The city has decided to stick with a single vendor to handle police-initiated vehicle tows on Oahu.

Despite problems that plagued the city’s initial attempt with the one-vendor system, it has issued specifications for a new contract that the city hopes to award later this year.

Leeward Auto Wreckers was awarded the initial contract about 10 months ago but from the beginning encountered problems, including overcharging customers the first few months. The city and the company recently agreed to terminate the contract once a new one is signed.

Some of Leeward Auto’s problems persisted in part because the city was lax in oversight.

Sheri Kajiwara, director of the Department of Customer Services, said the single-vendor system is a good one and Leeward Auto’s problems largely reflected troubles with its management of the contract, not with the system itself.

She also said the city will have increased oversight compared to when the original contract took effect last November. That stepped-up oversight, already implemented in various forms with the existing contract, will allow officials to more quickly spot potential concerns, city officials said.

"We really believe the process is working well," Kajiwara said.

With the contract change in November, the city switched from a system in which it dealt with multiple vendors to cover all police-ordered accident, parking enforcement and stolen-vehicle tows around the island.

Up until then, Oahu was divided into zones, and the city awarded exclusive contracts for each of the zones. That meant the city dealt with multiple vendors, a process city officials believe is less efficient and results in differing levels of customer service.

Although the city has maintained the basic framework of a single-vendor system for the new contract, it has made some key changes.

One of the main ones involves the premium the vendor must pay the city for exclusive rights to the entire island.

Under the existing contract, the city requires Leeward Auto to pay $60,000 monthly — an amount that industry officials said from the get-go was too high to allow for a reasonable profit.

Under the new contract, the city will allow the bidder to propose a monthly premium, and that amount will be among the multiple factors the city considers in selecting a contractor.

The city also will allow the vendor to charge up to the maximum towing rates allowed by law. But the proposed rates also will be among the factors considered.

Leeward Auto won the existing contract in part by saying it would charge less than the maximum rates for certain things. From the get-go, though, the company encountered financial problems and ended up losing several storage lots it had listed in its original bid.

Kajiwara said the city is hoping towing charges to the public remain at current levels.

Industry officials say the single-vendor system can work well under the right circumstances.

"It’s certainly doable," said Barney Robinson, who runs a towing service and is part of a team considering bidding for the new contract.

Bids to the city are due by Sept. 11.

Barring any protests or other unforseen issues, the city hopes to award a new contract by the end of October.

The contract would be for three years, with options to extend for two additional years.

City officials acknowledge that the new specifications give the bidders more leeway in structuring their offers.

But in the end, the city says, vendors will be evaluated by one overriding factor.

"They have to be able to meet the public need," Kajiwara said. "That’s the bottom line."