Case Study: Road Maintenance

Case Study: Road Maintenance

In the fall of 2001, the Oklahoma Department of Transportation signed a $36.3 million annual contract with Virginia Maintenance Services Inc. to provide highway maintenance in the Tulsa and Oklahoma City areas. Just seven months into the contract, the company expressed a desire to terminate the contract after it concluded that the parties were at impasse over several matters.

The dispute apparently stemmed from non-performance penalties assessed by the Department of Transportation. In the last five months of the contract, the department penalized the company by withholding nearly $900,000 for problems in the Oklahoma City area and $142,000 in the Tulsa area. For example, according to City of Tulsa officials, the company failed to clear a seven-inch snowfall from an urban area highway according to contract specifications. In addition, there were allegations that accidents on exit and entrance ramps were caused by how the company applied certain chemicals to the roads to prevent freezing. Their method made the roads particularly slick. Even before winter, city officials complained about how Virginia Maintenance Services mowed the rights of way along highways within the city.

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