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NATIONAL NCHRP REPORT 560 COOPERATIVE HIGHWAY RESEARCH PROGRAM Guide to Contracting ITS Projects
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TRANSPORTATION RESEARCH BOARD EXECUTIVE COMMITTEE 2006 (Membership as of March 2006) OFFICERS Chair: Michael D. Meyer, Professor, School of Civil and Environmental Engineering, Georgia Institute of Technology Vice Chair: Linda S. Watson, Executive Director, LYNX--Central Florida Regional Transportation Authority Executive Director: Robert E. Skinner, Jr., Transportation Research Board MEMBERS MICHAEL W. BEHRENS, Executive Director, Texas DOT ALLEN D. BIEHLER, Secretary, Pennsylvania DOT JOHN D. BOWE, Regional President, APL Americas, Oakland, CA LARRY L. BROWN, SR., Executive Director, Mississippi DOT DEBORAH H. BUTLER, Vice President, Customer Service, Norfolk Southern Corporation and Subsidiaries, Atlanta, GA ANNE P. CANBY, President, Surface Transportation Policy Project, Washington, DC DOUGLAS G. DUNCAN, President and CEO, FedEx Freight, Memphis, TN NICHOLAS J. GARBER, Henry L. Kinnier Professor, Department of Civil Engineering, University of Virginia, Charlottesville ANGELA GITTENS, Vice President, Airport Business Services, HNTB Corporation, Miami, FL GENEVIEVE GIULIANO, Professor and Senior Associate Dean of Research and Technology, School of Policy, Planning, and Development, and Director, METRANS National Center for Metropolitan Transportation Research, USC, Los Angeles SUSAN HANSON, Landry University Professor of Geography, Graduate School of Geography, Clark University JAMES R. HERTWIG, President, CSX Intermodal, Jacksonville, FL ADIB K. KANAFANI, Cahill Professor of Civil Engineering, University of California, Berkeley HAROLD E. LINNENKOHL, Commissioner, Georgia DOT SUE MCNEIL, Professor, Department of Civil and Environmental Engineering, University of Delaware DEBRA L. MILLER, Secretary, Kansas DOT MICHAEL R. MORRIS, Director of Transportation, North Central Texas Council of Governments CAROL A. MURRAY, Commissioner, New Hampshire DOT JOHN R. NJORD, Executive Director, Utah DOT SANDRA ROSENBLOOM, Professor of Planning, University of Arizona, Tucson HENRY GERARD SCHWARTZ, JR., Senior Professor, Washington University MICHAEL S. TOWNES, President and CEO, Hampton Roads Transit, Hampton, VA C. MICHAEL WALTON, Ernest H. Cockrell Centennial Chair in Engineering, University of Texas at Austin MARION C. BLAKEY, Federal Aviation Administrator, U.S.DOT (ex officio) JOSEPH H. BOARDMAN, Federal Railroad Administrator, U.S.DOT (ex officio) REBECCA M. BREWSTER, President and COO, American Transportation Research Institute, Smyrna, GA (ex officio) GEORGE BUGLIARELLO, Chancellor, Polytechnic University of New York, and Foreign Secretary, National Academy of Engineering (ex officio) SANDRA K. BUSHUE, Deputy Administrator, Federal Transit Administration, U.S.DOT (ex officio) J. RICHARD CAPKA, Acting Administrator, Federal Highway Administration, U.S.DOT (ex officio) THOMAS H. COLLINS (Adm., U.S. Coast Guard), Commandant, U.S. Coast Guard (ex officio) JAMES J. EBERHARDT, Chief Scientist, Office of FreedomCAR and Vehicle Technologies, U.S. Department of Energy (ex officio) JACQUELINE GLASSMAN, Deputy Administrator, National Highway Traffic Safety Administration, U.S.DOT (ex officio) EDWARD R. HAMBERGER, President and CEO, Association of American Railroads (ex officio) JOHN C. HORSLEY, Executive Director, American Association of State Highway and Transportation Officials (ex officio) JOHN E. JAMIAN, Acting Administrator, Maritime Administration, U.S.DOT (ex officio) J. EDWARD JOHNSON, Director, Applied Science Directorate, National Aeronautics and Space Administration (ex officio) ASHOK G. KAVEESHWAR, Research and Innovative Technology Administrator, U.S.DOT (ex officio) BRIGHAM MCCOWN, Deputy Administrator, Pipeline and Hazardous Materials Safety Administration, U.S.DOT (ex officio) WILLIAM W. MILLAR, President, American Public Transportation Association (ex officio) SUZANNE RUDZINSKI, Director, Transportation and Regional Programs, U.S. Environmental Protection Agency (ex officio) ANNETTE M. SANDBERG, Federal Motor Carrier Safety Administrator, U.S.DOT (ex officio) JEFFREY N. SHANE, Under Secretary for Policy, U.S.DOT (ex officio) CARL A. STROCK (Maj. Gen., U.S. Army), Chief of Engineers and Commanding General, U.S. Army Corps of Engineers (ex officio) NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM Transportation Research Board Executive Committee Subcommittee for NCHRP MICHAEL D. MEYER, Georgia Institute of Technology (Chair) ROBERT E. SKINNER, JR., Transportation Research Board J. RICHARD CAPKA, Federal Highway Administration C. MICHAEL WALTON, University of Texas at Austin JOHN C. HORSLEY, American Association of State Highway LINDA S. WATSON, LYNX--Central Florida Regional and Transportation Officials Transportation Authority JOHN R. NJORD, Utah DOT
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NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM NCHRP REPORT 560 Guide to Contracting ITS Projects KENNETH R. MARSHALL Edwards and Kelcey Baltimore, MD PHILIP J. TARNOFF Independent Consultant Rockville, MD S UBJECT A REAS Highway Operations, Capacity, and Traffic Control Research Sponsored by the American Association of State Highway and Transportation Officials in Cooperation with the Federal Highway Administration TRANSPORTATION RESEARCH BOARD WASHINGTON, D.C. 2006 www.TRB.org
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NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM NCHRP REPORT 560 Systematic, well-designed research provides the most effective Price $30.00 approach to the solution of many problems facing highway Project 3-77 administrators and engineers. Often, highway problems are of local ISSN 0077-5614 interest and can best be studied by highway departments individually or in cooperation with their state universities and ISBN 0-309-09848-3 others. However, the accelerating growth of highway transportation Library of Congress Control Number 2006923871 develops increasingly complex problems of wide interest to © 2006 Transportation Research Board highway authorities. These problems are best studied through a coordinated program of cooperative research. In recognition of these needs, the highway administrators of the American Association of State Highway and Transportation COPYRIGHT PERMISSION Officials initiated in 1962 an objective national highway research Authors herein are responsible for the authenticity of their materials and for obtaining program employing modern scientific techniques. This program is written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. supported on a continuing basis by funds from participating member states of the Association and it receives the full cooperation Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the and support of the Federal Highway Administration, United States understanding that none of the material will be used to imply TRB, AASHTO, FAA, Department of Transportation. FHWA, FMCSA, FTA, or Transit Development Corporation endorsement of a The Transportation Research Board of the National Academies particular product, method, or practice. It is expected that those reproducing the was requested by the Association to administer the research material in this document for educational and not-for-profit uses will give appropriate program because of the Board's recognized objectivity and acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. understanding of modern research practices. The Board is uniquely suited for this purpose as it maintains an extensive committee structure from which authorities on any highway transportation subject may be drawn; it possesses avenues of communications and NOTICE cooperation with federal, state and local governmental agencies, The project that is the subject of this report was a part of the National Cooperative universities, and industry; its relationship to the National Research Highway Research Program conducted by the Transportation Research Board with the Council is an insurance of objectivity; it maintains a full-time approval of the Governing Board of the National Research Council. Such approval research correlation staff of specialists in highway transportation reflects the Governing Board's judgment that the program concerned is of national importance and appropriate with respect to both the purposes and resources of the matters to bring the findings of research directly to those who are in National Research Council. a position to use them. The members of the technical committee selected to monitor this project and to review The program is developed on the basis of research needs this report were chosen for recognized scholarly competence and with due identified by chief administrators of the highway and transportation consideration for the balance of disciplines appropriate to the project. The opinions and departments and by committees of AASHTO. Each year, specific conclusions expressed or implied are those of the research agency that performed the areas of research needs to be included in the program are proposed research, and, while they have been accepted as appropriate by the technical committee, to the National Research Council and the Board by the American they are not necessarily those of the Transportation Research Board, the National Research Council, the American Association of State Highway and Transportation Association of State Highway and Transportation Officials. Officials, or the Federal Highway Administration, U.S. Department of Transportation. Research projects to fulfill these needs are defined by the Board, and Each report is reviewed and accepted for publication by the technical committee qualified research agencies are selected from those that have according to procedures established and monitored by the Transportation Research submitted proposals. Administration and surveillance of research Board Executive Committee and the Governing Board of the National Research contracts are the responsibilities of the National Research Council Council. and the Transportation Research Board. The needs for highway research are many, and the National Cooperative Highway Research Program can make significant contributions to the solution of highway transportation problems of mutual concern to many responsible groups. The program, however, is intended to complement rather than to substitute for or duplicate other highway research programs. Published reports of the NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM are available from: Transportation Research Board Business Office NOTE: The Transportation Research Board of the National Academies, the 500 Fifth Street, NW National Research Council, the Federal Highway Administration, the American Washington, DC 20001 Association of State Highway and Transportation Officials, and the individual and can be ordered through the Internet at: states participating in the National Cooperative Highway Research Program do http://www.national-academies.org/trb/bookstore not endorse products or manufacturers. Trade or manufacturers' names appear herein solely because they are considered essential to the object of this report. Printed in the United States of America
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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished schol- ars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and techni- cal matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Acad- emy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achieve- ments of engineers. Dr. William A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, on its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Acad- emy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both the Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. William A. Wulf are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is a division of the National Research Council, which serves the National Academy of Sciences and the National Academy of Engineering. The Board's mission is to promote innovation and progress in transportation through research. In an objective and interdisciplinary setting, the Board facilitates the sharing of information on transportation practice and policy by researchers and practitioners; stimulates research and offers research management services that promote technical excellence; provides expert advice on transportation policy and programs; and disseminates research results broadly and encourages their implementation. The Board's varied activities annually engage more than 5,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. www.TRB.org www.national-academies.org
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COOPERATIVE RESEARCH PROGRAMS STAFF FOR NCHRP REPORT 560 ROBERT J. REILLY, Director, Cooperative Research Programs CRAWFORD F. JENCKS, Manager, NCHRP ANDREW C. LEMER, Senior Program Officer EILEEN P. DELANEY, Director of Publications NATALIE BARNES, Editor NCHRP PROJECT 3-77 PANEL Field of Traffic--Area of Operations and Control LAWRENCE F. YERMACK, PB Farradyne, Rockville, MD (Chair) PAUL BARRETT, New York State DOT ANN LORSCHEIDER, North Carolina DOT JEFF MCRAE, California DOT J. SCOTT NICHOLS, Texas DOT JAMES R. ROBINSON, Green Valley, AZ STEPHEN E. ROWE, Iteris, Inc., Anaheim, CA JOHN W. STRAHAN, Topeka, KS DAVID A. ZAVATTERO, Illinois DOT MAC LISTER, FHWA Liaison RICHARD A. CUNARD, TRB Liaison AUTHOR ACKNOWLEDGMENTS This guide was prepared as a result of NCHRP Project 3-77. decision process presented in the guide. We would like to thank the Edwards and Kelcey served as the prime contractor. Kenneth R. Mar- Kentucky Transportation Cabinet, Illinois Department of Transporta- shall, P.E., Vice President, Edwards and Kelcey, presided as the prin- tion, New York State Department of Transportation, Texas Depart- cipal investigator and Dr. Phil Tarnoff presided as the co-principal ment of Transportation, and Virginia Department of Transportation investigator. In addition to the principal and co-principal investigators, for participating in the survey. This research was positively influenced Jim Haley, Tom Jacobs and James Witherspoon served as contribut- by the cumulative experience and knowledge of the review panel, ing authors. Javier Ordonez served as a research assistant and provided chaired by Larry Yermack. In several instances, the review panel pro- invaluable support in the preparation and analysis of the survey of state vided insight and the necessary resources needed to produce this departments of transportation procurement policies, procedures and guide. Lastly, we are especially appreciative for editorial contributions practices. Mr. Ordonez also developed the website that automates the provided by the Edwards and Kelcey administrative staff.
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FOREWORD By Andrew C. Lemer Staff Officer Transportation Research Board This report provides guidance on the procurement of intelligent transportation systems (ITS), including variable message signs, traffic detectors, signal controllers, and a variety of other hardware and software that entails applications of advanced electronics and informa- tion management to regulate and facilitate traffic flow. This guide should be useful to gov- ernment officials, traffic engineers, system integrators, and others involved in the specifica- tion and purchasing of ITS installations. Intelligent transportation systems (ITS) procurements often entail sophisticated assem- blages of electronic equipment and software that are challenging to specify because they are tailored to the unique requirements of the procuring agency and use components embody- ing technology that can advance substantially in the time between an installation's concep- tion and realization. Because of these complexities and uncertainties, the low-bid contract- ing process that transportation agencies traditionally use to purchase capital improvements often is not the best approach for ITS procurements. Experience has shown that the ITS procurement method can have substantial influence on the ultimate success of the ITS installation. The procurement method determines how responsibilities are distributed and decisions are made, the qualifications of the contractor, the systems engineering process, and the controls available to the contracting agency. The procurement method, ideally selected to suit the characteristics of the procuring agency as well as those of the project, can make or break a project. The objective of this research was to develop a guide to contracting ITS projects and ser- vices, which would highlight best practices and recommend contracting strategies and con- tract types, terms, and conditions for ITS development, integration, system acceptance, war- ranty, maintenance, and upgrade. The research was designed to address these matters at all levels, from determining an overall procurement strategy that is compatible with a systems engineering process; to selecting appropriate contract types and defining contract deliver- ables, managing the contract and change orders, validating and verifying software, and accepting the system; to addressing ongoing system support. Under NCHRP Project 3-77, "Guide to Contracting Intelligent Transportation System Projects," researchers at Edwards and Kelcey, Inc. (1) reviewed the transportation and tech- nology literature to identify effective contracting methods and their strengths and weak- nesses, augmenting the review by surveying state and local transportation agencies; (2) iden- tified contracting methods used in other industries that might be suitable for ITS procurements in the transportation industry; (3) characterized ITS projects based on the project complexity, level of new development required, scope and breadth of technologies involved, amount of interfacing to other systems, likelihood of technology evolution, and fluidity of system requirements; (4) described how a systems engineering process may be v
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vi Foreword incorporated into the various contract types and assessed the impact of changing technol- ogy and requirements, from project conception to completion, on the contract and the potential implications for contracting flexibility; (5) recommended contract types, includ- ing new, innovative approaches, for the likely range of ITS procurements; and (6) prepared the guide presented here. In addition to this guide, the research team prepared a final report describing their work and many interim results that may be of value to other researchers and professionals facing ITS procurement issues. That report is being published simultaneously as NCHRP Web- Only Document 85 (www4.trb.org/trb/onlinepubs.nsf/). Finally, the researchers developed an on-line tool that applies the guide's decision-making process; the tool may be accessed from the project description on the TRB web site (www4.trb.org/trb/crp.nsf/All+Projects/ NCHRP+3-77).
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CONTENTS 1 About This Guide 2 Assumptions About the Reader 3 Guide Organization 5 Before We Get Started 5 Project Planning 5 Project Feasibility 6 COTS versus Custom System Development 6 Outsourcing 7 The Procurement Process 7 Work Distribution 7 Method of Award 8 Contract Form 8 Contract Type 9 Terms and Conditions 9 Systems Engineering as It Relates to Contracting 11 The Decision Model 14 Step 1Make Initial Decisions 15 Step 2Determine Work Distribution 16 Step 3Define Project Category(ies) 19 Step 4Determine Agency Capability Level 21 Step 5Select Applicable Systems Engineering Process(es) and Procurement Package(s) 23 Step 6Apply Differentiators 24 Step 7Assess Package and Make Final Selections 25 Step 8Define Contract Scope and Terms and Conditions 27 Contract Terms and Conditions Definitions 32 Appendix A Determining ITS Project Category (Complexity and Risk) 35 Appendix B Determining Agency Capability Level vii