NYC's screwup on car auction contract will cost taxpayers $6M: lawsuit

Big Apple taxpayers will be taken for a $6 million ride because the city illegally hired a new firm which charges 60 percent more than its predecessor to sell surplus vehicles, according to a new lawsuit.

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Big Apple taxpayers will be taken for a $6 million ride because the city illegally hired a new firm — which charges 60 percent more than its predecessor — to sell surplus vehicles, according to a new lawsuit.

Online auctioneer PropertyRoom.com alleges that blunders by the Department of Citywide Administrative Services left them in the dark that services it provided for nearly 20 years had been turned over to a rival firm last year.

In December, DCAS replaced PropertyRoom and awarded rival Insurance Auto Auctions Corp. a five-year $5.93 million contract.

However, the suit filed in Manhattan Supreme Court contends the city will now be paying out an additional $5.95 million over the length of the contract in “buyer’s premium” charges, because IAA’s rates for this charge are higher than PropertyRoom’s.

In an April court affidavit, PropertyRoom CEO Aaron Thompson insisted the city will lose additional money under the new contract because his firm’s website reaches many more potential buyers than his competitor.

“Less demand, and less buyers, results in lower sales prices for auctioned property, which results in less money returning to the city following the sale,” he wrote.

Based on a fleet reduction plan authorized by former Mayor Bill de Blasio, the switch to IAA will cost DCAS the extra $5.95 million over five years, the suit alleges.

PropertyRoom CEO Aaron Thompson insisted the city will lose more money under the new contract because his firm’s website reaches many more potential buyers.

However, Thompson told The Post he believes the IAA contract could potentially cost the city millions of dollars more because Mayor Eric Adams has pledged to make more cuts to the country’s largest municipal fleet than what de Blasio proposed — all while inheriting the IAA contract from the previous administration.

“Mayor Adams should not use this misguided contract for his fleet reduction plan,” said Thompson. “It’s a waste of taxpayer money.”

Adams exclusively told The Post in January he wants to slash the fleet to a “bare bones minimum,” which includes dropping it to at least levels seen during Michael Bloomberg’s time as mayor nearly a decade ago, when it was under 26,000 vehicles.

The suit alleges the contract was illegally awarded. PropertyRoom.com
City lawyers have called the suit meritless. PropertyRoom.com

Adams has already announced plans to cut 855 vehicles from the fleet of nearly 30,000 during the next fiscal year beginning July 1.

The suit alleges the contract was illegally awarded and, therefore, should be voided and rebid.

It accuses DCAS of botching public notices by wrongly giving out four different PIN numbers for prospective bidders to track the contract, which was first advertised in 2019.

Typically, a single PIN is used per procurement. PropertyRoom alleges the confusion led it to believe DCAS wasn’t immediately moving ahead with a new pact — and that it would at least be temporarily retained as it has in past years.

However, city lawyers said the lawsuit is meritless — especially since PropertyRoom never submitted a bid.

“Their claims are baseless and we’ve moved to dismiss the case,” a city Law Department spokesman said.

“How would the city know that it would be paying more if PropertyRoom never submitted a proposal? We stand by the contract process, which was proper and in compliance with all procurement laws.”

Lawyers for IAA did not return messages, but they filed legal papers last month seeking to dismiss the suit that insisted PropertyRoom’s allegations were meritless.

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