UTS gets toll contract in Puerto Rico amid press & political controversy

United Toll Systems (UTS) has been awarded the big toll systems upgrade and 7-year operations contract by the Puerto Rico state toll authority Autoridad de Carreteras Y Transportacion (ACT) amid great controversy. UTS's bid was the high one in competition with InTrans, the established supplier and operator of cash and toll plaza systems and TransCore the electronic tolling vendor and operator of the local brand AutoExpreso.

ACT officials say that only UTS's proposal had a convincing solution to the losses from stealing, referenced under various euphemisms such as 'leakage' ('liqueo') and that for this reason alone it was the best value proposal.

Formally a "Cash Toll Collection System and Revenue Management System Services Contract" it provides for refitting equipment in 103 toll lanes on Puerto Rico's five tollroads, and a new system for handling and tracking money. The front end of the electronic toll system is quite new but is not integrated with other toll plaza operations and is being extended in stages by TransCore under a separate contract.

The vehicle classification system based on treadles has been neglected and is hardly functional we're told. It will be replaced by UTS loops.

However the decision is controversial on several grounds.

First, rather than choosing UTS as part of the procurement process in train, ACT cancelled the formal procurement and then almost immediately announced the award of a negotiated contract with UTS. They say this was done because all three bidders failed to meet the formal administrative requirements of their contracting process. TransCore and InTrans both say they have done the necessary certifications, lack of which was cited in the cancellation.

Second a leading local newspaper El Vocero is making a big play on UTS president Jim Allen and corruption in Alabama, painting UTS as an unethical company to do business with. (see discussion below)

Third El Vocero says UTS builds its own components rather than seeking them on the open market. UTS equipment is supposedly a "closed" system. In fact all three bidders manufacture important parts of their systems themselves and have patents, not just UTS, and in any case it is unclear what is wrong with the system integrator building its own gear.

Fourth UTS is more expensive in its operations bid - $9.75m/year against TransCore $6.62m and InTrans $3.19m. Overall prices were UTS $69.2m, TransCore $46.2m and InTrans $21.7m.

Fifth ACT is hit for failing to hire an international consultant to advise it on the technology issues. In fact eTrans of Atlanta GA run by veteran North American toll systems engineer Daryl Fleming has been working for ACT in Puerto Rico for several years and helped prepared the RFP for the toll system upgrade and operations. eTrans recused themselves from the final evaluation because of some work they had with two of the three bidders.

The Executive Director of ACT Luis Trinity Garay has been saying that UTS has the only system that can stop theft of what he says may be as much as $35m/year compared to $220m of tolls collected.

It is quite likely that TransCore at least will contest this claim, though a formal appeal is difficult given that the original procurement was canceled.

Corruption charge

On the corruption issue TOLLROADSnews is one of four sources cited by El Vocero as documenting this, the others being Associated Press, Outside the Beltway and Decatur Daily. Speaking for ourselves we didn't ever suggest UTS or Jim Allen did anything illegal.

We reported Oct 2005 that a 30 count racketeering indictment of former Alabama governor Don Siegelman (Dem, 1999 to 2003) and three associates said the Governor extorted money from Jim Allen, threatening to harm his business in the state unless he paid up. The extortion related not to UTS but to a pavement striping firm RainLine, in which Allen had a minority interest. It was a small part of a much larger federal case against Siegelman. Allen was not accused of any wrongdoing.

UTS opened three toll bridges in Alabama (subsequently sold) but the last of these opened before Siegelman became governor. Also they were not subject to state regulation so the governor had no leverage over UTS.

Allen said he was a victim of extortion by Gov Siegelman in connection with his share in the highway striping company which relied on state department of transportation contracts. Allen was asked by Siegelman for $100k and gave his political action committees $40k, the USDOJ alleged. This was under the Governor's threat to cut RainLine out of state work. After the contributions the Governor is said to have delegated to Allen the choice of his next secretary of transportation.

Many of the charges against the Siegelman including those in connection with RainLine and the broad racketeering charge were dismissed with Not Guilty verdicts by the jury in 2006. The Governor however was convicted of seven other counts of bribery, mail fraud and obstruction of justice. A judge sentenced him to seven years in jail and a $50k fine.

Just weeks ago Siegelman was released from jail while he appeals his conviction.

Allies including some in the media waged an extended campaign insisting on the innocence of Siegelman, claiming the indictments were political. The ogre Carl Rove was even invoked. Our opinion is that since Siegelman was a Democrat he had to be either stupid or crooked, or both, but perhaps some readers will detect a partisan bias there.

See http://www.tollroadsnews.com/node/1312

SPANISH: We got some of the Spanish language materials translated by on-line translators but these produce some hilarious and possibly misleading English so this is dicey reporting.

Here is a 21 page ACT explanation of the contract decision, mostly in Spanish, sent to the three bidders April 4:

http://www.tollroadsnews.com/sites/default/files/ACT0404.pdf

TOLLROADSnews 2008-04-09