State to end questioned tire repairs

RALEIGH -- The state no longer will pay contractors to make "spot repairs" on retreaded tires that might have cost North Carolina taxpayers more than $360,000 in overcharges per year, legislators learned in a hearing Tuesday.

Responding to a recent investigation by state Auditor Leslie Merritt Jr., state officials will require a single price that folds the repairs into a lump-sum charge per retreaded tire used by school buses and many other government vehicles statewide.

That ends surcharges up to $36 per tire on a product that, under the current contract, should be about $81.

"There will be no more separate charges for spot repairs," Ralph Edelberg, of the state Division of Purchase and Contract, told members of a General Assembly committee reviewing the audit.

At issue is the state's retread contractor, White's Tire Service of Wilson, and its charges for three repairs on more than 99 percent of tires it fixes for the state and many school districts, including Guilford and Randolph counties.

"Everyone we interviewed (in the tire industry) said this percentage of tires is extremely high," audit supervisor David King told the legislative group, the Transportation Oversight Committee.

Some other school districts in the Piedmont Triad -- including Davidson, Forsyth and Rockingham counties -- switched retread vendors after questioning White's Tire surcharges.

State administrators also told the committee they plan a study with N.C. A&T to see, among other things, if retreads are worth the cost compared with new tires.

Bids on a new retread contract initially were to be opened this week, but, after the audit, were pushed back a month. Now, it appears they'll be delayed further.

The transportation committee Tuesday suggested delaying for several more months until A&T completes preliminary research.

To conserve resources, state government requires retreaded tires on rear wheels of school buses and other heavy vehicles.

White's Tire has had all or part of the state contract since 1976. It has all the current pact, which the audit valued at $2 million a year in sales.

White's Tire makes spot repairs to small imperfections in worn casings before new tread is added. Most vendors see those repairs as unnecessary or do them at no separate charge, the audit found.

But the current contract allows White's Tire to bill as much as $12 each for up to three "spots" a tire.

Covered by new tread, there's no way to prove a repair was needed or actually done, King said.

Edelberg said other changes in the new contract include requiring a 25,000-mile warranty on retreads and allowing an additional charge to fix nail holes, which are big enough for customers to verify the work was done.

He said the contract will be split in two, with the larger part set aside for a retreading process used by White's Tire and few others.

Competitors complain that shows state administrators are biased toward the Wilson contractor.

State Rep. Nelson Cole, a Rockingham County Democrat who serves as co-chairman of the transportation committee, said he also is concerned by seeming favoritism that Raleigh has shown White's Tire.

"What bothers me is that some of these people in our departments seem to be brainwashed," said Cole, who owned a car dealership for years. "I've never experienced anything like this."

Rep. Earl Jones, a Democrat from Guilford County, said he is pleased research will determine whether using retreaded tires makes sense. "I'm surprised a study like that hasn't been done before," he said.

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