MTSU, Clarksville among complainants that weren’t given discount - WSMV News 4

MTSU, Clarksville among complainants that weren’t given discounts off state contract

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The dispute impacts entities that purchase Ford vehicles off a state contract. (WSMV) The dispute impacts entities that purchase Ford vehicles off a state contract. (WSMV)

The Tennessee Department of General Services and the winner of a lucrative state contract are in the midst of battle in which at least $90,000 taxpayer dollars are at stake, a Channel 4 I-Team investigation has found.

While a year and a half long audit into the dispute is still underway, the I-Team has obtained internal emails, documents and complaints that show how a once promising bid now has attorneys for both sides battling over whether the state deserves a refund or owes substantial money.

The scope of the dispute is far reaching and impacts universities, police departments and all state agencies that purchase Ford vehicles off a state contract.

Complaints submitted to the state about the winner of that contract, Golden Circle Ford of Jackson, TN, show why an internal email within General Services stated, “I am receiving numerous complaints on an ongoing basis regarding nonperformance by Golden Circle Ford. This is creating many major problems for local governments, school systems and state agencies.”

Click here to read the internal email from the department of general services.

Emails and records from Middle Tennessee State University show that in some cases, discounts documented in the winning bid for the contract were not granted.

Late last year, when MTSU went to Golden Circle Ford, they thought they would get a 7 percent discount, based off the state contract, for paying early with a total saving of $4,963.

"You're talking about public dollars, taxpayer dollars,” said Jimmy Hart with MTSU Media Relations.

Instead, the university didn’t get the discount and had to later seek out the refund from the dealership.

"That's very real money, and we felt like we needed to recover it,” Hart said.

Click here to see the refund check from Golden Circle Ford.

A spokeswoman for the City of Clarksville confirms they, too, failed to get the discount from Golden Circle based on the state contract and ended up having to ask for a refund.

And then there is the Consolidated Utility District of out Murfreesboro, whose comptroller was so frustrated with how long it took to get cars from Golden Circle based on the state contract that he decided he’d had enough.

"We decided that we weren't going to purchase off the state contract anymore," Long said.

Following the scope of complaints, the state department of general services launched an audit, in which auditors are also investigating to see if the state was incorrectly billed for vehicles.

Click the links below to read the individual complaints:

On July 1, both the state and Golden Circle Ford mutually agreed to sever the contract after the state spent more than $16.5 million on 580 vehicles.

"We do anticipate that the state will be getting some money back from Golden Circle Ford,” said David Roberson, general services spokesman.

"A substantial amount?" asked chief investigative reporter Jeremy Finley.

"That's yet to be determined," Roberson said.

But despite all the complaints, Golden Circle’s attorney said its their company that’s been shortchanged and the state may owe the dealership at least $92,000.

"We think, ultimately, the state is going to owe Golden Circle some money," said Roy Herron, Golden Circle Ford’s attorney.

The dispute began after Golden Circle Ford successfully bid for the contract, offering not only a 7 percent discount for prompt pay, but also what the state considered to be a 0 percent markup on all aftermarket parts.

For example, if the state needed a specific light bar for a vehicle, the state thought they would only pay what the part cost.

But a Channel 4 I-Team investigation found despite the bid, Golden Circle was marking up those aftermarket parts, and also failed to give discounts to MTSU and the City of Clarksville.

"Bottom line, does the state fell like it was duped in this contract?" Finley asked.

"I wouldn't use the term duped; I do think it's fair to say that we don't believe the terms of the contract were being met,” Roberson said.

Golden Circle hired Herron, a former lawmaker, to help in their dispute with the state.

Herron said if Golden Circle determined that they’d shortchanged any agency or department, they quickly corrected it.

Both MTSU and Clarksville confirm they received refunds from Golden Circle.

"There are some places where Golden Circle admits, ‘We owe you this discount - you didn’t get it.' But there are a whole lot more places where it appears to us that the state took discounts that they're aren't entitled to," Herron said.

Herron said their own internal review showed the state got the 7 percent prompt pay discount even when the state didn’t make payments on time to earn it.

Roberson said that claim is being evaluated by the state at this time.

As for the marked-up aftermarket parts that the state believed wouldn’t be marked up, Herron said the dealership was experiencing financial hits because of the contract and had no choice but to mark them up to cover their costs.

"It looks like the dealership was working the numbers to make up for the loss that they were receiving,” Finley asked.

"Golden Circle has done with the state, on aftermarket, what they do, what every retailer has done, with every other customer,” Herron said.

Herron said Golden Circle has to order off for aftermarket parts, which means they had to increase their prices to pay their employees and vendors.

Yet the state continues to believe the bid indicated that no aftermarket parts would be marked up.

"Did the dealership make a mistake in submitting this bid to the state?” Finley asked.

"If the dealership had known how the state would interpret the contract, and how they were going to enforce the contract, the dealership wouldn't have entered into this contract,” Herron said.

Herron also said that the contract with the state was badly written, and the portion about the aftermarket parts can be interpreted in different ways.

The I-Team has requested a copy of the audit when it is completed and will continue to investigate if the state is owed money or must end up paying.

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