The Metro board awarded an $8.4 million diesel fuel contract yesterday to a company that is suspected of violating the terms of a similar contract last year and is under investigation by a grand jury and the U.S. attorney's office in the District.
An internal Metro investigation this year raised questions about whether the fuel supplier, Petron Oil Corp. of Lionville, Pa., violated the terms of a $7.9 million contract by not sharing the business with a minority-owned firm.
Petron, which buys and sells oil products, has said it complied fully with the contract to supply diesel fuel for Metro buses during the fiscal year that ended June 30.
Petron had promised in the contract to buy almost 35 percent of the fuel it sold to Metro from Ventco Distributors Ltd. of Philadelphia, a black-owned firm. Although Petron supplied Metro's diesel fuel, it did not buy any from Ventco because of disputes between the two companies, according to Petron and Ventco.
Metro investigators, after conducting their initial inquiry, contacted the U.S. attorney's office. However, Metro officials said they do not know the scope or focus of the U.S. attorney's investigation, or which court convened the grand jury.
Metro officials said the investigations, which have not produced any charges, do not constitute a reason for denying Petron the contract.
"There were no grounds for not giving it to Petron," Metro spokeswoman Beverly Silverberg said.
Metro disclosed the investigations late last month as it wrestled with the problem of what to do about the new contract for the year that began July 1.
Petron was again the low bidder. As required by Metro, the bid included a list of the minority firms that would serve as subcontractors.
The Metro board postponed awarding the new contract and granted Petron a 31-day, $705,831 contract to continue supplying diesel fuel until the end of this month. This was to allow Metro to "gather more information" about the company's ability to fulfill the terms of a new contract, said Edward T. Rhodes, director of Metro's office of procurement.
Rhodes' office determined that Petron was capable of performing the required work and meeting the contract's requirement that at least 35 percent of the contract funds go to a company owned by a member of a minority group, or other disadvantaged group, said Silverberg.
So the board awarded Petron a $8.4 million contract for the remaining 11 months of the current fiscal year. The value of the contract is based on an assumed diesel fuel price of 53 cents a gallon, and is subject to revision based on changes in the price of oil.
In other action, the board voted to spend $691,560 for equipment to remove ice from the electrified third rail that powers Metro trains, and $537,588 to prevent the buildup of snow and ice on the track switches.
Metro was forced to shut down service to its 26 outdoor stations during heavy snow in January because of its inability to keep the rails free of ice.
General Manager Carmen E. Turner also announced the resignation of Forrest T. Gay III, Metro's assistant general manager for design, construction and facilities maintenance. Gay said he is going to work in September for an engineering and construction firm in Virginia.