The same company has run the taxi concession at Honolulu Airport for more than a decade without going through a competitive bidding process, eliminating competition and possibly cutting into state revenue, according to the state auditor and others.

The state Department of Transportation’s Airports Division has spent decades struggling to find the right framework for its taxi concession. SIDA Taxi of Hawaii had an exclusive contract to provide service at the airport, but the not-for-profit group of about 400 independent drivers went bankrupt in 2003. Howard Higa, president of Signature Cab Holdings Inc., which does business as TheCab, said SIDA owed the state about $800,000 at the time. Higa’s company later absorbed SIDA, and the state asked the company to run the taxi concession on an emergency basis. This time the state wanted an open-access system, which meant that one company would manage dispatch services, but qualified drivers from any company could pick up passengers.

In 2003 the state put the concession up for bid, but Higa said the request for proposals was withdrawn and replaced by another that excluded vendors affiliated with taxicab or ground transportation companies. AMPCO Express, the longtime airport parking operator, was awarded a yearlong permit in 2004. When the permit expired, the state allowed AMPCO to operate without a permit at the same rate until 2012.

Steve Choo, regional manager for AMPCO in Hawaii, did not return a call to the Honolulu Star-Advertiser.

“I don’t get it. You can be a parking company and run parking, but you can’t be a taxi company and run taxi services,” Higa said.

In 2012 the department executed a five-year contract with AMPCO, setting new terms and addressing consumer complaints by instituting guidelines requiring drivers to take credit cards and abide by a professional dress code.

In 2003 Higa paid the state $444,000 to run the airport taxi concession. The contract terms were significantly different under AMPCO’s 2004 permit, which remained in effect until 2012. From 2005 to 2010 AMPCO paid an average of $208,333 a year to run the concession. Last year, under the new contract, AMPCO paid the state $436,551.

Proponents of open government say the contract should go out to bid when it expires in 2017, especially since airport pickups are the next frontier for ride-hailing companies like Uber, which just received clearance to pick up passengers in Los Angeles and is on its way to achieving the same status in Las Vegas.

“In the broader context of evaluating public ground transportation, we need to see what contracts we have and why we use them,” said state Sen. Will Espero, who sits on the Senate consumer protection committee. “Obviously, some of what is alleged to have happened in the past raises red flags. DOT and government agencies need to be held accountable, and hopefully, if there are problems the right people are being informed. There’s a lot of money to be made at the airport, and whenever there are lots of revenue sources, there need to be lots of checks and balances.”

In 2010 Higa decided to revisit contract concerns under Gov. Neil Abercrombie’s administration. He asked then-state Attorney General Mark Bennett to investigate whether the Airports Division was violating state procurement law by failing to open the concession to bidders.

Bennett ruled that the state could continue to award the contract through direct negotiations since state law exempted ground transportation from having to go through a bidding process. The exemption law, which was passed in 1962, was updated in 2001 to also eliminate parking contracts from the competitive process.

Espero said the contracts should be made part of the broader ongoing legislative discussion about regulations for taxis and ride-hailing.

Airport taxi service became the subject of a 2010 state Senate hearing, and a probe by former Lt. Gov. Brian Schatz, who was concerned that service needed to be improved for the 2011 Asia-Pacific Economic Cooperation conference. Contract concerns were brought forward again in 2013 following the release of a routine audit by acting state Auditor Jan Yamane, who found the Airports Division “unwilling or unable to properly administer and manage contracts it oversees directly.”

Yamane’s audit criticized the division for not being able to produce key taxi concession documents or adequately address why it had allowed AMPCO to run on an expired permit. She faulted the division’s reliance on direct negotiations, a process that she said eliminated competition and made it difficult to determine whether the state could have obtained greater revenues through a competitive process.

Yamane also criticized the division for “persistent over-reliance” and “accommodation” of contractors, which she said resulted in multiple cost overruns, time delays and procurement violations. Further, Yamane found that airport employees with procurement authority seldom attended procurement training, which she said may have contributed to procurement violations identified during audit examinations.

“Airports Division has made a series of questionable procurement decisions that appear to demonstrate a willingness to put contractor needs before the public interest,” Yamane said in her audit. “Those entrusted with procurement and expenditure of public moneys must be reminded of their responsibilities to promote integrity and serve the best interests of the public.”