Firm with spotty past regains state’s car inspection contract
The company that developed Massachusetts’ first auto emissions inspection program — technology that proved to be inaccurate for the first five years of its use — has won back the contract to install its equipment in garages across the state.
Applus Technologies Inc. was selected from among four bidders to provide testing equipment to more than 1,900 Massachusetts inspection stations in October 2017. Last week, the state approved the company’s $29 million, five-year contract, the final terms of which are now being negotiated.
The deal surprised those who were involved in exposing the flaws in the state’s original emissions test. The Globe reported in 2003 the then-biennial inspection that cost motorists $29 had never worked accurately.
“Hopefully, Applus has been able to demonstrate beyond any shadow of a doubt that we will not be having the same problems this time that we had last time,” said Kyla Bennett, director of New England Public Employees for Environmental Responsibility, which was instrumental in revealing the testing problems more than a decade ago. “One would hope that the state required that of them.”
Explaining the state’s decision, Registrar of Motor Vehicles Erin Deveney said that during the procurement process, “Applus was found to be the lowest cost and offer the best value.”
Service station owners have complained that Applus was able to offer the state such a low price by pushing the costs off to them. To participate in the state’s inspections program — a regular source of income and a potentially lucrative source of repair costs — service stations are required to buy Applus’s equipment. Deveney confirmed that Applus will be paid not only by the state but also eventually by inspectors and inspection stations.
In the past, when its equipment was faulty, the state noted, Applus depended upon a subcontractor it no longer uses. Applus also provided references from states where its work has been successful in the intervening years, according to the state. Applus handles auto emissions tests in Connecticut, Georgia, Illinois, Washington, Idaho, and some jurisdictions in Utah.
Applus, previously known as Agbar Technologies, is now led by chief executive Darrin Greene, who served as program manager on the first contract in Massachusetts.
Asked in a phone interview what has changed since its first contract with Massachusetts, Greene said that the company has been manufacturing its own equipment since 2008.
“We decided to bring everything in-house so we could control the quality and control the equipment and provide a better offering to state agencies,” Greene said. “The key is that we’re providing our own equipment and controlling our own destiny, as opposed to depending on someone else.”
About 4.4 million inspections are conducted on Massachusetts vehicles every year.
More than a decade ago, New England Public Employees for Environmental Responsibility worked with a Department of Environmental Protection whistle-blower to reveal problems that had been covered up by the state. An audit by the department later revealed that the test was failing 39 percent of the time — sometimes passing cars that were spewing pollutants and sometimes triggering costly, unnecessary repairs.
DEP officials knew the test was faulty, but rather than admitting the defects to the federal government, they had tweaked the software and massaged data to try to accommodate the flaws, the Globe reported.
Two DEP employees were disciplined and the US attorney’s office launched a criminal grand jury probe into whether state officials had misled federal regulators to comply with air pollution laws. No charges were reported, however.
Technology has advanced dramatically since then, and the majority of vehicles can now be screened through on-board diagnostic tests, rather than the tailpipe tests that were often problematic in Massachusetts’ first effort. The contractor will be responsible for both.
But Bennett noted that those on-board diagnostic tests, too, can be unreliable. She pointed to the admission by Volkswagen that the German automaker had installed software used to cheat on emissions tests in 11 million vehicles.
“As we saw from Volkswagen, that’s manipulable, too,” she said. “Maybe Applus has a better system now. But given the gravity of climate change and where we are in the parts per million of carbon dioxide in the atmosphere, I think the potential cost is too high to mess around with it.”
Auto emissions tests were mandated in 1999 in Massachusetts to satisfy the federal Clean Air Act and to reduce the flow of greenhouse gases that contribute to global warming. Those concerns have become more pronounced, given increasing evidence of changes in weather patterns. On Friday, Governor Charlie Baker issued an executive order directing state agencies to reduce global warming pollution and communities to start planning for the effects of climate change.
In 2004, the state required Applus to replace its faulty equipment in all Massachusetts service stations within nine months. Further problems were not publicly reported since that time and the company continued to work with the state until 2008, when a competitor, Parsons, won the contract that it still holds today.
But with that contract expiring next year, the state sought proposals for a new contract. Parsons was among the bidders that lost out when the state selected Applus in June.
Applus made the state an attractive offer, seeking the lowest cut of the now-$35 annual inspection fee of any of the bidders.
That fee is split mostly by the service station and the state, with a sliver of it going to the emissions inspection contractor. Applus’s offer was so low it would let the state keep about 58 cents more of every inspection fee than it’s currently collecting. This raised the prospect that the state could reap an extra $8 million from auto emissions inspections, without raising the inspection fee for motorists.
But Applus’s bid also imposes higher prices for equipment and training than the other companies had proposed, leading the New England Service Station and Auto Repair Association to complain to state officials that they’ll be shouldering the cost of Applus’s contract.
Bid documents online show Applus would charge service stations $5,861 for each auto bay outfitted for inspections — about $2,000 more per auto bay than its competitors sought.
“It is unclear why this additional cost is justified and is something that requires further investigation,” Matthew LeLacheur, co-executive director of the association, said in a statement. “The inspection station owners of the Commonwealth should not bear the burden of these additional costs without a better understand[ing] of the reasons for them.”
A spokeswoman for the Massachusetts Department of Transportation would not make Transportation Secretary Stephanie Pollack available for an interview.