Virginia investigating VDOT outsourcing contract


ROAD TROUBLE: A state Inspector General is looking into complaints about a Department of Transportation outsourcing contract with Serco Inc.

By Kenric Ward | Virginia Bureau

RICHMOND, Va. — A state investigation has opened into complaints about a $355 million outsourcing contract at the Virginia Department of Transportation.

Jeffrey Gargiulo, audit manager at the Office of State Inspector General, confirmed a report is due next month.

But Gargiulo, citing exemptions to open-records laws, declined to provide a copy of the complaints received through the State Employee Fraud, Waste and Abuse Hotline.

Watchdog learned this week that VDOT’s contract with Serco Inc. has come under fire from agency workers, who allege tax dollars are being squandered.

The Serco contract, which handed over various VDOT functions to the Reston, Va.-based firm, was advertised last year as “net-neutral,” meaning the state would pay neither more nor less than it had previously.

Though details of the Virginia investigation remain under wraps, Serco has encountered criticism elsewhere.

The global company, which reported $8.6 billion in revenue last year, contracts with government agencies to perform jobs ranging from missile defense to health care.

In 2012, independent researchers concluded Serco’s operation of British pathology labs led to a decline in the quality of services, including medical errors, according to news reports.

Closer to home, the Georgia Department of Transportation canceled its $21 million contract with Serco after discovering a GDOT employee who helped approve the pact had secretly done side work for the company.

Virginia Press Association executive director Ginger Stanley said the Inspector General’s decision to withhold the VDOT complaints is discretionary.

“The exclusion (in current law) does not prohibit the release of information, but allows for the custodian of the records to decide to release or not,” Stanley said.

The Virginia Freedom of Information Advisory Council is in the midst of a 2½-year study of all policies relating to state records.

Neither Serco nor VDOT responded to Watchdog’s inquiries.

Kenric Ward is chief of’s Virginia Bureau. Contact him at or at (571) 319-9824. @Kenricward