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Pumpin’ Ain’t Easy

Marylanders Pay a Tiny Company 15 Cents Per Gallon To Keep State Vehicles Gassed Up--Maybe More Pennies Than We Need To

Christopher Myers
GASSY: Much of the gasoline burned in--and by--the state pumps out of this Curtis Bay tank farm.
Christopher Myers
GOVERNMENT FUEL: State employee Richard Baker gasses up at the state office complex on West Preston Street.
FOUNDING FATHER: Company founder Lewis Dixon.
The City Paper Digi-Cam™
UNREFINED: Commercial Fuel System has its offices on the second floor of this building in Mount Airy
The City Paper Digi-Cam™
OS AND 1S AND $S: Commercial Fuels President Mark Dixon stands beside the file server that tracks about 11 million gallons of gas, diesel, natural gas and motor oil bought by the state each year.
Christopher Myers

By Edward Ericson Jr. | Posted 8/31/2005

Richard Baker gasses up a brand-new Chevy Cobalt at the state office complex on West Preston Street. The 14-year milk inspector for the Maryland Department of Health and Mental Hygiene is on the road four days every week, driving the state-owned sedan to dairy farms all over the state. Baker racks up thousands of miles and burns through hundreds of tankfuls of state-provided gasoline that he fills up at any of the 92 Maryland-owned fuel depots. “I don’t think I’ve ever been at a place where it’s been out” of gas, he says.

Baker doesn’t know how much the state pays for gas; the pumps have no price reading. But Baker says he’s sure the state gets a very good deal. He gestures to a huge sign hanging under the canopy. “They used to put up here what they save by using” the state-owned pumps, he says. He adds that those figures haven’t been posted “in a while.”

Maryland Department of General Services spokesman Dave Humphrey, was not able to give a definitive price per gallon of unleaded this week, saying that the woman who usually handles the calculation is on vacation. Using the formula contained in the state’s gas contract, City Paper estimated the state’s price per gallon of unleaded for the week ending Sept. 6 at $2.45 per gallon; Humphrey said that he could not confirm such a figure. Whatever the exact fuel price, Maryland is paying on average between 20 and 25 cents per gallon less than the skyrocketing retail price that ordinary consumers pay. But it appears to be paying much more than many other states—and at least one Maryland county—pays.

The reason for this is an unusual contract the state entered into in 1989, which it has kept in force since, with virtually no chance for any other bidder to compete for it. The state claims the contract has saved taxpayers millions of dollars. But in reality, it appears Maryland taxpayers are now spending at least a half-million dollars more every year than they need to—and possibly much more than that.

The story of how that came to be involves the unaccounted for theft of gasoline in the 1980s by state workers, the “hobby” of a rural mayor, the curious open-door policy of a state worker who wrote bid specifications, the unique software written by a former rocket engineer-turned-computer scientist, and the state’s 1997 decision to continue paying for nearly $2 million worth of equipment it had already bought.

 

To begin to understand the Maryland Statewide Fuel Dispensing and Management System, as its overseers at the Department of General Services proudly call it, one must travel some 33 miles west from the state office complex in Baltimore to the tiny town of Mount Airy (pop. 7,647).

There, the brains of the state’s fuel management system can be found above the St. James Episcopal Church Thrift Store, at the top of a narrow flight of stairs at 232 S. Main St. Just inside the worn wooden door are the shabby offices of the state’s fuel management contractor, Commercial Fuel Systems. The plaster and pressed-tin walls are sagging under layers of paint; one wall sports a hole the size of this newspaper, unfolded.

“It’s pretty spartan,” acknowledges Mark Dixon, president of Commercial Fuel Systems.

In one windowless room with a creaky wooden floor sits a refrigerator-sized silver box housing a Compaq file server. Through this rack of computer equipment, Commercial Fuel controls the 92 fuel depots supplying 11,000 state vehicles, including Maryland State Police cruisers, standard-issue state-employee sedans and SUVs, prison vans and buses, and even snow plows from the Department of Transportation. This year the state will buy some 11 million gallons of gasoline, diesel fuel, natural gas (for a handful of vehicles), and motor oil, and every one of them will be ordered and counted using Commercial Fuel’s computer system, which runs a computer program called Fuel-Net that is unique to Maryland. According to Dixon, keeping track of it all is a lot of work.

“We’re not in this to get rich,” says Dixon, who on this mid-August day is dressed in jeans and a Harley Davidson T-shirt with a Sprint PCS cell phone on his belt. “We’ve saved the state I don’t know how many millions of dollars.”

After buying fuel wholesale, Dixon’s company is paid about 15 cents above its cost for every gallon of gas and diesel the state burns—about $1.76 million per year. With the first 3 cents of that money, according to the contract, Dixon pays two trucking companies to deliver the fuel into 194 separate storage tanks around the state. The remaining 12 cents pays for rent, utilities, spare parts, and part of the salaries of Commercial Fuel’s 14 employees. Three of those employees do nothing but process data and send out monthly reports to the state agencies using the system, showing exactly when, where, and how much of what fuel and oil each employee puts in each state vehicle. The reports not only account for all the fuel used, down to the fraction of a gallon, but state agencies can even track which vehicles need an oil change and which vehicles (or drivers) are getting suspiciously poor mileage.

“We’re saving them so much money, I’m not even allowed to tell you,” Dixon says.

Part of the savings comes from employee man-hours not spent dealing with paperwork just to fill up the tank. Each state trooper, department head, or other state worker assigned to drive state vehicles (roughly 17,000 employees in all) gets a card from Commercial Fuel that identifies them to the gas dispenser. Each vehicle is also assigned a card to identify it. To get gas from the state pump, the worker must swipe both cards through the credit card-style reader, then key in the vehicle’s odometer reading. The employee then just fills up and goes. “The state police told us years ago we were saving each trooper up to two hours a month just by using [magnetic stripe] cards” rather than the old method of filling out forms, Dixon says.

All the data from the card swipes and odometer readings feed back to Commercial Fuel’s computer in Mount Airy. All of it is printed out, assembled in thick binders that hang on racks in the hallway, and then crunched into the reports sent on to the state. In addition to helping the state keep track of its fuel use and its vehicles, the level of detail inherent in the system is also designed to keep state workers from gassing up their own cars—or boats or campers or lawn mowers—on the state’s dime.

Dixon says Commercial Fuel struggled for the first 10 years of its contract with the state, and faces tough times even now whenever prices drop. That’s because, in an unusual move, the Maryland contract pays Commercial Fuel as the fuel is pumped into state vehicles, not when it’s dumped in the ground tanks. The price Dixon gets each week is based on the average Baltimore wholesale price posted by the Oil Price Information Service, an industry benchmark, the Friday before. When prices drop, Dixon must sell the state gas he buys at last week’s higher price for this week’s lower price. That costs him money. “In December, gas dropped 28 cents, and that wiped out my year’s profit,” Dixon says.

But when prices increase, Dixon’s company makes more than the mandated 15 cents per gallon by selling fuel to the state for the latest, higher price. And a lot of the fuel sits in state tanks for quite a while, its price increasing weekly, before being pumped out at the latest price. “Some of them don’t turn over their inventory for months,” Dixon says. “Some of them get three loads per year.”

 

To understand how unusual the state’s gas contract is, it helps to know how this kind of thing is usually done, and what other governments pay for fuel.

City Paper became curious about the state’s fuel management system on July 26, when The Sun published a survey of prices area governments were paying for their gas. Baltimore County’s fuel-buying consortium, which includes Baltimore City, plus Anne Arundel, Carroll, Harford, and Howard counties, reported a price of $2.07 that week for unleaded gas, while the state’s cost for the same product was $2.22, according to Department of General Services’ Humphrey. Retail price for ordinary consumers that week averaged about $2.35, according to the American Automobile Association.

The Sun’s piece, by reporter Lisa Goldberg, explained that governments spend less than private consumers for fuel because of “bulk buying,” but that’s not so. Governments pay less because they’re exempt from gas taxes. The state and county’s costs, for example, do not include the 18.4 cent-per-gallon federal tax on gasoline. Also, state and local governments buy their gas wholesale, skipping the 10-cent markup typically taken by retail gas stations and convenience stores. So, starting out, governments can buy gasoline for about 28 cents less than ordinary taxpayers.

But the governments still have to pay to get the fuel from the terminal—where a pipeline, tanker, or refinery pumps it out—to the state-owned underground storage tanks at various state police barracks and public works yards. And most governments use a competitive bidding system to get the best price. New York and New Jersey, for instance, bid out their fuel-delivery contracts every couple of years. The contracts include a fixed price for transportation, plus the wholesale market price for fuel itself, which fluctuates daily.

New Jersey posts its contract price for gasoline on the internet. On July 26, that state was paying $1.76 for unleaded gas—46 cents less than the state of Maryland. New York state splits up its fuel delivery into more than 70 different contracts based on geographical area, then bids separately for different fuels. The New York County (aka Manhattan) contract price for July 26—one of the state’s highest-priced contracts because of its small volume—was $1.914 per gallon. That’s more than 30 cents less than the Maryland state government paid for its gas on that day. (Adding the 23.5 cent Maryland state tax, which is included in the price Maryland pays for its gas, would decrease the hypothetical discount New Jersey received over Maryland to 22.5 cents per gallon. If it paid Maryland tax, New York would be getting only about a 7-cent discount on gas delivered in New York County.)

Then there is the inventory control system—the computer programs and file servers like the ones Mark Dixon oversees above the thrift store. There is maintenance on the pumps, replacement of hoses and fuel nozzles ripped off by careless workers who drive away before removing the nozzle from the tank. And there are private companies that specialize in all of these services, almost all of them looking for more business.

Baltimore County works like New York, New Jersey, and most other state, county, and municipal governments—it puts the various aspects of its fuel-service needs out for bid and awards contracts generally to the lowest responsible bidder. Because of this, Baltimore County spends a total of about 8 cents per gallon over the wholesale price. That 8 cents includes the cost of its own card-lock system and maintenance on its pumps and equipment “not to exceed $45,000” annually, as stated in the maintenance contract, which is held by none other than Commercial Fuel Systems.

That’s almost 50 percent less than the 15 cents per gallon the state pays for its fuel.

Dixon says these figures don’t capture all of the county’s costs, because county workers have to arrange for fuel deliveries, environmental compliance, data processing and record keeping. “Once you start figuring the hidden costs, it’s more than what the state spends with us,” he says.

 

Perhaps coincidentally, that 8 cent-per-gallon price for fuel delivery and management that Baltimore County pays today is very close to what Commercial Fuel used to charge the state under its contract. But let’s start at the beginning, with Commercial Fuel Systems’ founding.

According to state records, Commercial Fuel Systems Inc. was born on July 11, 1977. Its principal and resident agent was Lewis C. Dixon. From 1972 until 1986, Dixon, a Democrat, was also the mayor of Mount Airy.

Lew Dixon died in 1999 at the age of 77. He was a beloved figure in the town, and a charter inductee into the Mount Airy Hall of Fame, which is housed just across the street from Commercial Fuel’s offices.

Technically the 1977 founding makes Commercial Fuel “one of the oldest fuel management companies in the country,” Mark Dixon, Lew’s son, says. But he also says it was little more than a “hobby” for his father, who ran it out of an old gas station made obsolete by Interstate 70. “It was pretty much like a fuel club,” Dixon says, cheap gas peddled just above wholesale price for local residents and other friends via a computer-automated pump. “It had a key access—I think he might have moved eight or nine thousand gallons a month.”

Though modest in the beginning, Lew Dixon’s idea of an unattended, tamper-proof, computer-controlled fuel depot was prescient. And while Dixon refined his concept, a man named William Robel dropped the same idea into the state government suggestion box.

“Governor Schaefer was elected at the time [1987] and he wanted his secretaries to come up with some cost-savings programs,” says Robel, who served as manager of the inventory management division at the Department of General Services from 1978 until he left in 1992; he now lives in Glen Arm. “I had submitted some already—out of the four from our department two or three of them were mine, and one of them was the gasoline.”

By this time, Robel had already written a computerized inventory control system for the state, counting all the desks, typewriters, file cabinets, and the like. Fuel was another matter, though. “Gasoline was really out of control when I got into it,” Robel explains. “State accounting agencies lumped gasoline, auto parts, and tires into one big lump. So nobody could tell you how much gas they were using. Nobody tried.”

With nobody minding the store, it’s a safe bet that some state workers were stealing gas, Robel says. “At the time all state drivers were issued their own gas cards and they’d use them to gas up their own cars,” he says. “Take the state office building, in Annapolis. These people were issued a credit card—I had one. Any station would accept it. They’d give you whatever you wanted.”

Robel’s suggestion cleared the governor, and he was tasked with writing a request for proposal (RFP)—a document soliciting bids for a job or service and specifying guidelines for those bids—to create an automated fuel system for the state’s fuel depots. Robel says he then researched how such programs were usually done.

“[New York City] had instituted an automated system, [so] I called them,” Robel recalls. “I asked for data. [The guy] said, ‘I can’t give you any. It’s not available.’” It turns out that the city had saved “like a million gallons of gasoline or something,” Robel continues, but that was only an estimate. There had been so much gas stealing going on, he contends, that “the police department was destroying the [fuel] records because they were embarrassed.”

Robel says he also checked with Connecticut, which was then experimenting with a card-lock system for state-owned trucks. But that state offered little useful information, he says. So he sat down to write the bid specifications for Maryland’s system. Lew Dixon came calling soon afterward.

“Lew found out somehow that I was doing the specs, so he contacted me, and I had to see him,” Robel says. “He was a nice guy. He helped me out [with the RFP].”

Dixon brought an associate named Bill Branner to some of the meetings. “I don’t know that you’d call it ‘help,’” Branner says now. “I remember one time Bill Robel came out to my office. He asked questions [like], ‘What can we expect the automated system to do?’”

Branner knew the answers. He had worked for IBM testing NASA’s Saturn V rockets before switching to computers. In 1980, he founded Mount Airy Software Services, now known as Hi-Tech Data Systems Inc., and wrote the computer code that controlled Dixon’s little gas station. Though both Dixon and Branner say Branner never worked out of Dixon’s office, Hi-Tech’s Maryland corporate registration listed its address as in care of 232 S. Main St. in Mount Airy—the office of Commercial Fuel Systems.

Branner says Lew Dixon always had larger plans for his fuel club.

“Lew had it in mind that he could sell a heck of a lot more gas if he could convince the state to lease” his system, Branner says. “However it came about, I really don’t know. The next thing I know, the state of Maryland is going to put out an RFP to put in a statewide fuel management system. Naturally Lew was going to bid on the thing.”

Branner says any politics involved in the deal were a mystery to him. “I was more or less the consultant,” he says. “I was the software dude. I didn’t have much to say about what Lew and Robel were doing.”

Robel says he developed a close working relationship with Commercial Fuel during the six months it took him to develop the RFP: “We worked together in developing different concepts.” Robel says he drew up the specs and that Branner adapted the software he had already written for Dixon’s gas station to the larger task of handling the whole state’s fleet and gave his Unix-based creation a new name.

“I wrote Fuel-Net myself,” Branner acknowledges. “I had done the design ahead of time.”

Rick Grimm, chief executive officer of the Herndon, Va.-based National Institute of Governmental Purchasing, a nonprofit professional organization for government purchasing agents, says this contract scenario is troubling.

“What we would strongly discourage is having that supplier develop the bid spec and then allowing the supplier to bid on it,” Grimm says. “That’s not appropriate.”

Grimm not only knows the ins and outs of government purchasing, he knows something about fuel management. He wrote the bid specifications for Miami-Dade County’s automated fuel management system in the early 1980s. That local government depended on off-the-shelf software and experienced vendors, he says, adding that no sensible state would hand off such an elaborate contract to a neophyte company.

“The last thing we would have said was, ‘If you’ve never been in the business, that’s OK,’” Grimm says. “You’re not buying number 2 pencils here. This is sophisticated business.”

Regardless, in December 1989, Maryland awarded Commercial Fuel the contract—even though it was the higher of the two bids it received.

Ray Henry is the president of Space Petroleum, the then-Baltimore fuel broker (now located in Ellicott City) that bid against Commercial Fuel Systems for that state contract. Even 15 years later, he recalls instantly that his bid was nearly 2 cents per gallon lower than Commercial Fuel’s winning bid. The bidding was a “learning experience,” he says—one that taught him not to bother bidding for government contracts: “I’d done government contracts before, and this contract was the last straw.”

Henry says he found it surprising that the Department of General Services decided to give only 45 percent “weight” to the bid price, and 55 percent to the technical aspects, on which judging is more subjective. With what he regarded as a solid technical proposal, Henry thought he had a pretty good shot, he says. But Commercial Fuel Systems’ higher bid crushed his.

Henry stresses that he doesn’t know what happened, but he has often wondered. “The facts are, we were the low bidder,” he says. “We got beaten out on the technical aspect.” While Henry notes that he “wasn’t impressed” with the way the bidding was handled, he does recall that “the guy that handled the bid”—Robel—“was extremely professional.”

For his part, Robel says he has a hard time recalling how he decided to score the bids, or who he named to the panel of judges. “You’re really taking me back now,” he begins. “We had a couple people from the state police and, um . . . I don’t remember if we had one from budget and fiscal planning. I think we did—making the award and going over the proposals. It wasn’t me, [but] I was there.”

 

Commercial Fuel, with its one sleepy private gas station on Route 40 in tiny Mount Airy, now had a five-year state contract to modernize and supply at least 29 state gas stations. According to its contract, Commercial Fuel had to front the money for all the new electronic equipment, allowing the state to pay it back over the life of the contract. That meant Lew Dixon had to raise some cash.

“He had his whole family sign the mortgage he had to take out to put together this system,” Robel says. “He needed some capital, and the way he got the capital was he had two sons—I think they put their houses up.

“I went up and had a little talk with him. See if they really wanted to do this,” he continues. “I knew they could pull it off, but they could lose their shirt.”

Mark Dixon says he won’t discuss that aspect of his business, for privacy’s sake. (His brother, Guerney, died in 1998.) But the available records indicate that the first several years of the contract were not easy for Commercial Fuel.

The original December 1989 contract broke down this way, according to records from the State Board of Public Works: Commercial Fuel bought the gas for all 23 Maryland State Police barracks, three State Highway Administration garages, the Baltimore and Annapolis state office complexes, and Eastern Correctional Institution. Commercial Fuel was repaid its cost for fuel, plus 8.315 cents per gallon, which included both its “administrative fee” and about 2 cents per gallon in transportation costs. Commercial Fuel was paid an additional 6.188 cents per gallon for “amortization of newly installed equipment and building of a refueling center at the Baltimore Office Complex to be paid over the life of the contract.”

The contract was set to run five years, until Dec. 7, 1994, but it was revised to run until July 31, 1997. That’s because the five-year contract term did not start until a certain minimum number of fueling sites came on line, Branner says, and that minimum number was not reached until the summer of 1992.

“Lew Dixon did the state a huge favor—he bought that stuff himself,” Branner contends. “Don’t tell me how the poor state got screwed by the gas price.”

From the beginning, Department of General Services officials told the state comptroller and governor that the new system was saving the state money. “I think the savings have been very conservatively estimated, 175 [thousand dollars] a year,” a Mr. Benton told the state Board of Public Works when the contract first passed in 1989. “After the equipment has been amortized, the savings will be about $250,000 a year. I believe the actual savings will be much greater than this.”

But that savings figure is based on the assumption that, but for the Commercial Fuel contract, most Maryland state employees would still be buying gas at retail service stations, paying both the federal tax and the vendor markup. The savings figure also seems to imagine that without Commercial Fuel’s card-lock system, state police would still be gassing up from unaccountable pumps at their barracks, stealing as much gas as their consciences allowed.

The cost savings figures were never questioned, but Commercial Fuel renegotiated the contract with the state several times in the first few years, including adding additional refueling sites to the system and adding provisions to get paid more for transportation. “Adjustments to the administration fee will be made by comparing actual transportation costs per gallon to $0.0197, which is the transportation portion of the contract administration fee of $0.08315 per gallon,” according to a description of a contract modification approved by the Board of Public Works on June 28, 1995.

The modification added $105,414 to Commercial Fuel’s income, and extended the contract to July 1997, when the contract was renewed for five years without rebidding.

That 1997 contract renewal also contained perhaps the most unusual—and richest—modification yet to Commercial Fuel’s deal with the state. For the next five years, until 2002, Maryland agreed to increase Commercial Fuel’s “administrative fee” from 9.245 cents to 12.245 cents per gallon. The system was becoming larger and moving more fuel, which usually leads to stable or even lower prices as vendors become more efficient. But in Maryland, the opposite happened.

“The increased administrative fee is necessary because the volume of fuel dispensed at the new sites coming on line is expected to increase by 13 percent,” according to the remarks included with the item on the Board of Public Works agenda. And despite the fact that “all equipment and facilities” Commercial Fuel bought and set up for the system were “fully paid and now . . . the property of the state,” the remarks go on, the part of the per-gallon fee designated to pay for the equipment—6.188 cents per gallon—”will be redistributed to pay for the increased administrative fee and program operating expenses.”

And with that the state, which had already bought and paid for $1.98 million worth of electronic equipment to operate its automated fuel management system, decided to keep on paying for those same items for the next five years. The 3-cent increase in the administrative fee cost the state at least $1.2 million through 2002.

The five-year contract extension was estimated by the Department of General Services to be worth nearly $46 million, including the cost of 8 million gallons of fuel each year. “The actual savings to the state exceed $1.5 million” since the contract’s inception, the remarks claimed. “Once all 90 sites are on line, the estimated five year overall savings to the state will be $1.7 million based on current price differentials.”

Then-Comptroller Louis Goldstein took credit for the savings at the Board of Public Works meeting.

“Great,” then-Gov. Parris Glendening said. “Mr. Comptroller, I’m going to again just tell you how much we appreciate your leadership on those items.”

Branner, the software expert, says questioning the 1997 increase is foolish. “That’s like telling me you bought a car in 1991, and you’ll just drive it forever and never put parts in it,” he says. “Bullshit.”

But Mark Dixon credits his own frugality with saving the state millions in replacement parts. “We’ve talked the state out of spending money,” Dixon says, citing as an example the Gasboy site controllers his company installed beginning in 1990. Candace Seward, the Department of General Services administrator overseeing the contract, suggested replacing the controllers in 2000 because, Dixon recalls, “they’re 10 years old. But I said, ‘How many have broken?’” Dixon says replacing all of those controllers would cost “maybe $1 million”; he’d rather the state “take that money and let it earn interest” while his technicians tinker with the occasional dodgy controller.

Purchasing expert Grimm still thinks the state’s deal is questionable. “I just don’t understand why, if they own the infrastructure, why they’re paying 12 cents a gallon,” he says.

 

In 2002, the contract finally came up for rebidding. Commercial Fuel Systems won it, again bidding 12.635 cents per gallon as its “administrative fee.” But this time that did not include freight, which amounted to an extra charge of 2.29 cents per gallon for gas and 3.31 cents per gallon of diesel. The total equaled 14.925 cents per gallon of gas, and Commercial Fuel won the contract easily. It was the only bidder.

Comptroller William Donald Schaefer, who as governor approved the original contract in 1989, questioned the new contract at the Board of Public Works meeting when it was passed.

“All right, you only had one bid?” he began. “This isn’t one of these [deals] that you like this Commercial Fuel System[s], so we’re going to give it to them for another 12 years?”

Peta Richkus, then secretary of the Department of General Services, told Schaefer that the department had contacted other bidders but received no other bids. Treasurer Nancy K. Kopp noted the size and complexity of the contract and wondered if it couldn’t have been broken up into smaller pieces.

“That was considered, Treasurer Kopp,” Richkus said. “The ability to do that would be very costly, and it was determined that it was in the state’s best interest to maintain the services as proposed.”

Schaefer was unimpressed. “When you have these big contracts, only one bidder. I don’t—there’s something wrong with the system.”

Nonetheless, the contract—for five years with a renewal clause for an additional five—passed.

Richkus, who left state service soon after, did not return several phone messages seeking comment. City Paper has filed a Public Information Act request with the Department of General Services seeking records for the fuel contract, which the department says it will answer soon. But a careful reading of the 2002 bid specifications, supplied by General Services spokesman Dave Humphrey, makes it clear why no other company bid.

Page 4 of the specification reads, in part, “The contractor shall have at least five years continuous experience in the operation of . . . Fuel-Net™ software that operates the data base.” It is a provision that no corporation in the world could fulfill, except Commercial Fuel Systems.

Fuel-Net was written by Bill Branner in 1989-’90, then tweaked for the state of Maryland over the next seven years, as Branner’s company administered the software from its Broadway, Va., headquarters on behalf of Commercial Fuel. Branner had moved from Mount Airy back to his hometown soon after getting the state contract, a shift that ruffled feathers at Commercial Fuel; Branner was cut out of the contract when it was renewed in 1997. “I was told that it was the governor’s idea,” he says. “I wrote numerous letters to Lou Goldstein—he never got tired of ignoring them.”

Branner was free to license the software to other jurisdictions or private businesses, but he says that by 1997 it had been so customized for Maryland—and so overtaken by Windows-style software marketed by larger fuel management firms—that no one showed any interest. Maryland was the only place Fuel-Net was used.

So, how could any other fuel management company bid for the Maryland contract if Fuel-Net was part of the specifications for the contract? “Hah! Really? It’d be impossible,” Branner says. “I didn’t know that was the way [the 2002 bid specification] was written. I knew they screwed me out of it, but I didn’t know that’s how it was written.”

Branner—the only person in the world outside of Commercial Fuel headquarters in Mount Airy who is intimately familiar with the software—did not receive an invitation to bid on the 2002 contract, he says. Ray Henry of Space Petroleum, who prepared the only other fuel services bid the state has ever received, says he did not receive an invitation to bid either.

Dixon at first says he didn’t know the bid specification contained the Fuel-Net provision. Told that Branner never sold the license to anyone other than Maryland, Dixon says, “I didn’t know until you told me that nobody else bought it or could use it.”

Thinking it through, Dixon wonders aloud: “If they don’t specify [Fuel-Net], then what’s their option? What else could they do? Do they have to buy a new program?”

The Department of General Services has a web site devoted to its fuel management system, containing maps locating all of the gas stations and considerable hype about the system. “At the end of fiscal year 2004, the State of Maryland Automated Fuel Dispensing and Management System has been an unqualified success,” the text on the web site says. “The system has dispensed over 104.3 million gallons of fuel and has saved the taxpayers of Maryland over 4.79 million dollars to date.” The Department of General Services nominated the fuel management system for awards in 1999 and 2000 (it didn’t win), and spokesman Humphrey defends the contract, claiming savings of “180 salaries” because the automated system is unattended. (Robel says the old system was unattended as well.)

Commercial Fuel’s computer system, designed to track fuel inventory and prevent theft and inefficiency, works well in theory. But it appears that the fleet managers assigned to check the figures supplied by Commercial Fuel don’t bother.

For two years running, 2003 and 2004, the state Department of Legislative Audits found fault with the State Police’s oversight of fuel use. The state police “did not review fuel usage reports that identified variances in vehicle fuel usage,” the June 2004 audit found. “Our review . . . disclosed a number of instances which appeared to warrant additional review. For example, one [state-owned Chevy Blazer] included on the report indicated the fuel consumption at an average rate of two miles per gallon.” Both years, the state police promised to improve.

The state does not know if the police are unique in their lackadaisical attitude toward fuel management. There are more than 350 other state agencies receiving the voluminous reports Commercial Fuel Systems generates. But legislative auditor Bruce Myers says he can’t recall another audit that focused on fuel use. “If it’s a small fleet in some of these agencies, we might not even look at that,” he says.

“They didn’t pay attention when I was running it either,” says Branner. “If there were flags raised it was usually because we raised them.”

Commercial Fuel Services’ current state contract is set to run through July 2007, with an option to extend until 2012. “The state can cancel the contract at any time,” Dixon contends, though there has been little sign that such a move was likely during the contract’s first 15 years.

Dixon, like most people, says he has felt the squeeze of higher fuel prices. “I just got hit with a 15 percent surcharge” on his fuel delivery costs, he says, sitting at the table in his office. He has applied for a raise from the state.

Humphrey says that a rate increase is currently under consideration.

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