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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5. Transit Contracting Experiences and Advice from General Managers
5. Transit Contracting Experiences and Advice from General Managers
Pages 98-127
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From page 98... ...
Ideally, the survey respondents would have included more individuals involved in and knowledgeable about transit service 98
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From page 99... ...
When the survey results can be disaggregated by these service types, however, they are presented this way. Furthermore, some of the questions asked the general managers to make judgments about closely related aspects of service, such as effects of contracting on operating costs and cost-efficiency, or on employee turnover and workforce retention.
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From page 100... ...
Given that the respondents varied widely in their knowledge of contracting and in their perspectives, the board members, public officials, and general managers interviewed were asked questions about the political aspects of contracting. Likewise, agency contract managers, union officials, and private contractors were asked about the details of the contracting program and its history.
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From page 101... ...
Reasons for Not Contracting General managers of systems that do not contract at all were asked to rate lO possible reasons for not contracting, including not regarding the practice as cost-effective, perceiving no reason to change current practice, and wishing to maintain control over operations. They were also asked to rate the Tack of quaTified firms, board direction, the influence of union contracts, insufficient number of bidders, bids that were too high, state labor laws, and the Tong-standing labor protection provisions in Section 13c of the Federal Transit Act (for a brief description of Section 13c, see Box 2-l in Chapter 2~.
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From page 102... ...
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From page 103... ...
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From page 104... ...
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From page 107... ...
This two-tier system was causing labor difficulties; hence in the next round of labor contract negotiations, the union and PAT decided to take another approach. They agreed that instead of contracting out, all new drivers would start at 65 percent of the top operators' wage rate, and the hiring wage progression was restructured.
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From page 108... ...
Contracting Experiences The survey focused mainly on contracting experiences, both positive and negative, as reported by general managers of transit systems that are now contracting. In addition, however, general managers of transit agencies that no longer contract were asked to report their experiences with contracting and their reasons for stopping.
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From page 111... ...
. The negative effects of contracting reported most frequently were limited control, poor service quality, and problems with customer service (see Table 5-5 and Figure 5-5~.
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From page 112... ...
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From page 114... ...
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From page 115... ...
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From page 116... ...
The most commonly monitored aspects are contract administration, national data reporting, and vehicle inspection and maintenance; each was reported by 3S percent of respondents. The general managers who currently contract and who reported negative effects of contracting were asked to describe the actions they have taken to mitigate those effects.
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From page 117... ...
In addition, general managers, including those that do not currently contract, were asked to answer the question, "If you had to do it all over again, and the choice were solely yours, would you contract for services now? " T A B L E 5 - 7 Reasons for Stopping Contracting, as Reported by General Managers of Systems That No Longer Contract for Transit Service Reason Percentage of Respondents Total Respondents Desire for local control Desire to improve service quality In-house cost savings Contractor issues Contractor opted out Escalating costs Few qualified contractors Internal changes Other 4 3 2 3 23.3 23.3 20.0 20.0 20.0 13.3 10.0 6.7 10.0 NOTE: Respondents included 30 general managers of transit systems that no longer contract.
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From page 118... ...
The most commonly cited reasons were contractor issues and poor service quality, each reported by nearly half of the respondents with partially met expectations (see Table 5-81. Not surprisingly, most of the general managers that reported having their expectations fully met were also the most likely to report large benefits from contracting.
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From page 119... ...
go 80 70 o Q 60 ~ 50 hi, 40 O 30 Q ~ 20 Be 10 O= Pi, Fully Met Partially Met Did Not Meet F I G U R E 5 - 6 Extent to which contracting has met expectations, as reported by general managers from systems that now contract, in response to survey Part 2. T A B L E 5 - 8 Reasons Contracting Outcomes Fell Below Expectations Reason Percentage of Respondents Total Respondents Contractor Issues 23 46.9 Service quality/customer service 23 46.9 Benefits not fully realized 13 26.5 Not enough control 6 12.2 Personnel issues 4 8.2 Too few bidders 3 6.1 NOTE: Respondents included 49 general managers of transit systems that currently contract.
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From page 120... ...
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From page 121... ...
Comparison of their responses with those of the currently contracting general managers might have been illuminating. Responses on Whether General Managers Would Contract Now, Given the Choice Responses to the final question of the survey—"If you had to do it all over again, and the choice were solely yours, would you contract for transit services now?
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From page 122... ...
122 | Contractingfor Bus and Demand-Responsive Transit Services T A B L E 5 - 1 0 Positive Effects of Contracting as Reported by General Managers with Fully Met or with Partially Met or Unmet Expectations from Contracting Percentage Respondents of Total Respondents Percentage of with Fully Respondents with Partially Total Respondents Met with Fully Met Met or Unmet with Partially Met or Effect Expectations Expectations Expectations Unmet Expectations Reduced operating costs 42 54.5 34 65.4 Reduced administration 20 26.0 15 28.8 Flexibility 18 23.4 11 21.2 Expertise of contractor 14 18.2 12 23.1 More service 19 24.7 4 7.7 Avoidance of capital costs 8 10.4 6 11.5 Contractor handles all 11 1 4.3 3 5.8 Competitive environment 6 7.8 4 7.7 Reduced hiring/ staff 3 3.9 6 11.5 Public image/ political 6 7.8 4 7.7 Onlywayto start ADA service 5 6.5 3 5.8 Total responding 77 100.0 52 100.0 NOTE: Respondents included 129 general managers of systems that currently contract. agencies that currently contract reported that they would do so now in light of their experiences.
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From page 124... ...
the need for attentive monitoring and T A B L E 5 - 1 1 Advice Offered by Contracting General Managers to General Managers Considering Contracting for the First Time Advice Outline specific duties/responsibilities Specify performance requirements Monitor contractor performance Scrutinize contractors beforehand Talk to other agencies Teamwork/communication with contractor Competitive procedure based on more than cost Combine rewards and penalties Have a clear mechanism for making changes Identify elements to contract re agency goals Specify wage rates/cost escalation Penalty clauses/liquidated damages Begin with internal cost analysis Provide vehicles/facility/maintenance/eligibility Be flexible Broad involvement in proposal process Contractor provides vehicle/fuel/routing Other Total responding No. of General Managers Offering Advice 54 47 38 24 23 20 19 18 14 14 13 12 12 10 10 10 5 18 117 Percentage of Total General Managers Offering Advice 46.2 40.2 32.5 20.5 19.7 17.1 16.2 15.4 12.0 12.0 11.1 10.3 10.3 8.5 8.5 8.5 4.3 15.4 1 00.0
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From page 125... ...
They urged a rational planning process that involves considering not only the budgetary impacts of contracting, but also the effects on service quality, workforce motivation and morale, and flexibility to respond to new and changing service demands. Several general managers noted the importance of consulting with other transit agencies that have significant contracting experience to obtain a better sense of likely effects in these areas.
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From page 126... ...
One of the general managers reported that his agency does not specify wage rates, but stipulates the use of current areawide rates in bid proposals and justification for Tower assumed wage levels. Overseeing and Working with the Contractor Monitoring of contract performance ranked third among all the areas of advice offered by the general managers.
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From page 127... ...
When a contractor was purchased by a larger company that asked to renegotiate the contract, the agency denied the request. A decline in service quality soon became apparent.
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