State off the hook for payment of $446K after dispute over state contract

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

An ugly dispute between the state and the former winner of a lucrative state contract has ended with both agreeing not to seek money from the other.

The resolution comes seven months after the Channel 4 I-Team first exposed the dispute between the state of Tennessee and Golden Circle Ford out of Jackson, TN, including claims that the car dealership overcharged for parts and didn’t provide discounts.

The I-Team obtained internal emails, documents and complaints that show how the once promising bid now had attorneys for both sides battling over whether the state deserves a refund or owes substantial money.

In a joint statement released to the I-Team, the state alleged that Golden Circle Ford owed the state $186,000 for charges the state felt it did not owe.

That same statement also read that Golden Circle Ford felt the state owed them $446,733.54 for taking improper discounts that Golden Circle felt the state did not earn.

The statement read that the parties agreed to engage a disinterested third-party attorney to mediate the situation, and that mediator ultimately recommended to both sides that they dismiss any and all claims against each other.

The statement concluded that the state believes taxpayers had been treated fairly, and Golden Circle felt that its employees and customers had been treated fairly.

The scope of the dispute was far reaching and impacted 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.”

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.

In 2015, 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.

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," Paul Long said.

Click here to read Golden Circle's response to those claims.

Following the scope of complaints, the Tennessee Department of General Services launched an audit, in which auditors investigated to see if the state was incorrectly billed for vehicles.

On July 1, 2016, 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.

Copyright 2017 WSMV (Meredith Corporation). All rights reserved.


Chief Investigative Reporter

Jeremy Finley is the News4 I-Team's Chief Investigative Reporter. He has won multiple Midsouth Emmy and Edward R. Murrow Awards.

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