Contracting Fixed-Route Bus Transit Service (2018)

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94 Contracting Fixed-Route Bus Transit Service Project purpose: Most of the literature on contracting focuses on cost benefit analyses. The purposes of this synthesis are to examine the process of procurement and oversight to ensure quality fixed-route bus transit services and to provide summary information and case examples that can be used by transit systems in their decision making process. What constitutes a “good” RFP/procurement process? What are the pitfalls that can occur in the contracting experience and how can these be avoided or resolved? The study will answer these questions by identifying successful strategies and best-practice solutions. The survey questions try to address as many situations as possible, but given the variety of circumstances and transit systems, not all questions may be appropriate for all agencies. We encourage you to obtain input from others in your agency as needed. If any question does not apply to your system, simply answer “N/A.” We also ask for recommendations for other agencies to be included in our sample and for your willingness to participate in a telephone interview if your agency is selected for a more detailed case example. The final report, to be published by the Transportation Research Board, will summarize best practices in contracting fixed-route bus transit service. This report will be extremely useful to all transit agencies in assessing current policies and identifying approaches that have been success- ful elsewhere. All survey responses will be confidential. Thank you for taking the time to participate. Instructions on returning the survey are included on the last page. Contracting Bus Service 1. What is the government structure of your agency? Independent authority 16 39.0% City department 11 26.8% County department 5 12.2% Regional agency but not an independent authority 6 14.6% Other 3 7.3% Other includes: Department of state government. A subsidiary corporation of the State DOT Joint Power Authority consisting of 22 member cities. A p p e n d i x d Transit Agency Survey Results

Transit Agency Survey Results 95 2. How many buses does your agency operate in maximum service? Small (<25 peak vehicles) 12 29.3% Medium (25 to 99 peak vehicles) 14 34.2% Large (100+ peak vehicles) 15 36.6% 3. What percentage of fixed-route bus transit service does your agency contract out? 100% 32 78.0% 50 to 99% 2 4.9% 25 to 49% 2 4.9% Less than 25% 5 12.2% 4. How long has your agency contracted for fixed-route bus service? More than 10 years 37 90.2% 5 to 10 years 3 7.3% 2 to 4 years 1 2.4% Less than 2 years 0 0.0% 5. What are the reasons that your agency chooses to contract for fixed-route bus service? (Check all that apply) Minimize operating cost 37 90.2% Improve cost efficiency 25 61.0% Take advantage of greater expertise provided by contractors 21 51.2% Minimize size of agency staff 17 41.5% Mandated by the Board or other local/state governing body 15 36.6% Improve labor productivity 10 24.4% Foster competition 7 17.1% Improve service quality 7 17.1% Other 14 34.2% Other includes: Note: While the agency has been contracting fixed route service since the late 1980s, we have only been 100% contracted since August 2012. Driver Training, Meetings, regulatory requirements such as Drug and Alcohol testing. Liability exposure. Demonstration routes or specially funded service (such as special, county- or city-funded service). Required under 5333(b). Service has been contracted since mid-1980s when private service was no longer profitable. Agency management proposed to its board in 2002 the possibility of bringing service in house; however, the board preferred an arms-length relationship and did not want to take responsibility for employing another ∼150 public employees. Transfer of Risk from County to Contractor. Nobody really knows why contracting was chosen in the past, but most likely a combination of the reasons checked above. When the system was originally formed in the 1970s it consolidated several private operations. The public/private model was kept. Certain contracted fixed routes were absorbed by agency when prior operator could no longer operate without a subsidy.

96 Contracting Fixed-Route Bus Transit Service Take on financial responsibility and indemnifies the City. While we provide the contractor vehicles, our Service Provider insures them. The City prefers not to directly work with unions and enter into collective bargaining agreements. It is required in the charter that created the Authority. Contract is only for express bus that connects to commuter rail service. Ensure the other similar service offered by the agency, which is a smaller shuttle bus, remains cost efficient. Challenges 6. Please characterize the following elements as major challenges, minor challenges, or not an issue in contracting fixed-route bus service. Major challenge Minor challenge Not a challenge Staff expertise in contracting 24% 44% 32% Size of agency staff 34% 34% 32% Familiarity with FTA procurement procedures 17% 44% 39% Lack of experience in RFP preparation 10% 34% 56% Elements to contract 17% 24% 58% Ability to attract competing bids 15% 32% 54% Underbidding by bidders 15% 27% 59% Evaluation criteria 7% 49% 44% Workforce retention 20% 51% 29% Loss of control over service 15% 56% 29% Need for oversight 37% 44% 20% Service quality 33% 48% 20% Service integration 7% 51% 41% Disputes with contractor 7% 51% 41% Customer satisfaction 17% 63% 20% Comments include: The agency has four separate contractors. Each contractor is different. We contract with a national company, a locally family owned company, a public agency and a local non-profit. We have different challenges with each provider. In general the private companies are easier to work with because they are familiar with being a contractor, however working with another public agency has the advantage that they know the FTA rules. We’ve substantially changed the pricing structure since the original service contracts to mini- mize risk, accrue attractive and competitively priced proposals, and to split out maintenance costs to detect underbidding. Actually, all of these are major concerns - but a well-structured RFP can address most of them. On service integration, a particular challenge that we are working to address involves fare integration. Our 10+ year old AFC system is not flexible and scalable. We are a couple years away from our next fully integrated solution. Poor employee benefit packages regardless, poor employee wages if not called out (a floor per position) in the RFP. I have only been at this particular location for 1 year, but I am very familiar with the contract- ing process from both sides. From what I can gather at this particular contract, service delivery

Transit Agency Survey Results 97 has gone downhill while the contracting market over the last 10 years has been getting more and more aggressive for pricing. It is less of a partnership in the industry now more like a financial relationship. That has put more pressure on county staff (of which was only myself and one other person when I started) to do complete contract oversight to ensure that the contractor is hitting the minimal acceptable standards. We have a very mature contracting approach which has evolved over 25+ years with 4 differ- ent providers. The directly operated service and contracted service are managed by separate divisions of our agency. Historically, these groups have operated very independently, but we have worked to integrate many functions as use of technology has increased (registering fare boxes, AVL/ APC, etc.). A minor challenge within the agency is how to continue to integrate functions to ensure technology is deployed consistently and data quality from technology systems is high across the agency. The most recent contracted operations provider has not invested in the requisite staff train- ing for bus operators and management staff, thereby leaving our transit agency in peril with regard to satisfactorily meeting FTA requirements. Many operators who are direct employees or subcontracted employees of our prime contractor are not knowledgeable in Drug & Alco- hol requirements, ADA and Customer service areas. In order to meet the DBE requirement, the prime contractor contracted out the fixed route operators and created a separate operat- ing and management environment for fixed route operators and paratransit operators and management staff who were each managed by different managers from both the prime and sub-contracted organizations. This has created a tumultuous operating environment and has required the County to send several notice to cure letters regarding sub-contractor management by the prime operations contractor. 7. Please describe the one major challenge in contracting fixed-route bus service and strategies or tactics used to overcome this challenge. The major challenge has been the lack of qualified management by the prime contractor of its subcontractor, fixed route operators and management. The remedy has been bidding out the contract with no allowable subcontracting of bus operators or managers. Ensuring service quality in a contracted environment. Our strategy has been robust and involved contract oversight. Multiple agency staff focus on ensuring service quality and contract compliance. We are bound by contractual agreements and are unable to modify operator behavior in any significant way. Driver attraction and retention so we partner in job fairs. Lack of competition. The local contractor also does school bus service, which gives it a built-in advantage in bidding for fixed-route service. We are going to bring maintenance in-house and provide a facility for potential contractors in the hopes that there will be more bidders next time. Issues with the system are discussed with the contractor, we are pacified, promises are made but no changes occur. New Contract will assess penalties. Workforce retention and issues surrounding technology use are the primary challenges in the contracted services environment. For workforce retention, we have begun requiring minimum driver wages (starting wage of $16 per hour). Technology use issues fall into two categories; ensuring the contractor uses and maintains technology systems appropriately and

98 Contracting Fixed-Route Bus Transit Service ensuring the agency manages the data consistently, whether the service was directly operated and contracted. The contract management work group works hard to forge and maintain rela- tionships with the system owners and to have a seat at the table on work groups that handle the various technology systems within our agency. We have procured a separate maintenance contract to handle certain high-tech items the operations contractor may not have sufficient expertise to maintain and ensuring the contractor uses the technology appropriately is a matter of continued oversight. Contractor oversight; the management of the system really does belong in the hands of the contractor and when it works, it’s great but when it doesn’t it becomes a nightmare to track, document & address for all parties. Getting the contractor to do what they say they’ll do in the contract. It can be overcome with frequent meetings to follow up on those issues. Significant oversight staffing by the Authority. N/A I think the biggest challenge is the “loss” of control. It helps if both parties know the contract- ing terms real well and that the entity writing the contract makes sure it is thorough enough to cover acceptable baseline service delivery but enough flexibility to grow and adjust the service as needed. However what is equally important is that the agency responsible for contract oversight does their part by continuing to contract oversight, I find in my experience the best contracts are where it is a partnership, and not so much of a “gotcha” game. Employee levels and wages—can be called out in the RFP and a floor established per position, if the agency can afford it. Our challenges are not related to the contract itself but more with operational issues (such as on-time performance) so we work with the contractor to address those issues. Quality of staff provided by contractor. We work with the contractor to develop training and incentive programs. Oversight—Due to limited agency size and current contract specifications the ability to fully monitor and provide real-time oversight has been a challenge. Having very little control over the quality of service provided, unable to change the con- tractor company culture to provide a better service to our customers. We have put in greater controls and penalties in the Contract to allow some control over common customer com- plaints, however there are still issues that cannot be easily quantified or measured that affect the service quality. Internal communications—with limited staff, there is difficulty communicating proper mes- sages to front line staff, operators, etc. Strategies to overcome this is establishing regular contact meetings with service provider to outline upcoming service programs. Reconciling private operator versus public agency interest in service planning. It is not clear that we are as cost efficient as we could be. One significant challenge is lack of direct control over contractor employees, policies and more specifically employee training and retention. Successful strategies include, open com- munication, recurring meetings between agency staff and contractors and strict contract compliance. Maintaining the executed level of manpower on the contract side is always a battle. We have established assessments for failing to provide the SOW per the RFP.

Transit Agency Survey Results 99 Monitoring the collection of good data to report to the National Transit Database (i.e., dead- head miles, vehicle revenue hours, vehicle revenue miles, and missed service). A strategy is to have reporting controls to acquire necessary data and defined methodologies to collect data. Making sure that the price proposed maintains driver seniority and wages. We dictate the minimum wages that must be paid and provide a senior list by dates of hire. At present, we only contract out certain legacy contracted routes that have never been direct operated by the agency. We have a new Memorandum of Understanding with our Local Union which allows for future contracting of existing direct-operated routes, so long as we meet a certain level of direct-operated revenue hours. We really haven’t had any major challenges. One on-going challenge is the need for regular oversight of the contract operation with a very small agency administrative staff. We expanded from three to four agency staff positions in 2013 with one person charged with more regular contract oversight responsibilities. While much improved, this is still a challenge since we oper- ate about 93,000 annual vehicle service hours. The pricing structure should split out the cost factors to minimize risk in bidding. Reduced risk results in lower unit costs. Some costs increase and decrease in direct relationship with service on the street - so we ask for a price per Revenue Service Hour (operator wages and benefits, that factors in deadhead, recruiting, training, uniforms, etc.) and a price per Total Mile (maintenance technician wages and benefits, tires, parts, fluids) to cover wear & tear. We supply the fuel - otherwise that would be a separate cost category. Fixed costs include Insur- ance (based on the # of buses in the fleet) and Admin/Dispatch/Supervision, which includes those wages and benefits, rent, facility maintenance, supervisor cars, and technology. This latter category does not have a direct relationship with service on the street. Admin costs increase or decrease in steps. By splitting out Admin, one can decrease service without risking the infra- structure required to provide that service. One can also see if a proposed budget underbids in any particular category. Preventing the low bidder mentality and/or requirement from negatively affecting the service provided, particularly in the area of operator retention. Contractor oversight. With four contractors operating out of different facilities, none of which are owned by the agency, we have difficulty ensuring that they are meeting all of the contract requirements. We are working to overcome this by having dedicated agency operations staff to work closely with the contractors. Lack of direct supervision of operations and the operators (drivers) who interface with cus- tomers. Tactic: Include specific performance and driver training (emphasizing safety and cus- tomer service) requirements in the contract. Also, agency staff regularly stage direct contact events with customers (e.g., “Ask Transit” desk at our Downtown bus station). Ensuring that all potential contractors fully understand the RFP and all of the components & required to ensure that the bids can be equally compared and scored, and to keep costs down by removing inflated rates when contractors are unsure of what actual costs will be. We’ve tightened our specifications and added several levels of pricing to the RFPs so that rates for different activi- ties, such as Operator training, can be billed at a rate lower than the regular rate that includes all costs associated with providing service. The need for oversight while trying to keep from becoming involved in the day-to-day operation. One of the major challenges is the risk of inconsistent service quality. One way to overcome this challenge is conducting weekly meetings with contractor staff to address various issues.

100 Contracting Fixed-Route Bus Transit Service Encouraging bidders to bid RFP. In order to overcome this I went to the annual State transit association meeting and encouraged vendors and networked with transit providers. Making sure the SOW is descriptive enough to get the work done in the manner you want, but not overly prescriptive such that you may be charged more than necessary to get the work done. This can be overcome by performing an extensive comment period with peers and perspective bidders to comment on the SOW. Setting clear expectations for the quality of service to be provided by the contractors. We continue to modify and refine the Scope of Work with each RFP (Request for Proposals) that is issued to better address our needs. We also solicit service through an RFP so that several factors can be evaluated when choosing a contractor (approach, experience, and price). Ensuring contractor compliance with their proposal. What model of contracting out to be used? Currently the model used is to supply all equip- ment, dictate routes and schedules and have the contractor supply personnel to operate. Much discussion has taken place to try to determine how effective this is. Assessment 8. How would your agency rate its efforts to contract fixed-route bus service? Very successful 22 57.9% Successful 14 36.8% Neutral 1 2.6% Somewhat unsuccessful 0 0.0% Very unsuccessful 0 0.0% Other 1 2.6% Other: The past two contracts (3-years each with options that were not extended) have been plagued by poor management, oversight of operators and management and adherence and knowledge of FTA requirements (ADA, Title VI, etc.) 9. What have been the primary benefits of contracting? Responses summarized in Figure 22, Chapter 4. Verbatim comments below. Comparing costs and efficiency; Reduces operating costs (compared to our directly operated services). Cost containment that allows the maximum amount of transit service to be placed on the street for the riding public. Lower costs, flexibility to make modification to service, sharing best practices and identifying better ways to do things. Lowered costs to a certain extent. Reduced cost, expert service Cost savings Control of costs Contracting allows some added flexibility when adding new service and/or routes, and allows the service to prove its feasibility before moving it in-house. Not having to directly deal with union issues. Contractors bring expertise into our operations.

Transit Agency Survey Results 101 Contracting has been very cost effective for the agency, but even more importantly contrac- tors are more agile and flexible than direct public agency employees. Wide range of area specific expertise, from across the world, applied to local needs to improve or maintain operations and a certain level of service. Contractors have greater ability & leeway to recruit, train, and apply progressive disci- plinary procedures and in general to control costs. They also have much faster access to expertise. Lower operating, maintenance and administrative costs Flexibility of vehicle type (specifically, smaller buses rather than 40- and 60-foot transit buses) and lower operating costs. Lower costs compared to paying the regional public transportation authority for fixed route service. It is cheaper to do it in house. We are able to provide more service for less cost. Cost and operational efficiencies and the ability to collaborate with private sector transporta- tion experts. Overall, our private operator does a very good job. Leveraging knowledge and expertise, easy to implement service changes, limited concern re: human resource management. The City has always contracted out the bus service. Our costs are kept low with a contracted out service and our cost to revenue ratio remains better than other properties in the area. The primary benefit is controlling operating cost in forecasting future budgets. The contract allows for an allocated contracted increase each year for duration of agreement. Also, insurance claims are handled by provider. Cost Insurance cost savings. Low operating costs, flexible staffing Risk is transferred to the contractor, generally the costs are less for the operation. Flexibility in changing service size without regard for consequences of hiring/terminating employees. Compliance Lower cost, lots of experience Simplicity and division of labor and efforts. National expertise. Our union contract has a single pay scale regardless of vehicle size, so low productivity service is very high subsidy. We use contractors to operate these routes in buses smaller that standard 40′ transit buses including 30′ transit buses and various cut-away sizes. Limits liability, provides regulatory compliance The contractor takes care of Drug and Alcohol testing and hiring of drivers. Protection from liability Cost efficiency

102 Contracting Fixed-Route Bus Transit Service We have removed the day-to-day operational issues from the consideration of our executive leadership and board of directors. This includes establishing a clear line with regards to issues of collective bargaining. The benefits of contracting are not having to rely on the local government to hire and train qualified staff to manage FTA-regulated transit operations and management. 10. What have been the primary drawbacks of contracting? Responses summarized in Figure 23, Chapter 4. Verbatim comments below. The drawbacks of contracting have been the isolated poor management of some of the con- tractors and the time needed to explain and advise County leadership on the federal require- ments associated with contracted transportation, pros and cons and compliance requirements. Additional effort is required to ensure seamless services between providers and service qual- ity. It’s also harder to have one “culture” when there are several employers. This comes up when we are looking to enhance our overall safety culture or customer service culture, for example. Bound by contractual agreements People assume they are City employees Lack of competition for bids, leading to a sense of entitlement from the successful bidder. Conflicting objectives, goals. Lack of control As mentioned earlier, contracted and directly operated work are provided by different divi- sions of the agency. The divisions were part of separate agencies until 1994 and remained sepa- rate when the agencies merged. Coordinating efforts across the divisions for fleet, technology, data management, etc. is complicated. As CEO, I have a distinct vision for service and quality that the local team doesn’t fully understand. Not as much control over the operation Quality management, sufficient management oversight by contractor Lack of control and ability to have contractor “own” the service and poor service quality, vehicle maintenance, and extreme operator turnover were significant issues in years past. I think the biggest challenge is the fact that you are at arm’s length of the operations so if there is a customer concern ensuring that distance isn’t apparent to the customer. That arm’s length level of “control” that someone has to give up is the challenge across the board, having a solid oversight program where all parties know what is being measured really helps the relationship. High turnover, low pay, poor benefits, disorganized and overextended contractor management No direct control over operators Lack of control of operating staff Limited Control—The ability to respond to real-time issues concerning work assignments outside of negotiated responsibilities. Transit is extremely dynamic and changes in leadership or direction of agency is sometimes hindered by contract. Lack of control over the service, inability to deal with common customer complaints or gen- eral corporate attitude or culture of the contractor. Establishing responsibility line between contractor and municipality.

Transit Agency Survey Results 103 We have had the same primary operator since the 1970s. It is not clear that our arrangement maximizes cost effectiveness. See previous response The private side tends to lack expertise and talent at the mid-level and it’s difficult to attract such talent with public transit competition. Competitive operator wages also seem to be a challenge for contractors. Low starting wages challenge retention rates. Monitoring the contractor and overcoming communication deficiencies. Quality of training on local policies, employee retention/turnover, customer service. Amount of contract oversight required, and seeming lack of integration with direct-operated network. Less direct control over day to day operations. Savings on labor is overstated, as we are in a very competitive market for bus operator candidates. The lengthy, exhaustive process to do so (9–12 months). In some cases our contractors have a different view of how to operate the service than we do. This is particularly true with our public agency and non-profit contractors. More volatility in labor costs, as contractors are more responsive to fluctuations. Lack of direct supervision of front-line customer service providers (drivers). Contractors could have less community ownership. The disconnect that occurs in direct supervision and communication flow when a third-party provides service. Lack of control over day-to-day operations Service quality None Loss of quality of service. Loss of “sense of ownership” by operators and mechanics. Need for extensive oversight over all aspects of Operations and Maintenance to ensure you are getting what you paid for. Difficulty to quickly address service problems, contractual restrictions to making service changes, perceived lower quality service (by public) Consistency of contractor performance. Constant oversight and budget monitoring. Administering the contract—amending the con- tract is very time-intensive for staff, as changes must be approved by department managers, divisional directors, enterprise executives, and ultimately our governing board. 11. What was the most successful action taken, and why? Responses summarized in Figure 24, Chapter 4. Verbatim comments below. We are in the process of centralizing our contract management functions within one department. Overall, contracting has allowed the maximum amount of transit service to be provided along with increased flexibility. Going to a RFP process where factors in addition to cost were considered when evaluating bids. N/A

104 Contracting Fixed-Route Bus Transit Service Building the RFP and having maintenance included in the per mile cost. This reduced the parts inventory and streamlined accounting. Conducting weekly meeting to evaluate service performance. Providing in-house staff to assist the operation on a daily basis (but not during all service hours) More focus on performance requirements and appropriate liquidated damages for non- performance in the RFP process and subsequent contract. Clearly defining our expectations of our contractors in the contract documents. Good con- tracts make for good partnerships. Requiring a minimum level of staff and full or part time positions operationally so that the contractor didn’t pull benefits away as a cost saving measure, or didn’t under staff their bid proposals. The agency has had several successive growth spurts, in which the start-up expertise of the contractor was vital. To not make price the most significant selection criteria which allowed us to focus more on service quality issues. New contract that starts in July will use agency-provided buses to match the “look and feel” of direct operated service on the heaviest route. This will also be the first time that we have used APC and AVL on contracted bus service to help with service monitoring and design. We provide an Employee Handbook as an exhibit to the RFP and contract to ensure our policies are followed. Periodic operation meetings as well as safety meetings. Consolidating multiple contracts into one major contractor for the region. This has elimi- nated duplicity in oversight and streamlined managing the contractor, while saving money. 12. If you could change ONE aspect in the contracting process that your agency used, what would you change? During this most recent contracting process we received two protests from short-listed vendors who were not selected (this is the first time this has ever occurred with the County for any con- tract). I would include weighted scores to ensure more detailed justification for the recommended vendor. We only included evaluation criteria (as per FTA) in order of descending importance. We had two procurements happening essentially simultaneously. One for fixed route and one for paratransit. That was too much at once. Identifying a way to even the playing field for bidders. We used procurement services to procure the fixed route contract. We have approximately 15 contracts for transit operations including fixed route, demand response and vanpool. We work closely with our procurement department to review our process, scope of work, and contract each time we procure service. Increased CEO control Less paper to review, streamline the evaluation process. The requirement to contract. See above

Transit Agency Survey Results 105 We recently did a joint contract with a State agency for transportation services, where we share the contractor split the costs. The state agency was going from a Management Contract model to an Operations and Maintenance Contracting model. If I had been here at the beginning I would have suggested the state agency first bids on their own as a new contract model then we could work together for a joint O&M contract. I have seen enough agencies transition models to know there is a transition period as the folks at the agency have to change how they work with the contractor. In our case since we are in this jointly using the same transit operator this can provide a challenge for all. The contract is less than 6 months old and it gets better every day so I am sure over time, much like other agencies that have made the contracting model change things will smooth out. More funding so that better wage and benefit levels could be required of all bidders Some proposers become unpleasant in the process. We want to work together as a team with our contractor. Sadly some firms approach it as they would a battle. Since contracting was put in place long before I got here it is difficult to say. Simplification of Contract/Goals—The overall complexity of contract and limited staff exper- tise impacts ability to manage. More time required for implementation/start Require operator to undertake electronic run cutting (they currently do it manually). The agency has contracted out our service for over 20 years, as a result we refined our RFP process to the point we are satisfied with the contracting process. The contracting process was great. No suggestions for change. Cost responsibility for bus parts after warranty expiration. Require a fine when the management staff has unfilled positions for extended lengths. The contractor shouldn’t profit from this. Want fare integration already, but will have to wait. No opinion We already use an RFP process, so I have no complaints. The next contract will time the annual renewal process with development of the fiscal year budget—so the renewal request is received and negotiated 9 months before the fiscal year. Have FTA allow for longer base contract terms. We would own our own facility and have the contractor work out of that facility. Making the contractor more responsive to repairing bus damage caused by third parties. Contractor should respond quickly even if that requires fronting the money while waiting for third party insurance payments. We are required to follow State procurement laws, but the ability to more freely negotiate with contractors would lower rates, raise efficiencies, and improve customer service. Concentration on personnel proposed for certain management positions. Include the staffing report for the period of the invoice to confirm hourly rates. Procurement complications Give ourselves more time to make sure the SOW was exactly correct.

106 Contracting Fixed-Route Bus Transit Service Have agency own operating locations rather than having the contractors provide them. Spending more time in the pre-bid, pre-qualifications process. Reduce the level of bureaucracy required to manage and amend our operating contracts, espe- cially for minor changes, such as when exercising options or addressing service quality. 13. Please describe any “lessons learned” that would benefit other transit agencies. For agencies that are considering contracting out only a portion of operations: be efficient and strategic in deciding which services to contract out. For instance, one approach might be to contract out routes with very low ridership, while continuing to directly operate routes with high ridership - this would enable you to better control service quality on routes that are very popular with customers. Unfortunately, our contracts were developed in a more ad hoc rather than strategic way. N/A Hold contractors to same standard as agency with regard to service quality and performance standards. Make sure the contract requirements, scope of work, etc. are very specific and detail the results expected. Establish a thorough and regular monitor system to track contractor per- formance. Establish and maintain good communication between contractor and agency per- sonnel. Avoid an adversarial relationship. It should be a partnership. Contractor success equals agency success. The SOW needs to have input from many different departments, make sure you take the time to regularly meet with them and get input/direction from them to ensure the SOW is complete. This is best accomplished by having a small dedicated team working on nothing but the SOW to ensure its completeness. Make sure they have plenty of time to get feedback from all stakeholders and the review by potential bidders. They will be able to point out flaws in think- ing or mistakes that can help make the SOW stronger. Once the contract is awarded, oversight is a must, not only from a federal audit standpoint, but from a safety standpoint. Take the time to build an oversight plan, make sure you include all the of the requirements of the SOW. No sense in asking them to do something, that you are paying for, that you don’t check up on. Important to take time when writing the RFP. It takes a committee to evaluate contractor performance and payment. When the RFP was issued and firms were selected for further interviews, there was a focus on the personnel that were being proposed for the GM and Maintenance Manager positions. In hindsight, the people that were proposed were only here for a short time and then there was a change. The people that are being proposed are very important, but I would also focus on interim management if they leave and the process for replacing them. Make the contract more attractive to prospective contractors by lengthening the base period (from 1 to 3 years) with multiple one-year renewal options. Researched best industry practices to determine appropriate performance measures (e.g., on-time performance). Owning your own facilities and equipment provides for more control over the product. Ensuring that you hold the contractor to the terms of the contract right from the start. Often the staff in the location are not familiar with the contract terms, which were negotiated by corporate, and so they do not provide the service exactly as required in the contract/RFP. Honestly, it’s extensive. And that’s having been on the private contractor side before coming over to the client side. It would be better served via phone call/interview.

Transit Agency Survey Results 107 Agencies must supply the necessary facilities and buses and ensure, even if through 3rd party periodic audits, that they are maintained. Otherwise, a jurisdiction may fall into a trap (which we are in) where the contractor leases the maintenance facility and no others are to be had nearby. Focus on the local management team, not the regional and corporate staff. You have to live with the local team every day. Review and pre-approve training programs and require a timetable and curriculum for each position. Require that you interview all management staff and approve prior to hiring to fill posi- tions. Dictate minimum wages for drivers and dispatchers, as well as benefits. Review the benefit package and require they honor seniority and hire all current drivers and dispatchers under a one-year probationary period. Explicit verbiage in contract that has contractor reimburse for missed miles and who pays for bus parts after warranty expiration. Make sure you understand what your agency’s goals and objectives are first - safety, OTP, MDBF, other (Employee pay, number of FTEs, etc.) and then use these goals to develop your RFP and SOW. It’s important the contractor understands agency goals, objectives and expecta- tions so they can bid the contract accordingly. The important lesson the agency learned in the development evolution of the RFP process to consider the risk allocation between the agency and the contractor. We removed risk compo- nents of the contract, which resulted in savings for contractor and the agency. It is important to consider the degree of decision making that is desirable for a private con- tractor to have. A contract should be structured so that the contracting agency is aware of the private operator’s profit margin. Use long lead time from RFP to implementation, especially transitioning from one service provider to another. One lesson learned—That Front-line Supervision and Maintenance are areas that shouldn’t be contracted out. Those positions provide the real-time contractor oversight “eyes on the ground.” Conflicts of interest can occur when those are contractor employees. Again, creating a positive “one team” approach is vital. Establishing clear expectations and then making sure they are met. “Inspect what you Expect” The last RFP we published did not ask the proposers to identify a specific management team. As most agencies, we have experienced the “bait and switch” with a proposed manage- ment team so, in our RFP, we asked each firm to tell us what their company would bring to our contract from a corporate support perspective. It made it easier for the firms to focus on our service without competing for the talent that is available—many of whom do NOT want to be identified in a proposal for fear of jeopardizing their current position. We included specific steps we expected from the successful proposer as to how the management team would be selected and approved. The result was a group of very good proposals that were focused on the things we were most interested in: technology, KPIs, safety, and employee development/training. Pay the deadhead, if you as the agency make the schedules. Court the industry, talk to every- one and make sure every contractor in the industry thinks you would hire them if they submit a great proposal to your next RFP. It’s all about the schmooze. Consider handling parts as a pass-through to keep the contractor from making profit by withholding parts and downing buses excessively. Purchase as much of everything yourself as the agency so that the contract is

108 Contracting Fixed-Route Bus Transit Service as close to a pure “labor contract” as possible. Anything the contractor brings to the table will include profit and OH. I think having an RFP that clearly defines exceptions and rules. But also don’t over promise. For example, if your agency is not sure if you are replacing paratransit vehicles in the next fiscal year then don’t include it in your proposal. Because the contracting entities will give you the most competitive price they can make reasonable assumptions for. Also what I think is helpful having worked both sides of these relationships is making sure the communication between the contractor and the contractor entity is often and clear. Make it a point to make sure everyone understands what the agency’s goals are, what concerns from both sides are. IF both parties have a better understanding of the challenges and oppor- tunities it makes the contract management smoother and in the end better service for the customer on the street. Where do I begin—I’ve been doing this my entire 35-year transit career?! Primarily those described above. With the most recent procurement, we had finally gotten to close to the service quality we expected and knew what resources were necessary on the contractor’s part; therefore, we required all vendors to propose the same number and composition of manage- ment, maintenance, administrative, supervision, and support personnel to prevent low-ball, naive bids. Small to mid-sized transit contract managers are mediocre at best. Very little return for significant investment. Contractor management by corporate staff is very poor for small operators. No lessons learned yet. (1) Don’t ram liquidated damages down contractor throats. Offer incentives too . . . (2) It’s not a game in terms of making your contractor absorb costs or trying to screw them over. Your reputation gets out and you’ll pay for it the next time. (3) Clients need to stay out of the management of personnel of the contractor. Boards and clients should be penalized for micro- managing & meddling (4) Have your oversight IN PLACE before you contract and have the oversight team/person help in the transition . . . I wish I had done that. Contract was awarded for a 3 year period with 2 3-year extensions. Total term = 9 years. Option years contract increase tied to CPI. CPI change has not kept up with average wage. Drivers are approximately 25% lower than average for our area. This has caused a lot of driver turnover and we have seen a change in the quality of drivers. We are expecting between a 25–30% increase in contract cost when the contract is competitively bid in 2018. Contract should never exceed 5 years. Talk to potential bidders about what they need to allow them to make a bid on the contract. Communicate with your current contractor’s local management team. They will tell you what they need locally in order to support your work but that corporate won’t give them as they protect their bottom line. Train staff how to write a good scope of work. Visit with peer agencies. Borrow heavily from contracts that are working well. Take your time with the procurement process. Train your staff in the responsibilities of contract oversight. Adequately fund an oversight staff. One person cannot do this unless you are teeny tiny. Through this current procurement for a new operations and maintenance provider, we expe- rienced two protests from two of the three, short-listed vendors. One vendor was a small firm with ties to the local area and no documented “true” fixed route experience and the other was a

Transit Agency Survey Results 109 large, international transportation vendor with significant experience. The recommended ven- dor is the American subsidiary of another large, international transportation vendor with sig- nificant local experience with long-standing operations contracts (decades-long). The protests were reviewed by a third party law firm and denied. However, I learned that the Procurement Manager and the selection committee’s detailed notes during every meeting were invaluable and told the story of how a fair and equitable decision was made. From this experience, I would encourage all procurement and selection committees to require a pre-proposal conference (we did) for all interested parties and explain in detail the: (1) Selection methodology; (2) Protest procedures; (3) Third-party review of protests. Procurement Framework 14. How does your agency structure your Request for Proposals for fixed-route contracting services? (Check all that apply) Standard RFP template used with specific scope inserted 20 54.0% Based on RFPs from similar transit agencies 20 54.0% New from scratch RFP 9 24.3% Developed by a consultant 8 21.6% Other (please specify) 9 24.3% Other includes: We have been using the same basic RFP for many years which was based upon those of similar agencies and adapted for our use. RFP has been developed over many years and updated prior to advertisement to address any new issues identified. We use a combination of templates and past Fixed Route RFPs to develop the contract SOW. The contract for the entity I am currently at was originally developed by a consultant and has been modified from that original template since. As a new person to the position I have taken to use sticky notes to make notes in the current RFP for the next one. If you wait until a year out of the renewal to think of all the terms or information you would like to modify in your next procurement you will miss some items. Also I have a unique experience of working for a contractor in the Business Development group, so responding to RFPs and being on the other side developing RFP and evaluating so I take those positions both into consideration. If an entity wanted to build better RFPs reach out to a few contracting agencies either WELL before renewal or as a debrief after award. That will help you build a better RFP. Evolution and adaptation! I took a bad one and tore it to the ground and rebuilt it. So I used someone else’s framework but made it my own. I wrote it to solve/resolve managerial issues and approaches to service. In the past the RFP was developed by a consultant. The Next RFP will be based on RFPs from similar transit agencies. Modification of previous RFP (with 2 operating contracts), a RFP is issued on average every 4-8 years. RFP is developed in coordination with external legal counsel. The past fixed-route contract was very vague in some areas and too detailed in others. I took examples from my past experience and other transit properties and added more teeth and also added penalties with more consequences for non-performance, given our recent past history with our current provider.

110 Contracting Fixed-Route Bus Transit Service 15. What elements does your agency include in a contracting RFP? (Check all that apply) Description of bus service (number of routes/span or revenue hours of service) 37 100.0% Description of vehicles and facilities 37 100.0% Evaluation criteria 37 100.0% Detailed description of contractor responsibilities 37 100.0% Technical proposal requirements 36 97.3% Minimum contractor qualifications 36 97.3% FTA clauses 33 89.2% Detailed personnel requirements 31 83.8% Description of performance incentives and liquidated damages provisions 31 83.8% Expected price range 3 8.1% Other (please specify) 6 16.2% Other includes: Detailed description of Authority responsibilities. History of system, description of the future, description of the community and the history. . . . . the kitchen sink. We provide current wage and staffing information for the incumbent contractor employees. Expectations for employee wages; technology that is provided by the agency and what is expected to be provided by contractor. Maintenance quality control inspection criteria, technical specifications for fuel and fluids for buses. 16. How is the RFP publicized? (Check all that apply) Agency or governmental website 36 97.3% National transit publications (e.g., Passenger Transport) 28 75.7% Local print media 21 56.8% Transit-specific on-line media 19 51.4% General on-line media 11 29.7% Other (please specify) 10 27.0% Other includes: Quest CDN. Directly sent to known vendors who might be interested. Sites like Bidingo, MERX. Agency vendor database and distribution list. Direct mail to identified service contractors. Despite our best efforts, my experience is that the best publication strategy for an RFP and especially a bid for equipment is a phone call to those likely to propose. State Public Transportation Association Listserv. RFP is sent directly to potential vendors. Agency’s e-Bid program. Planet Bids is the website we contract with to publish all procurements.

Transit Agency Survey Results 111 17. How are proposals evaluated? Please indicate the relative weight given to each component. Evaluation criteria Weight 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%+ Experience and references 3.9% 11.5% 11.5% 19.2% 11.5% 7.7% 7.7% 15.4% 0% 15.4% Thoroughness of implementation plan 10.5% 21.1% 0% 21.1% 21.1% 5.3% 15.8% 0% 0% 5.3% Technical capacity of contractor 0% 4.6% 13.6% 18.2% 13.6% 13.6% 9.1% 4.6% 4.6% 13.6% Financial capacity of contractor 14.3% 7.1% 21.4% 21.4% 21.4% 7.1% 7.7% 7.7% 15.4% 3.9% Price 0% 3.8% 11.5% 15.4% 26.9% 11.5% 7.7% 15.4% 3.9% 3.9% DBE participation 45.5% 45.5% 9.1% 0% 0% 0% 0% 0% 0% 0% Other 11.1% 33.3% 11.1% 0% 0% 0% 0% 0% 0% 44.4% Comments include: We did not give weights with this most recent proposal review. However the areas of evalu- ation were: Technical Design; Technical Approach; Financial Capacity; Length of Delivery Schedules, Quality of Personnel proposed; Past Performance and Management Plan. We also asked the proposers of their DBE plans (we were looking for good faith effort). Given the last issues with DBE, we listed examples of the areas which we would allow DBE and they included janitorial services, customer service, uniforms, vehicle cleaning and detailing, etc. Our evaluation factors do not receive a specific weight. Here is an excerpt from our most recent RFP for fixed route services: The evaluation factors listed below are in descending order of importance. All proposals shall be evaluated and ranked on the basis of the follow- ing factors: 1. The Management Competence and Staffing Plan. 2. Quality of Maintenance Work. 3. Quality of Service Delivery and Safety Plan. 4. Quality of Training Plans and other required submittals. 5. Start-up and Mobilization Approach. 6. Capability, Experience and Past Performance of the Firm Price. Price shall be evaluated but not scored. A cost analysis team that is separate from the technical evaluation team will evaluate this factor. This team will evaluate the cost proposal to determine price fair. Local Project Team Management & Tech Competence 15% Proposer Approach 15% Cor- porate Experience or Past Performance 13.5% Quality of Maintenance Plans 10.5% Quality of Staffing & Training Plans 9% Quality of Other Plans 6% Financial Viability 6% Price 25%. Financial Capacity and References were on a “Pass/Fail” basis. Organization and Management 40%. Quality of proposal, qualifications of proposer, and related experience are worth approxi- mately 50% and financial (price) is worth approximately 50%. The Evaluation Panel considers the trade-off between proposal price and the other evaluation criteria in determining the proposal which is most advantageous to the agency. Price is not limited to hourly rate or total contract price only, but also includes an analysis of certain components of the price (such as amount specified for driver wages, driver benefits, etc.). Tech capacity covers thoroughness of plan & financial capacity. I get why they are separate, but those are disqualifiers anyway. Qualifications and Experience—15% Staffing Plan and Organization—25% Operating Methodology—15% Professional References—10% Proposed Costs—35%.

112 Contracting Fixed-Route Bus Transit Service Price is evaluated separately from the technical proposal. There was also the optional inter- view (optional to the one running the procurement) that could gather bonus points. Innovation—ability to embrace, support, and use our wide array of transit IT tech toys and software. Experience is focused on the proposed local staff and regional support, we don’t care who their top people are on the other side of the country, but rather we care about who OUR LOCAL manager will be. Approach to Scope of Work—40% Transition and start up plan 5%. Performance statistics—15%. Work plans and all related information and documentation—35% Proposer’s Experience and References—25% Management Team, Organizational Structure and DBE Compliance—20% Price Proposal—20%. The most recent RFP issued by the agency (2012–2013) was a two-step process; step 1 quali- fications, step 2 qualifications and price. Qualifications 30% Pricing 70%. Safety Program and Safety Record Employee Benefits. Technical 20% Financial 30% Organization & Management 50% Our evaluation system is much more detailed than the breakout above. We have 30% weighted on the Proposed Staff and Organization (local management team, corporate support, local non-management staff, implementation plan, consultants/subcontractors, employee development and retention plans, and labor history). We have 20% weighted on Operations & Maintenance (Scope of service summary, facility, support vehicles, recruitment and training, safety & security, customer service training, uniforms & appearance, reporting requirements compliance, fare collection procedures, drug & alcohol program, service disruptions/vehicle breakdown plan, Preventative Maintenance program, HVAC program, and vehicle cleaning program). 20%—Experience of assigned personnel (as opposed to experience of company) 10%— Compliance with Labor Code 1072 (this is a State requirement). Proposal format is 5%. Financial capacity is required as part of responsibility determination and is pass/fail. Creativity. Safety Plans and Procedures are usually worth 20%–25% as well. 18. Did your agency develop an Independent Government Estimate (IGE) of the expected cost of the contract? Yes 19 51.4% No 13 35.1% Unsure 5 13.5% 19. Briefly describe how your agency developed its IGE. Finance department has a cost model it uses Took the existing cost of people performing the work, and added in other reasonable business expenses, plus OH&P. Historical information of previous contracts and the level of service to be performed. Calculated on historical unit cost with market adjustment

Transit Agency Survey Results 113 IGE, or ICE? For our ICE we polled the State PTA Listserv, and called various agencies on each proposer’s list to see what their cost ranges were. That was in 2009—rudimentary. I guesstimated the unit prices by category. Next time, will be more thorough. Reviewed previous procurements. We call it an ICE. Independent Cost Estimate. Since we had an existing fixed route contract in place while developing the new SOW for the new contract, we used existing rates as a founda- tion and then added standard CPI increases to estimate year over year increases and contract life costs. We develop the IGE based on actual costs and surveys with other transit agencies. We considered the previous cost of the contract and inflation rates. Took our current pricing and added expected labor cost increases Our last procurement was a joint one with a state agency they developed the ICE for both entities. Talked to other transit operators and got their cost. Survey of comparative costs and requirements. Identified features and function paid by the system in a blended hourly rate and then asked for enhancements; compared proposed costs against old rate vs. enhancements. When replacing an expiring contract, we inflate the existing hourly rate. We also factor in the rates we pay for the other service contracts we administer. Assumed a 5% increase to the current rates. Although 0.8% was the CPI increase for May, 2015, this is the first RFP in 5 years so there was no guarantee that the Proposals would follow the CPI rates. Used pricing from current operations contract and adjusted for inflation over life of contract Looked at existing rates on expiring contract and other similar contracts. Accounted for some inflation in price and adjusted for any significant changes to the scope of work. Our IGE was developed based on the past year’s maintenance costs and also the range of oper- ating costs given the factors we were adding/excluding from the new contract related to opera- tions. Our past maintenance was performed by the County’s fleet maintenance department and this was the first time in 10 years that maintenance was going out for bid. 20. Has your agency ever experienced issues with the realism of cost proposals for contracting bus service (i.e., unrealistically low bids)? Yes 15 40.5% No 20 54.1% Unsure 2 5.4% 21. Please describe how your agency addressed issues with the realism of cost proposals. The current contract (due to expire on January 31, 2017) was based on a low bid by the pro- vider and towards the end of the contract the provider wanted to negotiate increases in trip rates due for paratransit services due to a reduction in trips as a result of Medicaid Reform. Although this was not a part of the fixed route quotes, it spoke to an overall low bid (it was higher than

114 Contracting Fixed-Route Bus Transit Service other proposers at the time) and this later impacted the quality and number of staff on the con- tract as the vendor never fully staffed the contract as it proposed. We dedicate most (if not all) of a day during oral interviews to discuss price proposals. We review line-by-line detail of how the cost was calculated and comment on areas that seem unre- alistic (either too low or too high). We commonly ask something like, how will you get X done with that little money? Developed reasoning to explain the difference. Cost proposals include specific line items, so we analyze the amount budgeted to each line to ensure contractor understands the scope of work. Too little budgeted to maintenance or driver wages may result in a poor evaluation or determination of non-responsibility. We engage the services of an external price realism consultant in order to ensure that the proposer has proposed reasonable staffing and other resource provisioning. During the BAFO process we ask for clarification on any pricing issues of concern. It was a very difficult 3 years. We require detailed cost breakouts in the RFP cost proposal, we ask lots of questions if num- bers don’t seem correct Requested clarification Did not renew contract re-solicited Evaluated Proposal and brought vendor in for interview to justify rates in proposal. Use Best Value procurement method to allow for combination of cost and technical score. Also don’t just give best cost score to low bid, but look at bid quality/realism. We addressed any questions during the Best & Final Offer process Actually, I have encountered that while employed elsewhere. A couple of bids here were a little low on maintenance (not bad)—but maintenance is usually where I see underpricing. Splitting out costs rather than asking for a rolled up price per hour is the tactic to avoid being rolled by too-good-to-be-true. We looked at what staffing, maintenance or operations corners we cut, which is one reason why we have certain requirements built into the RFP to try and control that. Moved from a “low bid” award to an RFP evaluative process when price is just one component of the overall rating 22. How many bids did you receive for your agency’s most recent fixed-route bus service contract? One 4 11.1% Two 6 16.7% Three 7 19.4% Four 6 16.7% More than four 13 36.1% 23. Has the number of bidders changed over the years? Yes, number of bidders has increased 15 41.7% Yes, number of bidders has decreased 7 19.4% No change 10 27.8% Unsure 3 8.3% This is the agency’s first contract 1 2.8%

Transit Agency Survey Results 115 24. Are the services provided under your most recent fixed-route bus service contract . . . Replacing services directly operated by our agency 1 2.7% Replacing or extending contracted services 28 75.7% New services 1 2.7% A combination of the above 7 18.9% 25. Has your agency received any protests in recent fixed-route bus service procurements? Yes 6 16.2% No 25 67.6% Not for the most recent procurement; unsure about past procurements 6 16.2% Contract/Operating Agreement Structure 26. What is the length in years of the initial term of award? One year 1 3.2% Two years 1 3.2% Three years 12 38.7% Four years 4 12.9% Five years 10 32.3% More than five years 3 9.7% 27. Does the contract have an option to extend the award? Yes 27 87.1% No 4 12.9% 28. How many years are included in the option? One year 2 6.3% Up to two years 11 34.4% Up to three years 7 21.9% Up to more than three years 12 37.5% 29. What is the payment basis for your agency’s current fixed-route contract? Check all that apply. Cost plus fixed fee 12 32.4% Revenue miles 4 10.8% Revenue hours 24 64.9% Passengers 1 2.7% Total vehicle miles 3 8.1% Total vehicle hours 3 8.1% Fuel costs reimbursed separately 7 18.9% Other (please specify) 16 43.2% Other includes: Both fuel and maintenance costs are “passed through” the contractor to our agency. All of the assets including buildings (owned or leased), vehicles and equipment remain as the responsibil- ity of our agency. Fixed cost plus variable cost based on revenue hours

116 Contracting Fixed-Route Bus Transit Service Rate per revenue hour with replacement costs, fuel, and some maintenance supplies paid directly by the agency. Training hours Two components—revenue hours for variable costs and then a monthly fixed fee to cover fixed costs. We use this structure on the two fixed route contracts operated by private entities. In our contract with the public agency we pay on revenue hours. A combination of fixed and variable rates based on vehicle service hours Reimbursement for safety bonus and performance bond. Monthly fee for dispatch services. Monthly fee for management services. Penalties. Plus, an hourly cost for maintaining bus stops, transit centers and a direct cost for major engine overhauls on fleet—pass-through. Fixed monthly fee Maintenance Some expenses are pass through with no mark up in cost Contract includes a fuel cost hedge based on a base rate, so this clause can benefit either the contractor or agency depending on fuel prices. Fixed fee Fixed fee and revenue miles and revenue hours. We pay for fuel CNG for CNG buses and electricity costs for electric buses Variable costs are billed based on a cost per hour, fixed costs are billed as a monthly fixed fee. Fixed route is based on revenue hours; paratransit is based on per trip fee. 30. How does your agency handle fare revenues under the current contract? Fare revenues given to agency 28 75.7% Fare revenues kept by contractor 1 2.7% Direct offset to cost 2 5.4% Other (please specify) 6 16.2% Other includes: We are a fareless system System is free to ride Cash currently kept by contractor. Pass revenue kept by agency. Future cashless system is expected with next fare system, and all fare revenue is expected to be handled by agency. Fixed-route: Agency collects the revenue. These are County-owned buses & fareboxes. Para- transit: Contractor deducts the revenue from the bill. Contractor owns those vehicles. Fare revenues collected & deposited by contractor into contractor’s account, then deducted from invoice to agency for service Electronic fares (via a smartcard) & cash fares are collected directly by our agency. In one case, cash fares are collected via a local approved credit union under a vendor agreement.

Transit Agency Survey Results 117 31. Does the current contract include contractor performance provisions (incentives, penalties, or liquidated damages)? Yes 30 81.1% No 7 18.9% 32. What contractor performance provisions are included in this contract? Check all that apply. Performance incentives 14 46.7% Liquidated damages 20 66.7% Performance penalties, but not liquidated damages 12 40.0% Other (please specify) 2 6.7% Other includes: Note: we did not include penalties with this contract: In our experience, proposers include potential penalties in their proposed cost so it increases the contract cost. FYI, per FTA, the term is now “contract deductions.” 33. What are the percentage or dollar amounts of the incentives or penalties? The percentage/dollar amounts are very low for the current contract. The new contract (scheduled to be approved by the Board tomorrow, Jan. 24, 2017) includes significant penal- ties such as hourly fixed route rate for late or missed trips or $500 for non-reported incidents/ accidents within 24 hours, etc. Incentive/disincentive is based on agency key performance indicators (accidents, road calls, on-time performance, complaints). Penalties can be up to 2% of the invoice. Incentive can be up to 1% of the invoice. We also have “performance deficiency credits” (PDCs) for failing to do specific things. Examples include late PM inspections, improper uniform, late pullouts, etc. PDCs range from $50 to $1,000 per occurrence. There are 6 performance standard categories in which contractors have an opportunity to earn an incentive. The incentive payments range from $1,500–$5,000 Liquidated Damages range from $100–$2,500 Liquidated Damages are $100, $200, $300, $500. We haven’t charged them yet. Issues abound. $100 for Running Red Light, and no ADA announcements Meet scheduled service incentive based on amount of scheduled service met $250–$750/month Operator overtime less than 6% $250/month Maintenance overtime less than 6% $250/month Meet agency-set vehicle maintenance budget line item $5,000/annually Actual service hours less than 99.10% $750 damages/month Operator overtime greater than 10% $250/month Mainte- nance overtime greater than 10% $250/month Vehicle maintenance budget line item 10% over adopted rate $2,000 damages/annually. Incentives ∼1.5% for parent company and 1.725% for contract employees assigned to our contract. It’s impossible to estimate percentage of penalties—theoretically, they could exceed the dollar value of the contract. The percentage has gone up with the new contact starting July 1, 2016. That is partially because technology is being leveraged to measure performance. However because that performance measure has been adjusted and the contractor is managing performance levels more proactively the service has improved greatly over the last 6 months. Because the amount of Liquidated

118 Contracting Fixed-Route Bus Transit Service Damages has increased greatly with the new contract, I have been slowly adding in new damages to be applied and I give the contractor a date in which the next damage we are going to focus on will be applied. There were a lot of performance issues when I got here, but applying damages in a progressive manner it meant the contractor could bring performance back into line in a reasonable manner. At the end of the day LD’s are not a “gotcha” tool they are really to ensure that customers are getting a baseline reasonable acceptable service level and that the contractor is doing what is expected in terms of the operations and maintenance of your service. Small stuff, $50 to $500 per occurrence for LDs, similar for incentive bonus No penalties up to 2% or the monthly contract can be earned in incentives. (They have been earning .75%) Varies, but around $3,000 per month Driver Incentives/Penalties—Penalties—Missed Trips 2 or more—$2,650 per event— Operator Complaints 25 or more per month—$1,500 per month Incentives—Missed trips 0 a month—$2,650—15 or fewer Operator Complaints—$100 per event maximum $1,500 They are negotiated Less than 1% Liquidated damages and performance incentives are less than 1% Penalties for missed trips due to driver/dispatch error of $250 each, not wearing uniform $50, preventable accidents minimum $500 and maximum $5,000. Twice the per-trip rate for dropped trips. Insignificant, really. Biggest incentive is $500/month if the PMs are done on time. Penalties are assessed after a letter is sent describing the problem and demanding a plan to rectify the problem within a time limit. If the problem recurs the next month, then the penalty would be assessed. I’ve only had to send one letter, and the problem was corrected. This approach does not increase costs. However, the standard approach (see the problem, ding the contractor) does, and that’s how I’ll respond to # 36. Variable Description of Violation Penalty (1) Early Trips $500 per occurrence (2) Late Trips (>10 minutes) $50 per occurrence (3) Missed Trips (>20 minutes) (cost of trip + $200) (4) More than 5 Verified Complaints per Month $50 per additional complaint (5) Failure to Submit Reports $50 per report (6) Falsification of Reports $1,000 (7) Heating or Air Conditioning Failure in Service $50 (8) Unsafe Operation of Vehicle $100 (9) Misuse of Marin Transit Vehicle $1,000 (10) Use of Cell Phone during Vehicle Operation $1,000 (11) Operator Discourtesy $50 (12) Operator not Wearing Seatbelt during Vehicle Operation $100 (13) Operators not Adequately Trained or Failing to Properly Operate Fareboxes or Destination signs $100 (14) Schedules or Complaint Cards not Available on Vehicles $50 (15) Rider Alerts/Posters not Posted on Vehi- cles $50 (16) Radio Communication Not Maintained $100 per occurrence after two warnings (17) ADA Related Operator Error, e.g., Failure to Announce Stops, Failure to properly secure wheelchair $50 (18) Failure to Complete Operator Daily Pre and Post Trip Inspection $100 (19) Negligence of Contractor Staff Resulting in Serious Injury to Passengers $500 Varies by performance measure Operations – Fixed Route and Route Deviation Performance Criteria Standard Incentives/ Damages Missed Trips No bus will operate behind schedule by more than ½ the headway, e.g., for a route that runs every half hour a missed trip will be any run that leaves its starting point

Transit Agency Survey Results 119 more than 15 minutes late Damages = $100 per missed trip. In addition, payment for vehicle hours corresponding to all missed trips will be deducted from the monthly invoice. On-time Departures Buses will depart from all designated time points no later than five minutes after their scheduled time. Damages = $1,500 if on time performance is at or below 89% on aver- age for the month. Late Yard Pull Out All buses will leave the yard at the designated time. Damages = $100 per late yard pull out. Trips Operated Ahead of Schedule No bus will leave any time point prior to its scheduled departure time. Damages = $50 per incident. Late Route Devia- tion Pickups Passengers who have reserved trips will be picked up no more than 20 minutes after the promised time. Incentive = $1,500 per month if 98% or more of pickups are on time. Damages = $1,500 per month if less than 92% of pickups are on time. Deviation denial A mini- mum of two deviations will be made available per trip. Damages = $50 per deviation not pro- vided within guidelines. Missed Route Deviation Passenger Trips All scheduled passenger trips will be served unless cancelled by the customer. A trip is considered missed if the bus is more than 20 minutes late and the passenger cancels or does not show for the trip. Damages = $50 per missed trip. Hold Times Calls for customer information, deviations, or DAR services will be answered either with no hold time or less than two minutes hold time. Incentive = $1,500 per month if 95% or more of calls are answered with less than two minutes hold time. Damages = $1,500 per month if less than 90% of calls are answered with less than two minutes hold time. Operations – Dial-a-Ride Late Pickups Passengers must be picked up no more than 20 minutes after the prom- ised time. Incentive = $1,500 per month if 98% or more of pickups are on time. Damages = $50 for each late pickup exceeding 8% each month. Missed Trips All scheduled passenger trips will be served unless cancelled by the customer. A trip is considered missed if the bus does not arrive or is more than 20 minutes late and the passenger cancels or does not show for the trip. Damages = $50 per missed trip. Operations – General Preventable Accidents 70,000 – 90,000 average in ser- vice miles between preventable accidents. The contract may be terminated for failure to operate a safe service (i.e., having an accident record higher than industry norms). Incentive = $1,500 per month if the average miles between preventable accidents exceed 90,000 total miles. Damages = $1,500 per month if the average miles between preventable accidents falls below 70,000 total miles. Customer Complaints The number of valid customer complaints will not exceed more than one complaint per 10,000 passengers. The agency will determine validity Incentive = $500 per month if less than one complaint per 10,000 riders during a month. Damages = $500 per month if complaints exceed one per 10,000 riders in the month. Staffing Vacancies No vacancy over 30 calendar days for any position included in the cost Proposal. A vacancy is defined as not having a person employed full time on-site in the position. Credit to monthly invoice for position’s salary and benefits Key Personnel Unauthorized substitution of key personnel. Damages = $10,000 per occurrence. Dress Code Compliance with uniform/dress code while operating a bus in revenue service. Damages = $25 per infraction. Road Supervision Road supervision must be available at all times a revenue vehicle is in operation. Road Supervisors will respond to any incident/accident within a maximum of 20 minutes of the call during revenue operating hours. Damages = $50 per occasion that a Road Supervisor does not respond within 20 minutes. Management Reports Provide RTD with reports as defined in the Scope of Work. Reports submitted more than 10 days after the due date will be subject to damages. Damages = $10 per day – first violation; $20 per day – second violation; $30 per day – third violation. $100 per day for additional violations. Cell Phones Operators are never to use a cell phone while operating a RTD-owned vehicle. Damages = $100 per documented occurrence. Main- tenance Vehicle Accessibility Lifts and securement equipment are fully operational on any revenue vehicle placed into service. Damages = $50 per infraction. Vehicle Appearance – Cleanliness Vehicles leaving the yard shall be cleaned as defined in the “Cleaning of Buses” section in the Scope of Work Damages = $50 per day, per vehicle, until vehicle is inspected and approved by agency staff. CHP Maintenance Facility Inspection Achieve a satisfac- tory rating in all categories in the CHP Safety Compliance Report. Damages = $10,000 for

120 Contracting Fixed-Route Bus Transit Service any less than satisfactory rating. CHP Revenue Vehicle Safety Inspection Achieve a satisfac- tory rating in all categories in the CHP Safety Compliance Report. Damages = $10,000 for any less than satisfactory rating. Vehicle Maintenance and Inspection Periodic maintenance and inspections shall be completed on or before the scheduled intervals (mileages, hours, and days) identified in the Scope of Work. Damages = $50 for any preventive maintenance or inspection not completed as required. Service Interruptions due to Road Calls The average combined revenue vehicle miles per mechanical road call is more than 15,000 miles. Incentive = $500.00 per month if the average miles between road calls exceed 15,000. Damages = $500.00 per month if the average miles between road calls falls below 15,000. Accident Repairs All vehicles and equipment used in this Contract with accident damage shall be repaired within 30 days of the accident. Damages = $50 for any infraction left uncorrected after 30 days. Vandalism Repairs All vehicles and equipment used in this Contract with vandalism damage shall be repaired within 30 days of the incident. Damages = $50 for any infraction left uncorrected after 1 days. Vehicle Availability Sufficient vehicles meeting all standards must be available for every scheduled pull- out. Damages = $100 per trip not operated or missed due to insufficient vehicle availability. (Applies only if maintenance contractor does not also perform operations.) Adherence to Proce- dures Follow agency recommended procedures. Damages = $100 for every occurrence found of not following agency recommended procedures. Care and Use of Agency Equipment Equip- ment must be properly maintained and appropriately used. Damages = $500 per incident of negligence, misuse, and/or abuse of agency equipment. Staffing No vacancy over 30 calendar days for any position included in the cost Proposal. A vacancy is defined as not having a per- son employed full time on-site in the position. Credit to monthly invoice for position’s salary and benefits. Damages = $50 per day per vacancy in required positions exceeding 30 days. Key Personnel Unauthorized substitution of key personnel. Damages = $10,000 per occurrence. Management Reports Provide RTD with reports as defined in the Scope of Work. Reports submitted more than 10 days after the due date will be subject to damages. Specific records must be provided as requested. Damages = $10 per day – first violation; $20 per day – second violation; $30 per day – third violation. $100 per day for additional violations. $100 per day for specific records request not completed within ten days. Down Vehicles – Average Number of Days Vehicles shall not be out of service for any maintenance issue for longer than five days except as specified otherwise in the Scope of Work. Incentive = $500 for average down vehicle days fewer than three in a month. Damages = $500 for average down vehicle days greater than six in a month. Maximum LDs assessed in first year is $500,000. Cap increases 3% each year. Liquidated damages are assessed daily based on service performed the previous day. The LDs range from $50 per incident to $200 per incident. LDs are also assessed quarterly based on performance measures for the quarter (5 difference measures). These LDs range between $10,000 and $15,000 per quarter. Incentives are calculated quarterly based on per- formance measures for the quarter (5 difference measures). The incentives are $5,000 per quarter. The performance penalty amounts are specific to the KPIs in each service contract (as well as confidential). However, we generally have not had to impose performance penalties. 34. In your agency’s experience, does inclusion of liquidated damages or performance penalties increase the cost of the proposals received? Yes 13 43.3% No 4 13.3% Unsure 13 43.3%

Transit Agency Survey Results 121 35. Has your agency ever assessed liquidated damages under the current contract? Yes, more than three times 15 50.0% Yes, three times or fewer 1 3.3% No 14 46.7% Unsure 0 0.0% 36. Who provides the buses under this contract? Transit agency 36 97.3% Contractor 0 0.0% Transit agency but contractor provides emergency spares 1 2.7% Other 0 0.0% 37. What equipment/facilities are provided by the contractor? Check all that apply Non-revenue/support vehicles 26 70.3% Bus storage facilities 15 40.5% Bus maintenance facilities 16 43.2% Bus maintenance equipment 16 43.2% Scheduling software 10 27.0% None – all provided by transit agency 7 18.9% Other 4 10.8% Transition Issues 38. Has your agency changed contractors within the past three years? Yes 8 21.6% No 29 78.4% 39. Please characterize the transition. Smooth transition – no issues 1 11.1% Acceptable transition – a few minor problems easily resolved 6 66.7% Difficult transition – major problems and/or many minor problems 2 22.2% 40. What were the nature of the transition problems? Check all that apply Labor 3 42.9% Equipment 3 42.9% Facility 1 14.3% Pensions 0 0.0% Other financial 1 14.3% Retention of records 2 28.6% General lack of cooperation between old and new contractor 3 42.9% Other (please specify) 1 14.3 Other includes: The transition to this new contractor has been challenging as the current provider has not provided all necessary documents in advance of the transition. This has delayed the awarded vendor’s efforts to re-hire, screen current operators.

122 Contracting Fixed-Route Bus Transit Service 41. Please describe the most serious transition problem and how it was resolved. Transferring of insurance documents due to the leasing agreement already in place and the 3rd party insurance company The cooperation between the two corporate entities was not smooth. Local folks were often charged with being the “man in the middle.” Agency often had to get in the middle to handle. Acquisition and training of new employees, most of which were formerly employed by the previous contractor. Outgoing vendor may skimp on vehicle maintenance once they know they are not awarded new contract. New vendor always says outgoing vendor did poor maintenance and wants to be held harmless for vehicle issues. In the past few transitions we hired an inspector to conduct a DOT-style inspection to identify all issues that went beyond normal wear and tear. We then hold the outgoing contractor responsible for repairing the vehicles before transition. The inspector then conducts a follow-up to ensure issues have been resolved. Ensuring clarity on acceptable fleet, facility, and equipment condition at turnover. Must be clear in contract documents (for contract closeout and contract startup). Employee/labor transition was the most public (employees came to board meetings to speak out), but vehicle transition was the most painful. Eventually met with attorneys from both sides to settle the amount owed for outstanding maintenance with the outgoing contractor. Still in the transition process . . . TBD Labor Issues 42. Has your agency experienced any labor issues related to contracting? Yes 14 37.8% No 21 56.8% Unsure 2 5.4% 43. Please describe the nature of the labor issues. Check all that apply. Continuity of employment 6 42.9% Employees right of first refusal 0 0.0% Wage levels 7 50.0% Benefit levels 6 42.9% Pensions 3 21.4% Collective bargaining agreements 10 71.4% Work requirements (length of shifts, work hours, etc.) 2 14.3% Other (please specify) 2 14.3% Other includes: Current operators have not received clear direction from the current prime vendor of the continu- ity of benefits, the end of the contract date and the expected transition period and related activities. Several years ago, some employees conducted a wildcat strike on behalf of a fired supervisor. 44. Please describe the most serious labor issue and how it was resolved. Drivers and mechanics at one of our service contractors (a municipal operator) went on strike last year after failing to reach a new collective bargaining agreement. This contractor sup- plies nearly all of our transit service in that municipality—however, because those routes are

Transit Agency Survey Results 123 primarily branded as our services, many customers did not understand and either went to wait for the bus anyway (which never showed up) or thought the strike was our fault. Because the bargaining agreement is between the municipal operator and its employees, we did not have a role in resolving the labor issue. Employee retention. If agency recruits contractor’s employee, contractor receives monetary reimbursement for training employee. Difficulty to attract and retain qualified staff Some returned to work and the rest were fired and replaced. The NLRB upheld the position of the contractor. The labor issues are connected to the contractors’ employees, splitting the service and the threat of a work stoppage. The labor issue was resolved by the contractor and their employees through a new CBA. Threatened strike five years ago. Agency worked with contractor to have backup operators in place. Lousy private sector benefits. There is no resolution unless we have enough funding to man- date a certain premium level of benefit comparable to the public sector Current most problematic issue is being able to call out without advance notice with little, if any, consequence, per collective bargaining agreement. Threatened strike, more talk than action, 3 year CBA eventually settled CBA not renewed yet, and not resolved yet We are including a minimum hourly wage clause in the scope of work for the first time. Due to low wages the Drivers and Dispatch Unionized. Negotiation took more than a year and almost resulted in a strike Labor issues were the primary driver behind the push to contract out. When the 100% con- tracting was achieved, a difficult negotiation occurred surrounding the freezing of the public employee pension in which the employees had previously participated. TBD 45. Has your agency ever had to respond to a Section 13c complaint? Yes, in response to a formal 13c complaint 3 8.8% Yes, not to a formal complaint but in response to Section 13c issues raised during negotiations. 2 5.9% No 29 85.3% Oversight 46. Does your agency monitor contracted services? Yes 36 97.3% No 1 2.7% 47. Please check the areas that you monitor. Check all that apply. Workers comp and related administration costs 3 8.3% Liability costs and related administration costs 3 8.3% Maintenance 32 88.9%

124 Contracting Fixed-Route Bus Transit Service Depreciation of operating facilities 13 36.1% Accounts payable and payroll 5 13.9% Cash counting and farebox maintenance 26 72.2% Human resources and recruiting costs 1 2.8% Contract administration 27 75.0% Third party vehicle inspection 15 41.7% Internal audit 13 36.1% Driver training 19 52.8% Verification of NTD and other data 28 77.8% Street supervision 17 47.2% Dispatch 18 50.0% Background checks 11 30.6% Drug and alcohol testing 31 86.1% Operations department management 23 63.9% Operator training and safety 22 61.1% Other (please specify) 4 11.1% Other includes: DBE Accessibility—announcements, customer service to persons with disabilities, functioning lifts/ramps. Use “secret shopper” type program. Looking forward to the results of this study. We have a database of customer comments categorized by issue type. Vehicle complaints sent to the maintenance manager, Safety to the Safety Manager, Compliments to the GM, Operations to the Ops Mgr. I am cc’d on everything. We monitor resolution of all issues. The agency conducts on the road dispatching. The contractor conducts window dispatching. 48. Does your agency have a specific unit or specific staff members with the responsibility of monitoring the performance of fixed-route contracted services? Yes, a specific unit 10 27.8% Yes, specific staff members but not a specific unit 22 66.1% No 4 11.1% 49. How many agency employees (in full-time equivalents) are involved in contractor oversight? 1 from operating agency, 1–2 from parent agency 5 15 5 3 3 14 for the fixed-route service contract One employee is dedicated to contractor operations. Other employees are involved in over- sight of contract terms and contractor invoices. 2 4

Transit Agency Survey Results 125 1 Less than 1 FTE 0.3 1 4 4 41 FTEs 3 1 3 FTE 3 2 All 2.25 of us! We have introduced AVL/CAD and Paratransit Scheduling Software that greatly enhances the ability of our micro-staff to monitor contractor performance, but it’s still an issue. ∼6 2 2 3 FTEs for fixed route monitoring, but many areas of the agency as a whole assist informally. 1 2 8 12 FTEs for bus and paratransit contracts are SOLELY dedicated to contract oversight. Another 6 or so are regularly involved in some fashion. 0. All five of the Transit staff perform some type of oversight of the contractors and their staffs/ subcontractor’s performance throughout our daily operations. 50. How frequently does your agency communicate with your contractor? Daily 28 77.8% Several days a week 5 13.9% Weekly 0 0.0% Two or three times a month 2 5.6% Monthly 0 0.0% Other (please specify) 1 2.8% Other: Hourly if necessary—we are in the same facility 51. How would you rate the quality of communication with the contractor? Very good 15 41.7% Good 16 44.4% Fair 3 8.3%

126 Contracting Fixed-Route Bus Transit Service Poor 1 2.8% Very poor 0 0.0% Multiple contractors; depends on the contractor 1 2.8% 52. Who has responsibility for collecting operating data, including NTD data? Contractor 14 40.0% Transit agency 13 37.1% Other (please specify) 8 22.9% Other includes: They provide some manpower but we oversee the data processing Both, depends on the data We share responsibility for NTD data Mixture—County does financial, a consortium does passenger miles through a contract with a consultant Scheduled hours and miles are entered into a Transit Agency web portal and contractor is required to enter any deviations from schedule directly into the same website. Contractor also enters roadcall, customer contact and accident information into the web portal. Transit agency works with raw data to prepare NTD reporting. Both, but primarily the agency The agency works closely with the contractor to ensure the necessary data is collected. It is a shared responsibility. Both. The Contractor and the Agency both collect different sets of data used for NTD submission. 53. How often is operating/NTD data reported for contracted services? Daily 7 20.0% Weekly 0 0.0% Monthly 23 65.7% Annually 4 11.4% Other (please specify) 1 2.9% Other: As required by the FTA 54. Is the operating/NTD data publicly available? Yes 19 52.8% Some is, some is not 11 30.6% No 6 16.7% 55. Please describe the type of data that is publicly available. We publish a Transit Service Performance Review every year that reports metrics such as boardings, passenger loads, on-time performance, bus bunching, speed, and service costs for each of our routes (directly operated and contract) based primarily on APC and GPS data. How- ever, the data quality varies. Some of our contract services are operated with vehicles (owned by us) that do not have APCs, and GPS was only installed recently, because those contractors are in remote areas (e.g., an island) and those components are difficult to service

Transit Agency Survey Results 127 Whatever is published to NTD. Ridership, on-time performance, services hours, passenger miles NTD reports Monthly reports are given to our Board of Directors showing passengers, revenue hours and miles. This information is available on the transit agency’s website. NTD Unlinked passenger trips Data published in the annual report Any data gathered as part of service delivery that is not specifically protected can be requested by the public (State Data Practices Act). Ridership is the only data that we report to our board and the public. Monthly ridership is reported at the MPO meetings in monthly reports. As a public agency all data is available upon requests. (public knowledge) 56. How is the data made available to the public? Check all that apply. Periodic posting of performance reports on the agency website 6 20.0% Printed reports that are available to anyone on request 5 16.7% In response to information requests under local public records law 21 70.0% Other (please specify) 12 40.0% Other includes: Monthly ridership reports provided to the MPO Operating statistics are provided in monthly reports to our board of directors. Planning documents Public presentation to the board. NTD website CUTA Canadian Transit Fact Book and reports to Council Agenda packets for board available to the public online NTD website Monthly board packet Reports issued by NTD NTD website Contractor NTD data is combined with the agency NTD data. 57. Are there issues with fixed-route service integration (either between directly operated and contracted service or between different contractors)? A single contractor operates all of our fixed-route service 18 51.4% Yes, there are ongoing issues 3 8.6% Yes, there are occasional issues 4 11.4% No 10 28.6%

128 Contracting Fixed-Route Bus Transit Service 58. How does your agency resolve disputes with its contractor? Check all that apply Discussed and resolved at regular meetings 28 80.0% Discussed and resolved at ad hoc meetings addressing specific issues 23 65.7% Performance penalties/liquidated damages assessed 13 37.1% Other (please specify) 2 5.7% Other includes: Usually via email/phone. The previous response needs explanation. All fixed route services are with one contrac- tor. However, the County also pays the regional transit agency to provide bus services that go through the County. Occasionally, issues arise between their bus operators and ours. 59. How does your agency evaluate service performance for contracted fixed-route service? Check all that apply. Agency-wide performance standards 24 68.6% Performance standards for contracted service 21 60.0% Customer feedback via surveys 19 54.3% Customer feedback informally 25 71.4% Qualitatively 10 28.6% Other (please specify) 7 20.0% Other includes: Record reviews (training, hiring, maintenance, DOT hours), pull-out checks, vehicle inspec- tions, site visits, dispatch reports, maintenance reports Secret rider program, review of on-bus video, operations software reports, documented and verified customer complaints Customer Comments system accrues comments received via the website, through the call center and by emails. We have agency performance standards which were primarily developed for our direct- operated services. We have been adapting these to monitor contracted routes, which only as part of new contract in July will have some of the technologies (APC, AVL) that enable use of certain standards. Review of APC/AVL report data. We monitor AVL system daily to ensure service is operating on time. We also review camera footage randomly and in association with incidents and conduct periodic ride-alongs. We do have a formal customer comment process. 60. What is the most important issue regarding agency oversight and how is this addressed? Monthly reporting by contractor received in a timely manner is a common problem with the current contractor. One of the ongoing challenges we have had that prompted support for enter- ing into a new RFP for a new service provider. We are most sensitive to quality of vehicle maintenance, since we own the vehicle. We employ full time inspectors to monitor fleet and maintenance programs and utilize periodic third party assistance to inspect fleet. Ensuring service standards meet or exceed agency requirements. Solution is constant and consistent (scheduled and random) inspection of work.

Transit Agency Survey Results 129 Safety, which is addressed through direct communication with the contractor. Customer service. We discuss customer service at every meeting. Talk about examples. Getting a qualified staff member who understands the universal elements of transit Customer Service and OTP, constant communication. Compliance—through consistent monitoring Operator training. We observe operators within first week after being released and have incor- porated several technologies to supplement on-board evaluation. I would say as an agency we have been working over the last year to do a better job on over- sight. To work with the contractor to make sure the expectations are set of what we expect and an open process in terms of contract oversight. Again (I know I keep saying this) communication is important to this so that in the end the two work together to maintain good service for the customers on the street. I could use one FTE just to monitor the contractor all the time, but there is no money. Not sure what you are asking. . . . Quality of service, regular bi-weekly meetings with senior staff and daily interaction with mid- level staff. We are all in the same facility—makes communication much easier. Could use additional management staff to provide regular oversight, on site at our garages. Ensuring consistent contract compliance. Ensuring that the contractor is in compliance with the agreed upon terms and conditions of the contract. Acquisition of good NTD data. This is addressed through defined data collection method- ologies and constant communication with contractor when there are changes to the system. Detailed customer complaint process with resolution within established timeframe. Regular leadership team meetings. Co-location of agency and contractor. Know what service is running and how people are using it. Get CAD/AVL on buses and APCs. Lack of administrative staff time available for this purpose. We added staff in 2013, but we could use more. Safety is always the most important. Contractor investigates and applies progressive disci- pline, including retraining, as needed. Safety. Accidents are investigated and/or reviewed; unsafe actions are reported to the contrac- tor and monitored for compliance. For us the most important issue is not having a direct connection with operations. We address this by having AVL data so that we can see how the buses are performing on route, hiring a third party contractor to inspect our fleet to ensure good maintenance practices, having a web portal where contractors can enter data about service and having standing monthly meetings with our contractors to operations and issues. On-time performance. Running reports and analyzing and assessing causes (whether driver-caused) Ensuring that contracted employees are providing the level of service expected from our agency to ensure that directly operated and contracted services are provided to the customer as

130 Contracting Fixed-Route Bus Transit Service seamlessly as possible. This is accomplished through oversight of the contractor, communica- tion and review of the contractors OTP. Communication One of the challenges is receiving information in a timely manner. We address this issue at the weekly meeting. Safety and Federal reporting Just getting out into the system to perform oversight. Making sure the contractor is aware of what and how much oversight is being performed. Contract management responsibilities have been distributed across many separate depart- ments and even subsidiaries in our enterprise. In order to improve our oversight, we are in the process of centralizing contract management within one department. Regular monitoring 61. Is there any other information you would like to share that could benefit other transit systems that contract fixed-route service? Collect and report performance data on a regular basis, discuss this data with contractors on a regular basis, track trends and don’t let a problem go unresolved - address quickly. Once con- tractor performance deteriorates, it’s very difficult to get it back to an acceptable level. No No We find that the partnership model tends to be more effective with this type of service delivery. In 2006, our agency switched from a management contract approach to a service contract approach. We found it to be less expensive, better control over finances, more responsive to customers and the community, and more transparent. We may be unlike other agencies in that we have three fixed route contractors, a paratransit contractor and two yellow bus contractors. Having someone on your review team who was on the private contractor side is invalu- able. If I’d not had that experience, I would have missed and/or been unaware of any number of things. Just hope all my responses got recorded. Had a hiccup with Survey Monkey 1⁄3rd way thru. No FYI, most of this information relates to our new contract that starts in July for the next 4 + 2 years, since the RFP is fresh in my mind. We are also looking at other service contracting oppor- tunities, such as rail replacement shuttles due to construction, and contracting of new or current direct-operated routes. Ensuring the contractors’ local management team is qualified to deliver the contractual expec- tations and contract oversight begins at the start of the contract. Can’t think of anything at the moment. I spent many of my decades in the transit industry on the contractor side, so my understanding of that side of the business, I think, helps to create a more positive environment. This is the 3rd stop in the last 16 years all managing contracted out fixed route and paratransit services. I am sure there are other insights I can offer.

Transit Agency Survey Results 131 There are pros and cons to both models. I think an agency has to think about its goals and challenges and which model can best suit it. I could teach a course. When doing an RFP, try to minimize the built-in advantages that a particular bidder may have over other bidders. Oversight. Oversight. Oversight. And collaboration. I think we need to do more as an industry to link agency staff that deal with contracted services so they can support each other with best practices and lessons learned. Transit agencies should be clear, specific and unequivocal regarding the type of demonstrated skills and experience (years of experience) they would like their GM and Operations and Safety managers to have. The current contract has placed managers and GM’s with no transit experi- ence in leadership positions because our contract did not detail the specific experience required. 62. Would you be willing to participate further as a case example, involving a telephone inter- view going into further detail on your agency’s experience, if selected by the TCRP panel for this project? Yes 31 86.1% No 5 13.9%