Lesson

Consider key elements of procurement and contracting when outsourcing telecommunications support services.

Experiences from the Departments of Transportation (DOTS) of multiple states in selecting telecommunications options.


2000
Long Island,New York,United States; Long Island,Milwaukee,Wisconsin,United States


Background (Show)

Lesson Learned

In many cases, agencies do not have the personnel with the skills necessary to operate and maintain an ITS telecommunications network. The telecommunications industry is large and complex, with a set of technical disciplines that DOTs may not be familiar with. If agencies do not have the appropriate staff for operating and maintaining a telecommunications network, they should procure appropriate support services.

The following set of lessons learned highlight key elements in the procuring and contracting of telecommunications support services.
  • Design a Request For Proposal (RFP) that is both complete and specific. The RFP should specify all of the services desired, under what conditions they must be performed, and the resources that are required. The RFP should consider operations and maintenance, as well as any additional services that may be needed for network modifications or expansions.
  • Specify a structure for the bidder's pricing or rates. The RFP should include an allowance for unsuspected conditions that may emerge from network modification or expansion. The maintenance contractor for the INFORM ITS system on Long Island was allowed a specified number of weeks to identify such circumstances that could be considered exceptions to its financial responsibility for repair.
  • Determine the criteria for selection. The agency needs to carefully consider on what bases the selection decision will be made. A reliance on price alone as the determinant may not be adequate, given the technical complexity often involved with telecommunications solutions. Rather, agencies should consider a range of factors, such as qualifications, experience, key personnel, and price.
  • Consider the impact of the length of the contract. The length of the contract is a significant determinant of price and level of satisfaction. Contractors tend to offer more aggressive pricing for longer contracts. A commonly used contract structure is to have a "base" period with multiple options years. In addition, it is important that agencies are able to terminate the contract at key points for poor service.
  • Recognize that the type of contract affects the level of risk sharing. With a fixed price contract, the financial risk rests primarily with the contractor, but this type of contract is only recommended if the network is in good shape, as contractors will levy a significant risk penalty in their prices. Agencies obtain maximum flexibility from a cost-plus type of contract, where it is possible to specify the types and levels of service on a reasonably real-time basis.
  • Develop a contract that can be easily amended. Over the course of a contract, a network is likely to grow, or modifications may be necessary. To the extent that the amendment process can be simplified, this will make it easier for agencies to procure the services they need to meet changing requirements.
  • Consider the location of the contractor's staff. The location of the contractor staff has an influence on the delivery of services. Milwaukee's MONITOR system contracted for full-time service positions on-site, so that the contractor’s personnel could respond to short-term MONITOR needs.
For many ITS telecommunications solutions, the procurement and contracting of support services are necessary, as agencies do not always have the staff with the required expertise. Agencies must give careful consideration to a number of key elements in the procurement and contracting of services, as their decisions will have an impact on the overall cost of a project, as well as on the quality of the services acquired. Through thoughtful attention to the procurement package and contract, agencies are more likely to obtain a telecommunications solution that meets their needs.


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Source

Communications for Intelligent Transportation Systems - Successful Practices: A Cross-Cutting Study

Author: Vince Pearce

Published By: U.S. Department of Transportation, Federal Transit Administration and Federal Highway Administration

Source Date: 2000

EDL Number: 11488

Other Reference Number: FHWA-JPO-99-023/FTA-TRI-11-99-02

URL: http://ntl.bts.gov/lib/jpodocs/repts_te/11488.pdf

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Lesson Contacts

Lesson Contact(s):

James Pol
FHWA
202-366-4374
James.Pol@fhwa.dot.gov


Agency Contact(s):

Richard Dye
Chesapeake Highway Advisories Routing Traffic
410-582-5619
rdye@sha.state.md.us

Lesson Analyst:

Margaret Petrella
RITA/Volpe National Transportation Systems Center
617-494-3582
petrella@volpe.dot.gov


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United States

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Goal Areas

Efficiency

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Lesson ID: 2007-00363