CONTRACTING OUT:TCA moves to traditional model

It is seeking statements of qualifications from service providers preliminary to seeking contracts bids for:

(1) electronic tolling customer service center operations

(2) violation collections

(3) violation imaging

(4) systems operations

(Contact Mike Leahy Toll Ops TCA 714 513 3480)

Lockheed has subcontracted manual toll collection to PRWT, a local firm, and TCA intends to simply take over this subcontract for the duration of its term. TCA is negotiating purchase of equipment and rights to some of the software Lockheed has been using. TCA has been unhappy with the toll management system reporting functions and is having new systems devised.

Correspondence between Lockheed IMS’s CEO John Brophy and Walter Kreutzen TCA’s CEO indicate the differences go back a long way and that there may well be litigation over them. There are outstanding claims by both sides against the other, which are attempting to be negotiated as part of phase-out arrangements.

TCA says Lockheed’s performance in customer service, violation collections and financial reporting has been substandard. And Lockheed says it has not been properly compensated for its services, and has been losing substantial amounts of money. It says its pricing was based on TCA’s traffic forecasts. Traffic has fallen short of these – about 5% according to Wilbur Smith.

Others say the TCA-Lockheed contract with a simple per transaction fee was a major part of the problem.

TCA’s annual report suggests that it paid Lockheed $12.5m on toll collection last year under a heading “Operating management fee.” This was from $75m in toll revenues out of 55.4m toll transactions. If 5% violations occurred Lockheed was paid for about 58.1m total transactions or 21c/transaction.

Chutzpah

John Brophy CEO of Lockheed is not lacking in chutzpah. Having underpriced the job, alienated the client, and been asked to go, he says (letter to TCA May 22) that his company’s costs must be fully covered this calendar year and through the end of the relationship.

A guy gets notice. So he insists on a raise for his last weeks on the job. Gawdammit, why didn’t I think of that last time I got fired?