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The Intersection of Paratransit Service Delivery Models and Contractor Procurement

Description:

Approximately 80% of medium to large paratransit systems in the United States (US) use contractors for service delivery and often for call center or turnkey functions as well; moreover, most large systems use multiple contractors. The procurement process affects the success of all of these contractual relationships, including Request for Proposals (RFPs) and contract terms such as the payment structure, performance based incentives and penalties, the ability to shift work between contractors and/or to non-dedicated service providers, and the contract term. These must be crafted to reflect the particular service model employed, any planned changes to the service model, and/or changes to policies that are being introduced to address identified shortcomings.

Objective:

The objective of this research will be a guidebook for paratransit managers and transit agency procurement officers that will identify, for a comprehensive set of service models, the way various elements of the RFP and contract should be structured to enhance the likelihood of achieving certain results related to cost efficiency, service quality, or the balance of the two that will persist through the entire contract term. The guidebook will provide examples from the industry, including specific wording, of what to do and what not to do. The guidebook will also recommend more optimum procurement processes that have proven themselves in more accurate proposal assessments, contract negotiation, and cost avoidance.

Benefits:

The guidebook will provide examples from the industry, including specific wording, of what to do and what not to do. The guidebook will also recommend more optimum procurement processes that have proven themselves in more accurate proposal assessments, contract negotiation, and cost avoidance.

Related Research:

TCRP Synthesis 31, Paratransit Contracting and Service Delivery Methods, included a high-level review of a number of case studies, and concluded that a comprehensive national research study of public transit agencies’ paratransit contracting methods was needed. Sixteen years later, such a study is needed now more than ever with (1) the advent of new “hybrid” service models for ADA (and coordinated) paratransit that have developed since then; (2) new technologies and the growing use of non-dedicated service providers, in part spurred by TCRP Report 121 and the growing number of accessible taxicabs being used by transit agencies for ADA paratransit and non-ADA taxi subsidy programs; (3) the inadvertent – and in some cases unrecognized and unattributed – increase in paratransit cost due to the mis-design of RFPs and contracts; and (4) the tendency to reimburse the contractor on an overall rate rather than splitting the price structure among the major fixed and variable resource and activity cost drivers thereby increasing accountability and reducing risk of financial loss. TCRP Report 144, Sharing the Costs of Human Services Transportation, identifies which costs are fixed and which are variable.

http://pubsindex.trb.org/view/2006/C/777397 -

Legal Aspects Relevant to Outsourcing Transit Functions Not Traditionally Outsourced - http://pubsindex.trb.org/view/2011/M/1116100 - see pages 11/12 and 22/23

Tasks:

1. Literature review - to identify best practices in procurement and contracting

  1. Survey of transit agencies - to identify additional best practices in procurement and contracting, especially those that pertain to different service models not identified in Task 3. Prepare case studies of best practices in contract procurement and contracting that reflect the wide range of paratransit service models, focusing specifically on how those best practices achieved cost avoidance or the desired balance of cost efficiency and service quality. Any challenges the contracting entity was trying to solve, including the intended and unintended outcomes, should be highlighted. The geographic diversity of these case studies is less important; rather, the case studies as a set need to reflect the various service models used for ADA (and coordinated) paratransit systems, including (a) procuring one vs. two vs. multiple dedicated service contractors, with and without call center functions, and with zoned and unzoned service assignments; (b) procuring a centralized call and control center manager independent of the service contractors; (c) procuring non-dedicated service providers used for ADA paratransit service; (d) procuring non-dedicated service providers for non-ADA subsidy programs and (e) allocating costs to allow varying subsidy programs to rideshare clients or sequence the time that vehicles are used.

  2. Develop a guidebook that matches procurement and contracting techniques appropriate to different service models and to planned service design/policy modifications. The guidebook should cite for each referenced technique the advantages, possible disadvantages, and any other identified considerations for which the agency may need to account. Contract monitoring and compliance strategies should be included as part of this discussion.

5.Provide a simple formula enabling practitioners to assess the cost per ride, rides provided, and overall program expenditures before and the implementation of reformed procurement practices.

6.Provide a plan for disseminating the guidebook.

Implementation:

Approximately 80% of medium to large paratransit systems in the US use contractors for service delivery and often for call center or turnkey functions as well; moreover, most large systems use multiple contractors. In addition to procuring operational contractors, several larger transit agencies have now migrated to a service model that includes the hiring of a paratransit call center manager responsible for centralized reservations, scheduling, and in some cases dispatching and the use of non-dedicated service providers to supplement the dedicated fleet.

Relevance:

Those transit agencies seeking to fully avoid the adverse impacts on cost and to service quality that have resulted when RFPs and contracts include provisions that do not well match the service models, and do not request enough detailed information, ranging from information about detailed driver compensation packages to detailed line item costs.

Sponsoring Committee:AME50, Accessible Transportation and Mobility
Research Period:12 - 24 months
RNS Developer:Steve Yaffe, Paratransit Committee CRC
Source Info:A presentation on this issue was provided by Will Rodman at the Shaping the New Future of Paratransit: An International Conference on Demand Responsive Transit, October 2014 in Monterey, CA.
Date Posted:01/01/2015
Date Modified:07/07/2015
Index Terms:Paratransit services, Contractors, Procurement, Incentives, Penalties, Contract administration, Contracting out,
Cosponsoring Committees: 
Subjects    
Highways
Public Transportation
Administration and Management
Passenger Transportation
Law

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