Lesson

Minimize problems in creating contractual arrangements for testing a new ITS technology by creating negotiating benchmarks, designing a partnership arrangement, and developing a separate procurement process for different technological components.

A Washington State Department of Transportation’s experience with testing of new variable speed limit technology to reduce winter accidents on a mountain pass.


3/1/1999
Washington,United States


Background (Show)

Lesson Learned

The Travel Aid project deployment required the involvement of several WSDOT offices, as well as different consultants and vendors. As the project progressed, contractual arrangements between WSDOT and consultants shifted and were occasionally difficult. At times, negotiating these arrangements delayed the project and added to the cost, especially because of the use of non-standard equipment. However, the use of benchmarks may have helped reduce negotiating delays. After the contracts were developed, a partnership-like arrangement among the involved organizations was important to the eventual completion of the system.

The project's evaluation report provided a number of suggestions in terms of contractual arrangements:
  • Create reasonable negotiating benchmarks that are agreed upon by the parties setting up contracts. Benchmarks can indicate when negotiations are to be broken off and will reduce damaging negotiation delays in the development of the project.
  • Design the project as a partnering arrangement, with shared risk and pooling of resources. Develop contracts that specifically assign risk to both the private and public entities involved. The joint nature of this arrangement will encourage the consultant to bring the project to fruition, even after public funds have been depleted.
  • Develop a separate procurement process for different technological components to allow the project manager to communicate directly with the suppliers. This will improve quality control and avoid problems when public agency staff become uncomfortable enforcing contract requirements for ITS items that are not standard to typical highway construction projects.
  • Expect changes in system components or functionality to cause system delays. Contractual issues caused a number of long delays to the Travel Aid project. For example, once WSDOT had developed a Travel Aid proposal, a design consultant/sub-consultant was selected, and the terms of the contract were negotiated. Major issues for the sub-consultant were per diem rates, intellectual property rights, and suitable pre-award audit information. Audit information was needed to justify the sub-consultant’s overhead rates, which were greater than generally allowed by WSDOT. After nearly two years of negotiation, an agreement was reached. Surprisingly, the sub-consultant then abruptly withdrew from the project before signing, citing excessive delays as the chief cause of its retreat. Note that the sub-consultant was the primary contributor of "new" technology to the project. Its withdrawal from the project caused much concern on the part of the project team and delayed the project considerably. Other issues involving equipment procurement further delayed the project from one to two full construction seasons.
This experience suggests that making contractual arrangements to deploy new technology may be difficult, and a flexible approach to contracting may help. For this project, after the contracts were signed, the addition of and changes to system components and the acceptance of non-compliant equipment delayed the project and added to the cost. However, the project benefited from a partnership arrangement in which dissimilar resources were exchanged and similar resources were pooled.


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Source

Travel Aid: Lessons Learned and Recommendations

Author: Booz-Allen and Hamilton

Published By: U.S. Department of Transportation, Highway and Vehicle Technology Group

Source Date: 3/1/1999

Other Lessons From this Source

Lesson Contacts

Lesson Contact(s):

Edward McCormack
Washington State Transportation Center
206-543-3348
edm@u.washington.edu


Agency Contact(s):

Larry Senn
WSDOT
206-543-6741
larsenn@u.washington.edu

Lesson Analyst:

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


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Lesson ID: 2005-00084