UPDATE: Missouri to rebid 10 contracts for license offices

Friday, December 11, 2009 | 12:01 a.m. CST; updated 12:16 a.m. CST, Friday, December 11, 2009

JEFFERSON CITY — A southwest Missouri group has lost its state contracts to run 10 driver's license offices because it proposed managing them with an executive who isn't on the payroll.

The Missouri Department of Revenue said Thursday that it will rebid the contracts awarded earlier this year to Alternative Opportunities Inc., because the contract rules barred subcontractors from handling the main functions of the offices.

Revenue Department spokesman Ted Farnen said that Alternative Opportunities — a Springfield-based not-for-profit that assists children and people with disabilities — planned to use its chief financial officer as the office manager. After awarding office contracts throughout the year, the Department of Revenue was told that the executive was paid by a management company.

Reggie McElhannon, a spokesman for Alternative Opportunities, said the organization was not trying to hide anything and plans to rebid for the contracts. He said the group has corrected its proposals for office contracts not yet awarded.

"The intent was to be aboveboard, and the fact that it has raised a concern, we are willing to go back in," McElhannon said.

The 10 license offices will remain open and Alternative Opportunities will continue managing them while the contracts are rebid. The affected offices are in Ava, Camdenton, Creve Coeur, Joplin, Nevada, Mo., Olivette, Poplar Bluff, Republic, and Springfield. Alternative Opportunities has bid on eight more offices, but the state has not yet awarded the contracts.

Missouri's license office contractors charge fees for processing vehicle registrations and driver's licenses and for collecting vehicle sales taxes. In high-traffic areas, contractors can make a healthy profit from the transaction fees. Subcontractors were barred from the offices' major functions to help state officials hold the office contractors accountable.

Revenue Department Director Alana Barragan-Scott said reopening the competition to run the offices seemed fair.

"After studying the issue, we determined that rebidding the offices was the right thing to do," she said. "Some may be disappointed with the decision, but it was made only after considering the state's standard bidding procedures."

Earlier this year, Missouri passed a law that requires driver's license offices to be awarded through competitive bidding. Under the old system used for decades, the state's governor could award offices to whomever he wanted.

Gov. Jay Nixon signed the legislation at a public ceremony in a Springfield office managed by Alternative Opportunities.

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