Title
Regional Fare Collection System - Request for Award (Ordinance S-46453)
Description
Request City Council approval to authorize the City Manager, or his designee, to enter into an agreement with Vix Technology, Inc. to provide a new fare collection system for the region’s bus and light rail transit system, and to execute amendments to the agreement as necessary within the Council-approved expenditure authority provided below. This agreement addresses a planned capital improvement to replace the existing system which is proprietary in nature and has reached the end of its useful life. Further request to authorize the City Controller to disburse all funds related to this item. The total contract value with options and estimated sales tax is estimated at $61,228,625, and includes up to 16 years of system maintenance support from the vendor.
Report
Summary
The City of Phoenix Public Transit Department, Valley Metro/Regional Public Transit Authority and its transit partners operate under the Valley Metro name which is comprised of 16 regional cities and towns within Maricopa County. Likewise, the existing fare collection system is regional and used by agencies operating or funding transit service throughout the Phoenix metro area. Design and implementation of the current fare collection system began prior to 2005, and with considerable advances in technology, demand for new ways to purchase fares strengthens the need for a new fare collection system.
Following approval by the Phoenix City Council in June 2018, the Public Transit Department in a joint effort with Valley Metro issued a Request for Proposals (RFP) in January 2019 to solicit a new regional fare collection system. The project is focused heavily on the customer experience and the implementation of a non-proprietary system. The new system must provide a technology-friendly experience for the customer in addition to creating a more efficient and expandable system in the future. As outlined in the staff report at that time, the project objectives were determined primarily from the needs and shortcomings of the current system, regional workshop input, and public input over the years. Those objectives were as follows:
- Improve fare payment options for customers.
- Provide ability to offer stored value and mobile passes to provide flexibility for riders.
- Enable innovative fares, including fare capping and time- and location-based products.
- Explore new fare technologies, such as mobile ticketing and open architectures.
- Improve data collection and ridership/revenue reconciliation, and eliminate current manual processes.
- Provide the capability to more accurately correlate sales and usage data.
- Provide more accurate ridership data.
- Increase control over fare media distribution and reduced fare programs.
- Ensure eligibility for reduced fare purchases at point-of-sale.
- Reduce fare evasion or misuse.
- Reduce fare media costs where possible.
- Explore long-term alternatives with a phased project implementation schedule.
- Begin with core improvements and expand the system as needed.
- Require an open architecture to facilitate adding features, components and integration with third parties.
With the award of this contract and the implementation of the proposed improvements, transit riders will have a modern and easy-to-use fare system when utilizing transit throughout the region. At a minimum, the fare collection system will include the following new features:
- An account-based, reloadable smart card system.
- Open architecture mobile app that includes fare purchase and trip planning.
- On-board validators for the regional bus fleet and station validators for light rail.
- Touchscreen ticket vending machines (TVMs) throughout the region.
The initial improvements under this agreement will be implemented in advance of additional steps to modernize other aspects of the regional fare collection system. Future fare collection-related RFPs from the City of Phoenix or Valley Metro will include a retail fare media network and potentially new on-board (bus) fare boxes.
Procurement Information
The City of Phoenix, Valley Metro and regional transit partners worked together on the issuance of the RFP. The Public Transit Department has led the procurement of a new fare collection system, with the scope of work and specifications developed through regional collaboration. The RFP was issued with a plan to implement the project in two initial phases in order to introduce improvements in a cost-effective, efficient and customer-friendly manner. A second RFP may be issued at a later date for Phase 3 if found to be necessary.
Phase 1
Mobile Ticketing with Validators: A mobile app will be developed and be available to transit customers, with validation at rail stations and on buses using validators capable of reading barcodes from the mobile ticketing app.
Phase 2
Smartcard Ticket Vending Machine (TVM) and Retail Network: Smartcards will be made available to the general public, including reduced fare customers, for the purchase of fare products. Account reload will be available through new TVMs, a retail network, and a website.
Phase 3 (If necessary)
Farebox Upgrade: Depending on the regional consensus and existing farebox life span, a second RFP may be issued later for the purchase and installation of new fareboxes. New fareboxes may ultimately be utilized for cash purchases of single rides only, as mobile ticketing and smartcards will become the dominant methods to purchase fares.
The Public Transit Department issued RFP PTD19-002 in accordance with City and Federal Transit Administration (FTA) procurement regulations. Six proposals were received from the following firms:
- INIT Innovations in Transportation, Inc.
- Kapsch Public TransportCom, North America, Inc.
- Parkeon, Inc. dba Flowbird
- Scheidt & Bachmann USA, Inc.
- SPX Corporation dba Genfare
- Vix Technology
An evaluation committee made up of qualified regional transit staff was appointed to conduct detailed evaluations of the proposals, establish a competitive range, and recommend a proposer for award of the contract. The evaluators were supported by an advisory team of technical experts who provided insight into aspects of the RFP’s scope of work and technical specifications. Both the evaluation and technical committees included staff with transit backgrounds from the City of Phoenix, Valley Metro and the City of Tempe.
The proposals were evaluated on the following criteria (1,000 points possible):
- Qualifications of the firm and staff (350 points)
- Technical solution and project approach (450 points)
- Cost (200 points)
After a thorough review of the proposals and multiple discussions, the evaluation committee determined the two highest-scored proposers (INIT and Vix) were within the competitive range. Those determined not to be in the competitive range were not considered further in the evaluation process and were notified of that determination.
Invitations to participate in Best and Final Offers (BAFOs) were sent to INIT and Vix. The invitations included questions and requests for clarification specific to each firm’s proposal. The invitation also requested their best pricing and an invitation to demonstrate their proposed products.
The committee evaluated the BAFOs based on the same requirements and criteria applicable to the initial review of proposals. Each company’s product demonstrations also took place, after which the BAFOs were scored and evaluations were finalized. As a result, the evaluation committee recommends award of the contract to Vix Technology, whose proposal received the highest technical score and highest overall score. The combination of the weighted technical and cost scores are as follows:
- Vix Technology (USA), Inc.: 914 points; $54,906,116 Base System Cost (No Options, excluding sales tax)
- INIT Innovations in Transportation, Inc.: 870 points; $53,173,011 Base System Cost (No Options, excluding sales tax)
In addition, the award recommendation includes options related to fare inspection devices, Ticket Vending Machine upgrades to take place during the equipment’s lifecycle, and future payment functions such as open payments (credit cards as fare media), or the ability to add cash to mobile tickets, to be incorporated into the project at the appropriate phase. These options may or may not be exercised during the contract term.
Contract Term
The agreement will begin on or about July 1, 2020, with an initial design-and-installation period of up to three years, a one-year initial warranty period, nine years of operations and maintenance support, and two optional extensions of up to three years each, for a maximum 19-year performance period.
Financial Impact
The total contract value with options and estimated sales tax is estimated at $61,228,625, and includes up to 16 years of system maintenance support from the vendor.
The initial capital aspects of the contract will be funded by Federal Transit Administration (FTA) and regional transportation tax (Proposition 400) funds. Annual maintenance costs, which will begin after system acceptance and a one-year warranty period, will be funded by regional (Proposition 400) and local funds from all agencies receiving and funding fixed route bus and light rail service in the region. The contract extends over 19 years as follows:
3 years: Base contract for designing, developing, hosting and installing the new fare collection components, including options.
- Maximum cost: $33,224,975
1 year: Warranty and hosting agreement (cost included in base).
15 years: Operations and maintenance support.
- Nine year base term
- Two optional three-year extensions
- Maximum cost: $28,003,650
The project will be funded as follows:
Base System Capital Cost, with options:
- 80 Percent - FTA
- 20 Percent - Regional funds (Proposition 400)
Concurrence/Previous Council Action
- This item was recommended for approval at the Citizens Transportation Commission (CTC) meeting on Feb. 27, 2020, by a vote of 12-0.
- This item was recommended for approval at the Transportation, Infrastructure and Innovation Subcommittee meeting on March 4, 2020, by a vote of 4-0.
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Public Transit Department.