NJ Transit awards $85M contract to bus company accused of fraud. Which routes are affected

NJ Transit’s board has unanimously approved a five-year, $85 million contract for Academy Express LLC to provide bus service on nine routes in Passaic County — despite recent fraud allegations against the Hoboken-based company.

None of the board members commented on their decision Wednesday to approve the contract, despite having faced criticism from members of the public for rubber-stamping numerous controversial items recently.

The approval is a departure from a stance the board took unanimously two years ago when Academy was up for a $57.4 million contract to provide bus service in Hudson County. Board members voted it down then because they said the company, though the lowest bidder, was not the “lowest responsible bidder” — and they were concerned Academy might not uphold the terms of the settlement agreement approved just weeks earlier .

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Asked what confidence the agency has in the company this time around, Kevin Corbett, NJ Transit's president and CEO, said, “Trust but verify.” He noted that the agency has made improvements in its accountability processes and updated its GPS tracking technology on buses.

“Right now, they are an acceptable, credible bidder and they are complying, by everything we’ve seen, so there is no reason not to award it to them,” Corbett said.

Academy was the lone bidder on the contract.

The contract, which starts in September, comes as Academy pays off a $20.5 million settlement reached with the New Jersey Office of the Attorney General in 2022 after facing accusations of committing fraud against NJ Transit over a six-year period.

The company and several of its employees are accused of invoicing for tens of thousands of bus trips but not providing the service, l eaving an untold number of riders stranded . Problems with Academy — and with NJ Transit’s ability to monitor the contract — were detected by internal auditors as far back as 2006 , according to documents obtained by NorthJersey.com.

The Attorney General’s Office confirmed that Academy is up to date on its settlement payments; it still owes $13.3 million over the next seven years.

Asked whether Academy has upheld other parts of the settlement agreement, including updates to its written policies regarding accurate reporting of missed trips, training for bus operators and road supervisors, NJ Transit spokesman Jim Smith said, “NJ Transit has confirmed that Academy has thus far satisfied the compliance terms of the settlement agreement, including Academy’s retention of an integrity oversight monitor.”

Neither the Attorney General's Office nor NJ Transit provided the name of the integrity oversight monitor.

The Passaic bus routes that will be affected are the Nos. 702, 705, 707, 709, 722, 744, 746, 748 and 758.

Community Transportation, a subsidiary company of Paramus-based Coach USA, was the most recent operator of the Passaic bus routes, but the company did not bid on the contract this year. Coach also ended bus service on three routes around Newark last year.

“There is a very limited pool of private carriers left, particularly those with buses and depots," Corbett said. "We want to see more competition, not less, but we know it’s a very tough market right now for private carriers.”

This article originally appeared on NorthJersey.com: NJ Transit awards $85M contract to bus company accused of fraud. Which routes are affected