Business

City Comptroller audit slams DOE milk contracts

March 3, 2014 Heather Chin

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The U.S. Department of Justice will investigate the Department of Education following an audit by Comptroller Scott Stringer that claimed the agency needlessly put taxpayers at risk by having inadequate review [of] the financial capacity of the vendors awarded milk contracts and inadequate procedures for detecting the warning signs of possible collusion between bidders.

According to the audit, the three winning bidders began as competitors, [but] became business partners within two months of the contracts being awarded. Beyer [Farms] and Elmhurst [Dairy], which had won the lions share of the distribution bids in August and September 2008, subcontracted the majority of that work in October 2008 to their former competitor, Bartlett [Dairy].

Beyer went bankrupt in 2012following years of debt.