Toll system delays in Washington state again put political heat on WsDOT, ETCC

September 4, 2011

A report in the Tacoma News Tribune this morning turns up the political heat on Washington state DOT (WsDOT) and its back office contractor Electronic Transactions Consultants Corp (ETCC) over delays in starting tolls. The report claims ETCC would be liable for $12m in liquidated damages if the department fully enforced the contract provisions against ETCC. It also quotes Washington state tolls director Craig Stone as saying that pursuing maximum damages would risk putting the vendor out of business.

Stone is quoted: "Our goal is to get a system up and running. We've got to make sure this vendor is viable and able to get in place the equipment and software needed, and to get up and running."

The News Tribune report quotes a local state politician Rep Larry Seaquist (Dem, Gig Harbor) as saying WsDOT officials as "quite nervous about the business viability of ETCC" and reports them as feeling "trapped."

The hypothetical $12m liability against a contract for $23m is apparently calculated from a contract deadline of Jan 18 for ETCC's takeover of back office tolls at the Tacoma Narrows Bridge and contractual penalties of $10k/day of delay plus $300k/week penalties at the 520 Bridge and a contracted startup there of March 19. Both are now due to start tolling in December.

ETCC is not allowed under the terms of the contract to make any comment without WsDOT permission, but it would almost certainly be unfair to blame the company for all of the delay as the Tacoma report suggests - and  such a claim would probably not be sustainable in the law courts if litigated.

A review panel of toll experts led by James Eden of Aecom found that the WsDOT contract schedule was "never realistic." It faulted WsDOT for failing to give full decisionmaking powers to the toll division director, instead giving the vendors multiple bosses.

"DOT has assembled an impressive team of consultants. Unfortunately, each is assigned to a (different) functional manager and their assignments tend to focus on the needs of that manager. Overall program management is suffering as a result."

It also said the department's requirements were very difficult to meet: "The requirements they have established go beyond anything in place today. Implementing this system far exceeds the difficulties experienced by most toll agencies that are migrating an existing system."

The challenge arises from:

- a completely new all-electronic system being implemented on a temporary basis at the existing 520 bridge (later to move when a new bridge opens),

- a cash plus open road toll system at the Tacoma bridge is being migrated to a new back office,

-  HOT lanes are being tolled and violations processed for the SR167, plus

-  a new 6C tag is being run alongside the TransCore 6B variant.

Features of the system were not firmly detailed by WsDOT, the Eden panel reported:

"The contract requirements were not fully understood at the beginning of the project by the vendors. WsDOT has not always been able to resolve disagreements among agency stakeholders in a timely manner, which is needed to direct vendors with a single voice."

Eden's panel did say that ETCC failed to provide critical staff for the project and failed to understand the department's GAAP accounting requirements. And it said ETCC needed a backup optical character recognition (OCR) engine.

It faulted other contractors, notably TransCore at the Tacoma Narrows Bridge for a failure to read the new 6C sticker tags, all of which default to video toll.

The panel wrote: "Transcore, the operator at the TNB (Tacoma bridge) needs to replace the readers, or at least modules of those readers, to units that read both the Transcore proprietary (eGo 6B variant) transponder and the 6c transponder ASAP (as soon as possible.)"

Telvent was faulted in its front end work at the 520 bridge for inadequate nighttime license plate reading capability with near-IR illumination and existing cameras. New cameras might be needed, it said.

Now December

On the 520 bridge tolling the panel said that no start date should be announced until further system development was done and all systems thoroughly tested - a recommendation already disregarded by WsDOT in announcing a December start.

Eden's panel said that WsDOT should stick with the existing contractors. It suggested WsDOT press ETCC for full access to system code, the right to modify staffing at the customer service center and the right to acquire additional and alternative data processing - rather than seeking heavy cash compensation from the company for delays.

In the summer WsDOT and ETCC amended the contract on start dates and new change orders are being negotiated currently, so claims of damages according to the original contract are no longer possible.

WsDOT's Craig Stone says that ETCC is being held accountable currently. He says the company has foregone several hundred thousand dollars payments to compensate for WsDOT toll losses, and also notes the delays  are causing it to lose operations fees to which it would be entitled with tolls being collected.

Other ETCC work

ETCC's big toll clients in Texas speak well of the company's home turf performance, but the company has had major difficulties with toll projects in Miami FL and Louisiana. However much to the surprise of many in the industry, the company this summer won a big contract with the PANYNJ - the country's second largest toller - for a new toll system. This against very strong competition from ACS and Telvent. (CORRECTION)

report from Tacoma News Tribune:

TOLLROADSnews 2011-09-04

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