Aggrieved bidders not appealing protest rejection - PANYNJ free to sign with ETC for new toll system

June 16, 2011

ACS and Telvent, low bidders against Electronic Transaction Consultants Corp (ETC) for a major toll system replacement at the bridges and tunnels of the Port Authority New York & New Jersey (PANYNJ) have both decided not to appeal the rejection of their protests against the selection.  They are saying the whole procurement is so riddled with irregularities and unexplained behavior at the Port Authority, they don't see any point in appealing further.

Monday evening PANYNJ's procurement people emailed a letter to the low bidders flatly rejecting their protests, saying ETC offered best value. The protests were based on information about the ETC bid provided by the tolls director Cedrick Fulton to commissioners at a formal meeting May 25.

They argued the content of the proposals was similar and there was no value to PANYNJ in paying substantially above the low bids for ETC. The low bids were made by companies established in the New York/New Jersey area. Telvent does toll systems work for MTA Bridges and Tunnels of New York City, and ACS installed and maintained the existing PANYNJ system, and is heavily involved in operation of the back office of E-ZPass.

Fulton told the commissioners who constitute the Construction Committee: "Commissioners, it is my recommendation that we award the 2 contracts to Electronic Transaction Consultants Corporation at a total cost of $81.9 million. The first is the Design/Build Contract to design and implement a replacement toll collection and audit system; the second to the maintenance contract to maintain that system once installed to protect an important Port Authority revenue source."

He showed a slide which broke the recommended overall ETC contract of $81.9m into a Design/Build Contract of $62.9m and a Maintenance Contract of $19m. (see slide from commissioners presentation)

Maintenance is for two years with three options to renew, each for 2-years.

ACS and Telvent both bid around $40m for the design-build and a similar or slightly lower price than ETC for maintenance, it seems agreed, though the exact figures have not been revealed.

PANYNJ officials now say ETC numbers were too high

The protests were based on PANYNJ proposing to pay $20m to $30m more for ETC, but the latest news is that PANYNJ officials say the $62.9m/$19.0m = $81.9m numbers presented to commissioners were a mistake.

They are not as high, and the difference between ETC and the low bids was exaggerated, they now claim.

This seems to introduce a new flaw in the procurement. The Commissioners were not given correct $-numbers for the bid they were asked to approve and on which they voted.

And the protests were based on the same faulty information about the ETC bid.

It remains true, PANYNJ officials admit, that ETC was higher than the rival bids.

There is also no explanation forthcoming as to why the official Minutes of the board meeting say there was only a report "for information" on the matter, and omit entirely all mention of the recommendation of the contractor, and the vote to award the contract.

Some ask if there has been a legal vote to award the contract to ETC if it is not contained in the Minutes. We interpreted the Minutes omission as PANYNJ backing away from the choice of ETC because the Minutes came out over a week later, but that proved wrong.

Industry veterans say they cannot recall a procurement with so many unexplained aspects or irregularities as the current PANYNJ toll system replacement.

PANYNJ officials have promised that once a contract is signed they will reveal all the details of the competing proposals, and the scoring of each.

Committee on Construction of the board May 25:

earlier reports here

NOTE: we believe TransCore also protested, but don't have that as firmly established as we'd like.

TOLLROADSnews 2011-06-16

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