Missouri’s license office system faces growing scrutiny

A recently filed lawsuit highlights ongoing concerns with the state of Missouri’s license office system, with independent contractors questioning its fairness and operational stability.

A May 7 lawsuit filed in Cole County Circuit Court by license office operators 2015 Schotthill Woods LLC, Koester and Koester LLC, David Koester Jr. and David Koester Sr. names the Missouri Department of Revenue, the Office of Administration and its Division of Purchasing and Materials Management as defendants. The Office of Administration is responsible for managing the state’s procurement process through the division, and the Department of Revenue oversees the state’s more than 170 license offices.

In the lawsuit, the plaintiffs allege an “unfair, unlawful, unreasonable, arbitrary and capricious” procurement process related to license offices. The litigation points to an April 28 request for proposals for a dozen license offices statewide, including the Springfield office at 319 E. Battlefield Road, Ste. P, and the location in Republic. The plaintiffs had sought to make bids for one or more of the offices in the RFP process, according to the lawsuit.

The lawsuit states that Schotthill in March received a notice of violation from the Department of Revenue for its license office in O’Fallon. In the notice, state officials claimed customers were turned away from the office on two specific dates in December 2024 and February 2025 because office hours were nearing their end, but the contractor’s records show that multiple transactions were conducted in the final hour of operation on those days, and even beyond closing time, according to the lawsuit.

Although the violation did not result in a suspension, the lawsuit states that new scoring rules introduced in the April RFPs deduct up to 35 points from a contractor’s bid based on a single violation. Plaintiffs argue that the penalty is severe enough to make a proposal noncompetitive and say applying the policy based on an infraction that occurred before the new RFP was issued constitutes retroactive enforcement.

“Bids for license offices are often decided by 10 or fewer points,” the lawsuit reads. “An automatic 35-point deduction essentially disqualifies Schotthill and/or K&K from competing for license offices going forward.”

The suit also challenges a new five-year “common ownership” rule that restricts which individuals can be named across multiple license office proposals. The plaintiffs say the rule unfairly disqualified them from bidding, despite having restructured ownership in advance of the bidding period. They argue that the changes amount to retroactive rulemaking and were not properly established through Missouri’s formal administrative rulemaking process.

The plaintiffs are asking the court to block the state from awarding contracts based on the current RFP and to declare the new policies unenforceable. A bench trial has been scheduled for July 25, online court records show. A preliminary injunction was previously denied, allowing the state to continue awarding contracts in the meantime.

JoDonn Chaney, director of strategy and communications for the Department of Revenue, said he’s limited in what he can say about the lawsuit, citing policy with ongoing litigation.

“We have been given the jurisdiction to proceed with the process,” he said, noting timelines associated with the latest RFP process could potentially be altered depending on the outcome of the court case. “Obviously, we’re going to follow the law, and so we’re awaiting the final result of that court case.”

The lawsuit and latest RFP process come amid the state’s transition to a new online procurement platform, part of a modernization effort scheduled for full rollout in 2025.

Contractor speaks out
Missouri’s license office system has operated through the use of private contractors for decades, but Gov. Jay Nixon’s administration in 2009 ended a patronage system under which gubernatorial allies typically were awarded them, according to the Department of Revenue’s website and media reports at the time. In its place, a bid system was installed.

It was around that time that longtime license office manager Terri Harris, who had been running offices for private contractors under the patronage system, decided to go into business for herself. Through her St. Louis-area company Elle Management LLC, Harris operated myriad license offices for years, ending with the company’s decision in 2025 not to renew its license for the south Springfield office on Battlefield Road.

“It was actually my last office. I had made the decision that I was going to retire,” Harris said. “A large reason behind that was because of the things that had happened and stuff that I had been put through during my time operating.”

Harris described a license office system that started out well through the 2009 changes but has consistently deteriorated.

She cited continuity issues related to the bidding process and operation of license offices – including bid manipulation that undermined business plans, midstream rule changes that restricted staffing flexibility and a lack of transparency that forced her to compete against her own disclosed proposals.

“They began changing what they required of us, and in doing so they made it impossible for me to operate my offices the way I had always operated them,” Harris said. “There was clearly an attempt to control who was getting offices and how many offices they were getting.”

She also described a breakdown of trust between the state and contractors over time. Once collegial and cooperative, Harris said, the environment had become adversarial, with operators treated more like suspects than partners.

“Instead of offering you support, they would come into the office and see you struggling,” she said. “They would sit there and watch you drown – and write you up for it.”

On the horizon
Harris said she’s optimistic about the future of the state’s license office system following Gov. Mike Kehoe’s appointment of Trish Vincent as director of the Department of Revenue.

Vincent is a Missouri government veteran, having previously served as director of revenue and chief of staff under Gov. Matt Blunt and as executive deputy secretary of state and chief of staff to Secretary of State Jay Ashcroft, according to a January news release in which Kehoe announced Vincent’s appointment.

“I look forward to working with the Kehoe administration and the team at DOR to improve the customer experience and function with speed and efficiency,” Vincent said in the release.

Harris recalled managing license offices when Vincent was in the revenue director position in the Blunt administration.

“She was the only director in 34 years who had direct interaction with the contractors and the managers in the field with regularity,” Harris said. “It was pretty impressive. It was the most effective oversight that I had experienced. Everyone benefited from it. I don’t think that she will tolerate the things that have happened.”

Harris suggested splitting up license office functions and bidding amid multiple areas of state government.

“You cannot have one lord and master,” she said. “We have three branches of government for a reason, and when you’re talking about contracts as profitable as some of the contracts that we’re talking about – the contracts that I had been awarded were among them – there should not be one entity writing the RFPs, evaluating and awarding them, and then overseeing them. That’s too much power in the hands of a few people.”

DOR spokesperson Chaney said the license office system and bidding process is “guided by the state statute.”

“We are always open to listen to any process, how we can make the system more efficient, more accountable,” he said. “Sometimes, it’s easy to say change needs to be made, but sometimes it’s difficult to come up with the system that’s going to fix the problem – if there is one.”

License office bids
Springfield currently has two of its three license offices in operation.

The DOR’s website lists the contractors for the two currently operating license offices as License Office Services LLC for the 149 Park Central Square location and CGB Holdings LLC for the 525A S. Glenstone Ave. location.

The Battlefield Road office closed May 16 amid Elle Management’s exit and a new bidding process, and BCFO Titleworks Inc. has been awarded the contract, said Chaney. He said a 10-day protest period for the contract started June 23, after which the operator would have 45 days to get the office back up and running. Joe Daues, CEO of Breast Cancer Foundation of the Ozarks, confirmed the organization has been awarded the contract, but he said authorization from the protest period had not yet been received by press time.

Bidding information maintained by the Department of Revenue shows that BCFO Titleworks, CGB Holdings and License Office Services responded to the RFP for the Springfield contract.

The Republic license office – also referenced in the Koester lawsuit – is operated at 243 U.S. Highway 60 West by Breast Cancer Foundation of the Ozarks, according to the DOR’s website.

Online bidding information shows BCFO responded to the Republic office RFP earlier this year along with CGB Holdings, Koester & Koester and Paul J. Wrabec Co. Inc.