After SunPass Debacle, State Urges More Oversight Of Contracts

Originally published on November 26, 2019 6:58 am

Wrapping up a long-awaited probe of the botched upgrade of the SunPass toll-collection system, the governor’s chief inspector general said more oversight is needed of state transportation contracts.

Finding a wide range of fault, Florida Chief Inspector General Melinda Miguel recommended the Department of Transportation have better communications with the public and smaller, more manageable vendor contracts.

The inspector general’s office was asked in August 2018 by former Transportation Secretary Michael Dew to conduct the review of the SunPass toll-system conversion.

RELATED: Florida Turnpike Eyes Changes After SunPass Troubles

Miguel found a heavy reliance on consultants to oversee the development, management and implementation of the project.

She also confirmed in the 61-page report that as of July 31, about $184 million remained uncollected from SunPass and Toll-By-Plate customers for toll transactions recorded between June 11, 2018, when the new system went live, and May 31, when the system was considered back to normal business.

“At this time, the full financial impact of potential revenue loss is unknown, and likely will not be known for several months as collection efforts progress on the outstanding receivables,” the report said.

Nicola Liquori, executive director of the Turnpike Enterprise, had advised lawmakers in September that losses in toll collections could exceed $50 million, as 50 to 60 percent of the backlog might never be recovered, even with the efforts of collection agencies.

The SunPass system conversion, several years in the works, was supposed to last about a week and be completed in June 2018.

Instead, the new system intended to unify three toll operations --- SunPass, the Miami-Dade Expressway Authority and the Tampa-Hillsborough Expressway Authority --- was overwhelmed by the volume as it went live. Parts of the system were down for a month, and serious issues lingered into August 2018 involving overcharges, poor website performance and unacceptable wait times at a customer call center.

In all, 2,247 electronically billed SunPass customers experienced overdrafts to their bank accounts when the system recovered weeks of uncollected tolls, requiring $189,885 in refunds.

RELATED: Florida Will Cut Ties With Troubled SunPass Contractor

In July 2019, the state announced it would seek new bids in three years instead of renewing its contract with New Jersey-based Conduent State & Local Solutions, the company that oversaw last year’s SunPass conversion.

Conduent's $343 million contract includes running the system for the next three years. The state has imposed $10.7 million in liquidated damages and penalties against Conduent.

In response to Miguel’s findings, the state Department of Transportation noted it is soliciting ideas from the industry to replace what is known as the Centralized Customer Service System and assembling a team of expressway authority staff and department employees to evaluate the current system.

“The department will continue to do everything within its authority to ensure the current vendor’s performance is in accordance with the terms of the existing contract and hold the vendor accountable for its deficiencies,” the department said in a news release accompanying Miguel’s review. “The department is absolutely committed to providing our citizens and toll facility customers a tolling system they deserve, which is a system that operates in an efficient and accountable manner.”

A spokesman for Conduent pointed to a Nov. 18 letter included in the report from company Senior Director David Schnell responding to Miguel’s preliminary findings.

Schnell contended in the letter that “transitioning two legacy systems to the new system “was always expected, by all parties, to lead to a backlog in transactions.” However, Schnell said the new system “experienced much higher transaction volumes than anticipated in the contract.”

“Significant program improvements have since been made, and as a result, the SunPass website, mobile app, and IVR (Interactive Voice Response) are all now operating to specifications,” Schnell wrote. “Toll postings and invoice mailings are current and accurate.”

Among her recommendations, Miguel said that in future projects on the scale of the SunPass conversion, the work should be overseen by a single centralized state project director who reports to a senior level manager.

“If contracting with a consulting firm for project oversight, require the consulting firm to ensure: the department retains final written approval of system-related functions;  the department has access to all project related data and communications; and, a specific project charter (or similar document) with deliverables is approved that outlines roles, responsibilities, and accountability for tasks,” the report said.

Miguel also suggested bringing in independent verification services to provide guidance and testing, consider separate contracts for different aspects of projects and that new contracts follow public-records requirements.

Miguel suggested a “soft roll out” of any new system to briefly run concurrent with the older system and that the state agency “not solely rely on the contracted vendor to provide insight to what is occurring within the system.”

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