Memo on Atlantic Express Transportation Corp. (“Atlantic Express”) Chapter 11 Bankruptcy Filing
TO: School Districts Affected by the Atlantic Express Chapter 11 Bankruptcy Filing
FROM: NYSED Office of Pupil Transportation, Educational Management Services
The State Education Department (SED) recognizes that the mid-school-year bankruptcy of a major pupil transportation provider may significantly disrupt your district’s transportation operations. However, we have been in contact with several affected school districts and have been impressed with the tremendous efforts that you and your colleagues have been making to ensure that any transition to a new transportation provider goes smoothly.
In an effort to be of assistance to affected school districts,, we have developed the following guidance for districts to be aware of as they shift from one transportation provider to another.
Assignment of Contract Form:
Since many existing transportation contracts held by Atlantic Express have been sold (‘assigned’) to other vendors, you must file an “Assignment of Contract Form” with our office. The Assignment of Contract Form can be found on our website at the following link (http://www.p12.nysed.gov/schoolbus/contracts/pdf/assignment_of_contract.pdf). You must submit this form to: Office of Pupil Transportation, NYSED, Room 876 EBA, Albany, NY 12234. You may submit it via email to Bill Demski: Bdemski@mail.nysed.gov.
Please be advised that NO material changes can be made to the terms and conditions of these contracts without rebidding the contract. If a vendor asks you to make any material changes to these contracts, you should contact our office immediately and plan to re-bid the contract.
Additional Required Submission with your Assignment of Contract Form: You should also submit a copy of any relevant documents, court orders or directives, signed by the bankruptcy court, documenting or evidencing the assignment of the contract to the new vendor with your assignment of contract form.
- Status of Performance Bonds in your existing contracts? If they exist, they may reduce the cost of any transition to new a transportation provider.
- Is your district entitled to any liquidated damages under the previous contract with Atlantic Express?
- Be sure to track final payments on invoices paid to Atlantic Express to ensure that you receive proper credit for all payments made.
Districts should not assume that the assignee will renew the contract for 2014-15 school year. Therefore, affected school districts should begin the renewal process now, or contemplate re-bidding a new contract.
- If re-bidding, SED recommends that affected districts begin this process as soon as possible.
- If contemplating re-bidding the contracts, affected districts should consult with neighboring districts, or BOCES, to determine if they are interested in sharing services – since multiple districts in your region may be looking to re-bid new contracts at the same time. Please contact SED if you need assistance.
- Get updated insurance binders from any assignee and/or new transportation contract provider.
- Obtain new approvals from the Department of Motor Vehicles for bus drivers for any assignee and/or new transportation contract provider.
- If the assignee and/or new transportation contract provider will be using a new terminal, affected districts should determine if there a cost impact for deadhead mileage (depends on the pricing methodology in the contract).
- If any affected districts determine they need to re-bid the contract, they can use an emergency contract for one month. Please contact SED with any questions on the emergency contract process.
- State Aid:
- Contract Costs: We will use the assignment of contract form and other documentation you provide from the bankruptcy court to ensure that any costs associated with the contract under the assignee will be recognized as approved transportation cost and, therefore, eligible for State aid under Education Law §3602(6). Therefore, please be sure to submit all required documentation.
- Legal Expenses: We are aware that several districts have engaged legal counsel to work through the issues associated with the bankruptcy. We remind affected school districts that legal expenses are not aidable transportation expenses, per State Aid guidance at: https://stateaid.nysed.gov/trans/aidable_nonaidable_list.htm.
DOT Inspections: For districts that may have purchased buses from Atlantic Express as part of the bankruptcy, you should know that we are in contact with our colleagues at the Department of Transportation to ensure that the transferred assets, buses, can be quickly inspected in order to ensure that they can be back on the road as quickly as possible.
Addendum: Information to submit to SED
- The Assignment of Contract form.
At the bottom of that form, please provide a reference to the contract asset sale that was conducted by the court. This should be the date filed and the court docket number, as shown in the first two columns of the sheet at: http://www.kccllc.net/metro/document/list/3710?nh=1; Find the new contractor and confirm the specific contract.
- A copy of the front page of the court document that shows the assignment of contract; and the schedule 2.0.1 that shows the specific contract number that was assigned.