Three Queens-based dairy distributors engaged in “possible collusion” in a $134 million school milk contract, according to city Comptroller Scott Stringer.
Stringer’s auditors questioned how Bartlett Dairy, which won the smallest chunk of the five-year contract, ended up with 70 percent of the routes under a subcontracting deal approved by the Department of Education.
Stringer slammed the agreement as a classic “bait-and-switch” scheme and chided school officials for “ignoring red flags” pointing to “possible collusion” among rival milkmen.
“It may well have resulted in inflated costs to the city,” he charged.
Bartlett was awarded routes worth about $5.3 million, compared to the $111 million awarded to Beyer Farms and $17.7 million that went to Elmhurst Dairy.
But in October 2008 — one month before the contract was scheduled to begin — the two top bidders hired Bartlett to handle their routes, Stringer said.
Beyer declared bankruptcy in December 2012, which Stringer said school officials should have anticipated based on its shaky finances.
He referred the findings to the US Justice Department because school milk is bought with federal funds.
Joseph Paykin, a lawyer for Bartlett, called Stringer’s allegations “false and defamatory” and noted that the dairy won the contract as a result of competitive bidding.
“Bartlett Dairy Inc. has done nothing wrong,” he said.
Elmhurst said it followed “all proper procols.”