Highway officials gave contractor too much, IG says

Officials first focused on addressing congressional interests and minimizing the contractor's financial problems to avoid disrupting the program

The Federal Highway Administration lost control of a major traffic data program by giving the contractor too much control over significant aspects of it, according to a new report.

Despite FHWA’s management and oversight of the $54 million Transportation Technology Innovation and Demonstration (TTID) program, officials allowed the contractor, Traffic.com, to keep more of the revenue generated by the program than negotiated and give the government less access to the data.

Officials also failed to demand high-quality data from Traffic.com as required. The program thereby reduced the reliability of travel-time estimates and traffic operations, according to a report from the Transportation Department’s inspector general released Dec. 14.

TTID was conceived of as a partnership between the public and private sectors. The report states that the contractor was supposed to give the data to federal and state agencies to manage traffic congestion – for example, by locating and responding to traffic crashes and planning infrastructure projects for congested roads. The contractor was directed to install and operate technology that would collect traffic data from public roadways in exchange for the exclusive right to make money from the data – for example, by marketing on-air traffic reports. If revenue reached a certain threshold, the contractor would share the proceeds with the government, the report states.

However, FHWA didn’t get all the benefits because officials first focused on dealing with congressional interests and minimizing Traffic.com’s financial problems. The agency propped up Traffic.com to keep the company from going out of business to avoid disrupting the program, the report states.

“This is yet another good example to illustrate the careful balance inherent to successful public/private partnerships,” wrote Victor Mendez, FHWA’s administrator, in response to the IG’s report.

FHWA officials said lawmakers decided how the program would work. In 2001, the agency planned to have companies compete for an expanded program, but at least nine members of Congress wrote letters telling FHWA officials to take a faster procurement approach than a full-and-open competition, the report states. Furthermore, in a fiscal 2002 appropriations bill, lawmakers told the agency to use the same contractor under the same agreement.

“This is another example of the politics of contracting, where financial interests handcuff agencies as well as hurt the public,” said Scott Amey, general counsel at the Project on Government Oversight. “Agency acquiescence to the contractor has created a bottleneck preventing information from getting into the hands of cities and travelers.”

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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