RALEIGH -- The state Division of Motor Vehicles has settled a dispute with Verizon Business over hundreds of unused emissions inspection computers that were bought but never delivered.
Under an agreement signed Thursday, Verizon will credit $1.7 million to outstanding invoices with DMV. All told, Verizon's current contract with DMV is worth $51.5 million through 2012.
Meanwhile, a State Bureau of Investigation probe is still under way into hundreds of meals and gifts Verizon said it provided to DMV employees who oversaw the lucrative no-bid contract.
Asked when the criminal investigation might be complete, DMV spokeswoman Margaret Howell said the SBI has not shared that information with her agency.
The issue settled Thursday involves the state's e-Sticker inspection program, which began in November 2008. The program required new computers and other electronic equipment at all state inspection stations, which then numbered about 2,800. DMV's inspections service contract dates to a 1997 "sole-source" contract granted to MCI WorldCom, which Verizon bought in 2006.
In 2008, then-DMV Commissioner William C. Gore Jr. signed an extension of the original-no bid contract without seeking proposals from competing firms. The amendment paid Verizon a $5.3 million down payment for the 3,000 inspection computers, as well as a $1.70 transaction fee from each inspection. In the first 10 months the program was in operation, Verizon earned $6.1 million in transaction fees.
Soon after the new inspection system was announced in 2008, about 1,000 service stations decided to quit performing inspections rather than convert. That left the state needing only 1,800 computers of the 3,000 it contracted Verizon to provide. Hundreds of the computers, which had been paid for, apparently were never delivered to the state.
In September, DMV Commissioner Mike Robertson said the agency could not account for all 3,000 computers. Verizon said it had 700 computers intended for North Carolina sitting in a company warehouse in Arizona.
Jack Hoey, vice president of media relations for Verizon Business, said in an e-mail message Thursday that the company was under no contractual obligation to give the state the $1.7 million credit, but that the telecommunications giant wanted to keep an important customer happy.
DMV had been withholding about $2 million in emissions transaction fee payments to Verizon, pending the outcome of talks about the unneeded computers. Those payments will now resume, under the agreement signed Thursday.
"We did, and still do, feel that we fulfilled our obligations under the contract," Hoey said. "Being required to do something for a customer and being willing to do it are two different things."
