Academy Express bus company, paying $20.5M fraud settlement, seeks NJ Transit contract

The Hoboken-based bus company that is still paying off a historic settlement with the state Office of the Attorney General is up for another contract with NJ Transit, the public transportation agency it was accused of defrauding.

Academy Express, LLC, which agreed to a $20.5 million settlement of fraud allegations in 2022, is being recommended for an $85.1 million, five-year contract to service nine bus routes in Passaic County for NJ Transit.

NJ Transit’s board is expected to vote on the item at Wednesday evening's board meeting.

Board documents indicated that at least one other company bid on the contract, but NJ Transit's procurement calendar showed that only Academy bid on the project. An NJ Transit spokesman did not immediately respond to a question about this and what NJ Transit bus operations' benchmark cost was, which would indicate what it would cost the agency to operate the routes in-house instead of contracting them out.

The Passaic bus routes that will be affected are the Nos. 702, 705, 707, 709, 722, 744, 746, 748 and 758. The contract would start Sept. 1 and extend through Aug. 25, 2029.

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Academy has had no NJ Transit contracts since 2021

Academy has not had a contract with NJ Transit since 2021 . In November 2020, then-New Jersey Attorney General Gurbir Grewal intervened in a whistleblower lawsuit accusing Academy and several of its employees of defrauding NJ Transit out of more than $15 million over a six-year period.

The attorney general’s investigation alleged that Academy employees kept two sets of books that showed the real number of bus trips that were serviced and another set that showed fabricated numbers of bus trips serviced. The latter was allegedly used to support invoices to defraud NJ Transit.

Problems with Academy, no-show buses and NJ Transit’s lackluster accountability of contractors like Academy were flagged as early as 2006 , according to NJ Transit’s internal audit documents exclusively obtained by NorthJersey.com.

Just weeks after Academy agreed to the settlement with the Attorney General’s Office in February 2022, the bus company was up for two contracts to service seven bus routes in Hudson County for about $57.4 million. But in a rare move, NJ Transit’s board members unanimously rejected awarding the two contracts to Academy, saying it wasn’t ready to uphold the contracts and settlement agreement; others said the company didn’t meet the agency’s standard of being the “lowest responsible bidder.”

How can Academy bid on new contracts?

The Attorney General’s Office did not preclude the company from bidding on contracts with NJ Transit, which has forced agency officials to recommend hiring the company when it has the lowest bid.

However, the settlement agreement required Academy to hire an independent monitor and provide proof of updated policies to ensure accurate reporting of missed trips, procedures for road supervisors who monitor bus routes, and new policies for bus operator training, including proper use of Clever Devices.

Clever Devices is the GPS monitoring system NJ Transit installed in all buses used by private operators to track what routes they do and do not service, whether they’re late, and other data points.

Academy is also required to hire an independent integrity oversight monitor. The monitor has several responsibilities, including ensuring Academy’s proper maintenance of records and accurate billing, that accurate supporting documents are submitted with invoices to NJ Transit, and that Academy has a policy against retaliation toward those who complain about misconduct. Academy is required to cooperate fully if the monitor provides verbal and written reports to NJ Transit.

NJ Transit did not immediately provide emailed answers to questions about whether Academy has provided all the requisite paperwork and hired the monitor.

A representative for Academy declined to comment.

This article originally appeared on NorthJersey.com: Academy Express bus company, paying $20.5M fraud settlement, seeks NJ Transit contract