NYC Faces Lawsuit Over New Vehicle Auction Contract

The City of New York's Department of Citywide Administrative Services (DCAS) is facing a lawsuit by its previous city fleet vehicle auction contractor. PropertyRoom, which the city had used as its main contractor to auction its old vehicles for 10 years, argues that it was not made aware of a new contract DCAS was working on for 10 months with another contractor, Insurance Auto Auctions Corp. (IAA). PropertyRoom also alleges the new contract will cost the city $6 million more over five years, based on a fleet reduction plan authorized by former Mayor Bill De Blasio.

PropertyRoom CEO Aaron Thompson told the New York Post he believes the IAA contract would potentially cost the city even more money, because of a recent announcement by Mayor Eric Adams to cut more of the city's fleet, while inheriting the IAA contract from the De Blasio administration.

In the lawsuit, PropertyRoom argues that it engaged in near-daily or weekly discussions with DCAS regarding its then-active contract with the city. The contractor argues it reiterated its desire to continue performing under the contract and to renew or extend the contract indefinitely. PropertyRoom argues it revealed its lack of awareness about the new proposed contract with IAA by asking DCAS when it was planning on re-soliciting a request for proposal (RFP) for services. The contractor argues the city "played dumb," pretending it had not made up its mind about an RFP with IAA. PropertyRoom's lawsuit alleges the contract was illegally awarded, and wants it voided and rebid.

Government Fleet reached out to DCAS about these claims. The department calls the claims "baseless," saying it has moved to dismiss the case. DCAS responded to PropertyRoom's claims about higher prices, arguging the city had no way to know whether it would be paying more, since PropertyRoom never submitted a proposal. DCAS says it stands by the contract process, arguing that it was, "proper and in compliance with all procurement laws."

DCAS pointed out that IAA has been the subcontractor on the city contract since 2018. The city also noted that PropertyRoom made a business decision not to bid directly for the work, but to serve as the subcontractor on the IAA bid instead. DCAS argued PropertyRoom then made a business decision to withdraw as the subcontractor on the IAA bid, choosing not to participate in the procurement, so it was not eligible for the award of the contract.

DCAS says while it is still in its first six months of its contract with IAA, revenue results so far have been comparable to PropertyRoom results.

Originally posted on Government Fleet