RALEIGH, N.C. (Feb. 20, 2009) — The state of North Carolina has issued its first multi-award contract for retread tires, after nearly three decades of a single-award contract to the consistent lowest bidder.
Issued Jan. 9, the multi-award contract runs until Nov. 30 of this year and is worth an estimated $4 million altogether.
It resulted from a bill passed recently by the North Carolina legislature that encourages multi-award retread contracts for the state, although the state's procurement contracts traditionally are single-award.
The new contract's supporters say it will bring fairness to North Carolina's retread procurement procedures. But Bobby White—vice president of White's Tire Service Inc. of Wilson, N.C., the state's sole contractor for retreads from 1981 until now—said he was the victim of political meddling, and that he has always provided the state with superb bead-to-bead retreads for the least possible price.
Controversy over retread procurement in North Carolina began in 2007, when a state audit suggested White's Tire had overcharged the state more than $361,000 for spot repairs. White replied that the audit was inaccurate, and that his company generally performed many more spot repairs than the three per tire the state allowed him to charge for.
Nevertheless, a 2008 study from Smithers Scientific Services Inc. recommended that the state consider multi-award contracts for retreads. The bead-to-bead retreads from White's Tire performed excellently in use, Smithers said, but so did pre-cure retreads both from White's and from White's competitors.
The legislature then acted to write and pass a bill that called on the North Carolina Department of Administration to consider multi-award contracts for retreads, as well as other changes to retread contracting, such as an end to charging for spot repairs.
Department of Administration officials devised the new contract in a closed-door meeting. In that contract, White's Tire—the state's only manufacturer of bead-to-bead retreads—remained the sole purveyor of that product.
However, the contract for the first time also allows for procurement of pre-cure retreads of several different types and sizes. In those areas, White's shares the contract with two other North Carolina retreaders: Snider Tire Inc. of Greensboro and Maness Tire and Recapping Inc. of Rockingham.
The new contract does not allow charges for spot repairs—only section repairs and nail holes. In bidding the new contract, White's Tire—unlike Snider Tire and Maness Tire—took the path of not charging for repairs at all. White's Tire was the low bidder in all pre-cure areas except nondirectional tires, size 1400R24, in which Maness Tire edged it slightly, $315.69 per tire vs. $331.52. Snider's Tire bid $446 for the same tire but also offered an expected mileage of 36,000 vs. 26,000 for White's Tire and 25,000 for Maness Tire.
Russ Hunt Sr., president of Snider Tire, welcomed the new contract. “This is a step in the right direction,” he said. “Being able to get through the door, when we couldn't before, is a great thing for us.”
White, however, said that by changing the retread contract the state fixed what wasn't broken.
“For 30 years White's Tire has gone to the bid table and had the lowest bid,” he said. “We proved we have a very good retread and fantastic service. With the new contract, I delivered the knockout blow at the bid table when we went to no charge for repairs.”
White said the retread contract's administrator told him the legislature had mandated multiple awards for retreads. But James Staton, the state of North Carolina's chief purchasing official, said there was no mandate—merely a desire to fulfill the legislature's express wishes.