Contracting for Bus and Demand-Responsive Transit Services A Survey of U.S. Practice and Experience: Special Report 258 (2001) / Chapter Skim
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4. Transit Service Contracting in the United States: Extent and Practice
4. Transit Service Contracting in the United States: Extent and Practice
Pages 61-97
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From page 61... ...
This chapter describes the survey and its coverage, and reviews those results that indicate the extent and practice of transit service contracting in the United States. Survey Design and Method ETA collects information on purchased transportation as part of the National Transit Database (NTD)
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From page 62... ...
about the length of the contract; basis of payment; treatment of fare revenues; use of performance incentives and penalties; and parties responsible for the provision of vehicles, facilities, and equipment. Respondents were also asked to describe each contractor whether publicly owned, private, or not-for-profit and to indicate whether the services provided in the contract had replaced a directly operated service, created a new service, or succeeded a previously contracted service.
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The survey respondents are comparable in composition to federal grant recipients as a whole. The 2S9 Part 1 respondents the focus of this chapterform a large and diverse group.
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a, ID ~~: v ~ In ~ cn Ed ~ .~ .
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66 | Contractingfor Bus and Demand-Responsive Transit Services ~ .
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From page 68... ...
According to the 1998 NTD, the 259 survey respondents as a group contract for a smaller proportion of their transit services than those systems not responding to the survey (see Table 4-29. This may be attributable to the fact that the survey respondents include most of the country's largest transit systems.
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From page 69... ...
About one-third of those that contract 57 of 156 do so for all their services (see Figure 4-59; the other 99 have contracts for only some of their services. Because information was requested on each agency's largest contracts only, the survey results do not reveal how much contracting takes place in individual systems relative to their total operations.
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38% F I G U R E ~ - 5 Percentage of Part 1 survey respondents that contract for all, some, and no transit services (total respondents = 2591. Taken together, the survey results and NTD data suggest that of the systems that contract for some service, most do so for more than 10 percent of total service, but relatively few do so for more than 2S percent (see Figure 4-69.
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HI Sepias gad No Settles Contend 40 gag 1 ~~_ ~ 22~ 12~ ~~_ 17~ 11 10 25~ of Vehide-~iles Contused f I G u R [ # - 6 Sham of tmnsk systems that Contras GIL some, and no services (as estma~d using Paw 1 sump rssubs augmented ~ NTD damp. Lame Systems 22 edium~ized Scams 29~ SmaII Scams 49~ F I G u R [ 4 - 7 Distribution of Par 1 survey [espondents that reposed cont[actng by am sag.
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From page 72... ...
No Services Contracted 1 to 10% Contracted 11 to 25% Contracted 26 to 99% Contracted All Services Contracted O Large Systems lo Medium-Sized Systems 1;] Small Systems o% 10% 20% 30% 40% 50% 60% Percentage of Total Systems in Each Size Category F I G U R E 4 - 8 Percentage of large, medium-sized, and small transit systems that contract for all, some, and none of their transit services (as estimated from Part 1 survey results augmented by 1998 NTD data)
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70% ns.; As EB Demand-Responsive Services , rim , row , ~ ~~ AGE ,~G~ Cod' G° G°~ :- ~0\0`:~"~o 90\0 All 0\O too ~ h`0 '`,o ~ At. GO ,xG~ ~0 ,4~G~ I' G°~" F I G U R E 4 - 1 0 Share of transit services contracted, by service type (as estimated from Part 1 survey results augmented by 1998 NTD data)
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From page 75... ...
They are more likely to contract than city and county agencies, only half of which reported having contracts (see Figure 4-111. However, when city and county agencies do contract, they are much more likely than state and regional transit agencies to do so for all 70% 60% 50% 40% 30% 20% 10% 0% All Services Contracted City and County Agencies a State and Regional Transit Agencies I Some or All Services Contracted F I G U R E 4 - 1 1 Proportion of Part 1 survey respondents that contract for all and for some or all services, by agency type.
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, they reveal much about how transit service contracts are structured and administered, such as their duration, methods of payment, and use of performance penalties and incentives. The contract data, combined with results from Part 2 of the survey, offer insights into the nature of transit service contracting relationships, particularly the importance of a clear and detailed contract that spells out the duties and responsibilities of the contracting parties.
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Only about one in five reported bus contracts are for periods of less than 3 years, compared with one in three demand-responsive contracts. As discussed later, the larger capital investment required for fixed-route bus service may explain this difference in contract duration.
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Transit Service Contracting in the United States: Extent and Practice | 81 to ~ _ 2 2 ~ 0 a)
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However, most transit agencies retain responsibility for determining passenger service eligibility under ADA. Public agencies may have a number of possible reasons for choosing to furnish transportation vehicles and related facilities, especially for large-bus service.
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Retention of fares by the contractor is rarely offered as an incentive for increasing service amounts and quality; very few reported contracts allow the contractor to keep fare revenues as an independent source of income. Nevertheless, more than two-thirds of reported contracts permit the contractor to retain fares as an offset to future payments.
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From page 86... ...
Table 4-10 shows that a majority of the contracts had at feast three bidders during the most recent bid period, yet one-quarter had a single bidder. The demand-responsive contracts tended to have fewer bids: 44 percent had fewer than 3 bids, as compared with 33 percent of bus contracts.
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Transit Service Contracting in the United States: Extent and Practice | 89 JO ~ ~ A, ~ 2 Q)
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Change in Bid Activity by Contract Age One would expect the number of bidders on a contract to vary somewhat with each successive bid cycle. Whether a pattern emerges and contracts tend to generate more or fewer bids as they go through additional bid cycles might provide some indication of the dynamics of competition over time.
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From page 92... ...
Figure 4-1S presents the number of contractor changes for 200 reported contracts, grouped according to the number of times the contracts have been rebid. As expected, those contracts that have been rebid only once or twice are most likely to have haci a single contractor: 57 percent of these contracts have hac3 only one contractor, and therefore have not experienced a change.
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l (b) F I G U R E 4 - 1 5 Percentage of reported contracts rebid at least once that have had contractor changes.
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City and county agencies are more likely than state and regional transit agencies to contract for all their transit services.
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F I G U R E 4 - 1 6 Percentage of rebid contracts that have experienced contractor changes: (a) by number of changes; (b)
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Transit agencies usually provide the vehicles and other major assets for bus service contracts. For demand-responsive contracts, there is a much greater likelihood that the contractor will either provide the vehicles or share this responsibility with the contracting agency.
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