Lesson

Investigate procurement alternatives of leasing, buying, or building equipment to minimize operations and maintenance costs.

Montana Department of Transportation's experience in procuring hardware and software for the statewide 511 traveler information system.


12/30/2003
Montana,United States


Background (Show)

Lesson Learned

When procuring ITS technology, agencies should compare different procurement options to determine if one method could result in an overall cost benefit in terms of both immediate and future costs. For example, many agencies are not staffed to design and build a 511 system. A substantial initial investment would be needed to hire skilled staff, pay labor costs, buy hardware and software, and manage the risks and challenges associated with design, development, and implementation. In addition, after the system is built and deployed, the agency must also assume the recurring operating and maintenance (O&M) costs for operating the 511 service and maintaining/upgrading the hardware and software.

The MDT experience provides some valuable guidance with regard to procurement of 511 system equipment and services:
  • Consider leasing as a procurement option for 511 telephony equipment. Although buying a commercial off the shelf (COTS) system may reduce the risk and cost of procurement, recurring O&M costs may still be substantial if an agency must rely on vendors. Depending on the organizational structure of the agency, leasing can be a desirable choice to avoid the initial costs of building a system and reduce the recurring O&M costs.
    In Montana, MDT wanted to deploy a 511 telephone service and initially considered buying the telecommunications equipment. However, changes in Montana State law delayed the procurement while MDT obtained clarification of the impact on their plans. The new law required that all acquisitions of computer and telecommunications equipment be handled by the Department of Administration. In retrospect, the changes to the equipment acquisition process delayed the procurement of GYRTWIS telephony equipment, but also resulted in a GYRTWIS 511 telephone system that was better for MDT. The decision to lease, rather than buy, the telephony equipment relieved MDT from the cost of buying and maintaining the equipment. In addition, depending on need, MDT can more easily expand the number of telephone lines.
  • Identify and utilize experts to help solve complicated issues. When confronted with the task of negotiating agreements between MDT and the region's telephone companies, MDT enlisted the help of a telecommunications expert within the State of Montana Department of Administration to work with the telephone companies and negotiate an agreement for the 511 service. The person was experienced in dealing with telephone issues for the State and coordinated a meeting with all the phone companies to negotiate an agreement with no-per-call charges and minimal switching costs.
  • Consider leasing, rather than buying, not only equipment but also services, to reduce operations and maintenance costs. MDT decided to lease both the equipment and the traveler information service for the GYRTWIS 511 telephone service. The traveler information service component of GYRTWIS provides the traveler with weather forecasts and road condition data.
  • Test the new 511 system and any upgrades on a system platform identical to the one being used in the field. System testing on an identical system platform will reduce the risk of technical problems when attempting to deploy in the field.

The MDT experience in deploying the GYRTWIS 511 telephone service provides several useful lessons related to procurement and deployment of a 511 telephone information system. Any agency wanting to deploy new technology should investigate opportunities that are available "in-house" and within other state agencies. In addition, an agency should investigate various procurement methods to achieve an outcome that will be most beneficial for the agency. This lesson recommends considering both initial and recurring costs of equipment and services in the decision making process.


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Source

Final Evaluation Report for the Greater Yellowstone Regional Traveler and Weather Information System (GYRTWIS)

Author: Sanchez, R., et al.

Published By: Federal Highway Administration, U.S. DOT

Prepared by SAIC for the U.S. DOT

Source Date: 12/30/2003

EDL Number: 13958

URL: http://ntl.bts.gov/lib//jpodocs/repts_te/13958.html

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Lesson Contacts

Lesson Contact(s):

Robert Sanchez
SAIC
859-626-5109
Robert.R.Sanchez@saic.com


Agency Contact(s):

Mike Bousliman
Montana Department of Transportation, Maintenance Division
406-444-6159
mbousliman@mt.gov

Lesson Analyst:

Firoz Kabir
Noblis
202-863-2987
firoz.kabir@noblis.org


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Notes

Lesson of the Month for February, 2007 !


Lesson ID: 2006-00206