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Draft Report

Procuring, Managing, and Evaluating the Performance of Contracted TMC Services

Several states have contracted different operations services for significant portions of their systems.  For example, Virginia has contracted services for 23% of its Interstate system, but cost savings have been difficult to verify.  Organizationally, outsourcing may be tied to increased workloads or decreased staff levels, leading to the need to fill specialty staff positions.  The need to outsource often has a strong tie to overcoming staffing constraints either in availability or specialty skillsets – something that is critical in a TMC, given the profusion of specialty services and advanced technologies.

Political influences on the decision to outsource are usually manifested in some legislative requirement or policy mandate to reduce public staff or operating budgets.  Outsourcing becomes the means to continue with the provision of services when required by legislative or executive mandates or when state resources are limited or reduced.  Florida was mandated to execute an employee reduction plan that resulted in privatization to cover activities that were eliminated.  South Carolina enacted specific legislation requiring the state to perform more activities with contracted forces.  

Often agency staffing levels do not increase, but work programs and responsibilities continue to increase from prior funding levels.  For example, the Transportation Equity Act for the 21st Century (TEA-21) took national appropriations level to $30B, 50% greater than prior funding levels, but most with a decline in public agency staffing levels, there has been a greater reliance on the private sector for project or program service delivery.  Legislative and executive officials developed greater expectations as states received more money, even if these dollars did not account for the addition of new employees.

Outsourcing may become an attractive option for expansion of services when a region has experienced a successful history of contracted services, facilitating the continuation of this practice.  Basic services can be provided in-house, but enhancements can be outsourced.  Agencies are often concerned with policy issues and may end up making the decision to outsource based on staff constraints or the need for specialty skills and equipment.  Rather than being an issue of cost, the consideration becomes one of how to most effectively spend the monies that are available.

Selecting the Right Contractor

This section provides guidance on the strategies that can be used for selecting the right contractor for providing TMC services.  It also discusses the use of oral presentations, evaluations of past performance, and other strategies that agencies can use in the selection process.  This section suggests potential evaluation criteria that agencies can use to assess a contractor’s ability to perform the services requested, including how such evaluation criteria need to be developed to reflect an agency’s mission statement and operational objectives.  It discusses strategies for “weighting” different (and sometimes competing) selection criteria and presents examples of both good and poor evaluation criteria.

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