agencies that have different methods of awarding towing contracts. For example, Mesa recently divided the city into four districts, with towing company being assigned to each area. but Gilbert rotates calls between towing companies.

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