Lesson

Consider the project needs when selecting the most appropriate procurement method.

San Antonio and Maricopa County's experiences with a flexible procurement process.


December 2000
San Antonio,Texas,United States; Maricopa County,Arizona,United States


Background (Show)

Lesson Learned

Institutional issues will seldom cause an ITS project to come to a halt, but they can significantly impact the implementation and deployment through increased costs and delayed schedules. The procurement process used for most construction projects usually lacks the flexibility to meet the needs of most ITS projects, and the public sector's aversion to taking risks just contributes to the problem. ITS participants need to recognize that the traditional approach may be too restrictive for many ITS systems because of the rapidly changing technology. ITS administrators need to examine their project needs and use the most appropriate procurement methods that will address those needs. There are a variety of procurement methods to be explored and managers must choose those best suited for their project requirements. The following examples provide some insight into the benefits of applying appropriate procurement methods.
  • Look for innovative ways to build flexibility into contracts. Many administrators feel that contracts based on "cost-plus" payments, "lump-sum" payments, or "labor-hour" payments would not ensure tangible results or acceptable products. In San Antonio, Texas, City DOT officials executed a fixed-price contract with their systems integrator, with variations available on each task. Under this contract, the systems integrator offered different options that could be completed under different funding levels. The Texas DOT administrators allowed the task cost variation provisions to be incorporated into the contract, transferring funds among the tasks when necessary.
  • Identify and apply the most efficient contract mechanisms available among the ITS participants. Because the Maricopa County DOT in Arizona had a flexible procurement process and was able to work with the local stakeholders, AZTechTM Model Deployment Initiative participants determined that it was more efficient to use the county for the official procurement agency than to use the Arizona DOT. Other agencies involved in the project, however, were given the flexibility to use the county as the procuring agency for their selected technologies, or to procure products and services themselves through existing or new contracts and be reimbursed by the AZTechTM project.
Even when procurement issues have been addressed, they can still impede the progress of some ITS deployments. Most agencies offer several procurement options besides the traditional acquisition procedures for construction projects. This lesson suggests that ITS participants need to investigate their agencies procurement options, look for innovative ways to build flexibility into their contracts, and identify ways to work within the procurement system to meet their project needs. Early planning could save significant time and money later during project deployment.


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Source

What Have We Learned About ITS?

Author: Joseph Sussman, et al. (MIT)

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

Source Date: December 2000

EDL Number: 13316

Other Reference Number: Report No. FHWA-OP-01-006

URL: http://ntl.bts.gov/lib//jpodocs/repts_te//13316.pdf

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Lesson Categories

Procurement > Contract Type

Application Areas

None defined

States

Texas
Arizona

Countries

United States

Focus Areas

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Goal Areas

Productivity

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Lesson ID: 2006-00298