The following is the fourth in a series of blogs on demand response transportation design and operations from guest blogger Steve Yaffe. This blog focuses on the stages of procuring technology for scheduling demand response transit.
Based on experience scheduling demand response transit manually and with software, pleased be assured that using technology is the better choice. Transit technology capabilities enable accurate scheduling, provide thorough service monitoring while red-flagging issues, and simplify accounting and reporting to funders. Efficient and effective scheduling and dispatch 
enable the transportation provider to stay within budget while maintaining the loyalty of funding agencies.
However, procuring a scheduling and dispatch system requires preparation and care. Kevin Chambers gave an excellent presentation for the National Center for Mobility Management (NCMM) on July 16, 2019, “A Jewel in the Rough: Articulating Your Vision for Technology in RFP Form”, which you can view at NCMM. Please view this webinar before embarking on procuring technology. You might use the remainder of this blog as a resource when developing a scope of services for a technology procurement. Another good resource that includes funding suggestions is NADTC’s Transportation Technology Information Brief.
1. Procurement Paths
Both Mr. Chambers’ webinar and this blog assume that transit technology will be procured through an RFP – Request for Proposals, rather than a bid process.
Bids are a good procurement vehicle when purchasing equipment or services for which the concept, design and functionality can be thoroughly described and will be satisfactory through the expected life of the product being obtained. Examples of items to be obtained through a bidding process include vehicles and furniture as well as cleaning or catering services. Offerors can’t be questioned during a bid process. Bids that meet the procurement specifications are evaluated by price, not functionality.
An Invitation to Bid is not appropriate to obtain transit technology, as transit technology is in a constant state of innovation. Equipment and operating systems are regularly being improved – and constantly becoming obsolete.
A Request for Proposals process should be focused on obtaining and maintaining functionality. Scheduling and dispatch technology (both hardware and software) must be integrated to maintain functionality. As parts fail or become obsolete and software systems are updated regularly to gain new capabilities, should transportation providers buy a static set of hardware or software that will quickly age? The alternative is the Software as a Service (SaaS) model, where the capabilities are bought through a subscription. The vendor is responsible for installing, maintaining, and updating the software and hardware and training the users. SaaS can also include training the user to update and replace software and hardware, as a cost reduction measure. Two necessary caveats to an SaaS agreement are: 1) the transportation provider must own the data; and 2) the data must be transferrable, should a new SaaS vendor be procured in the future.
2. Gathering Intel to Know What Functionality is Needed
Transportation providers using the RFP process can ask offerors questions for clarifications – and offerors are given the opportunity before submitting a proposal to ask transportation providers questions. This question and answer exchange is necessary to ensure that the product meets the intent of the RFP scope of services, which describes the functional requirements. Note that the question and answer exchange can occur over a few months and entail many questions from potential offerors, some of which likely will be redundant. This exchange can be curtailed with careful preparation, as Mr. Chambers noted in the webinar referenced above.
As mentioned in the webinar, attending trade shows associated with state and national transit conventions will provide a perspective of the products offered. One can network with users of those products attending the convention for their perspective. Vendors usually will share contact information for their customers on their websites or upon request. Vendors will also provide an on-line demonstration. The follow-up is to travel to sites similar to the size and scope of your agency to see the product being used. Seeing the dispatch and booking screens and talking with the users can be very enlightening. Asking for the local definition of On-Time Performance and then recent OTP data is a good indicator of functional performance. If the product has been in use for a few years, you can also consult the National Transit Database to check productivity – boardings per revenue hour (vehicle service hour) or per mile.
Once you find a transit technology application that appears to meet your needs, ask for the Scope of Services as well as RFP Price Sheet used to obtain the technology. Public sector procurement documents are generally public information. While RFP ‘boilerplate’ governing general contract terms will vary according to state and local procurement ordinances, the Scope of Services specifies the functionality sought in a particular procurement. The Price Sheet shows how the transportation provider pays for the functionality. Some cost categories may be fixed, such as an annual license fee. Other cost categories may be variable (cost per vehicle in the fleet) or based on steps (cost per fleet size over 50, over 100, etc.). A vendor may charge extra to respond to functionality issues (e.g., within one hour vs. 24 hours).
Alternatively, the procurement process can begin either with a Request for Qualifications (RFQ), a Request for Expressions of Interest (REOI), or both. A REOI is a tool “to test and refine the vision, mission and mandate of a project and to gain an understanding of the spatial and technical requirements for the project. A REOI provides a wonderful opportunity to communicate the preliminary ideas for a project to a relevant audience and solicit responses that help shape those ideas into a clearly-defined vision.” If a new functionality is sought that isn’t being offered elsewhere, a REOI is an appropriate method to discuss the idea without committing the responding vendor to respond to a RFP.
A RFQ (but not a REOI) is a screening tool used as the prerequisite to respond to a subsequent RFP. The RFQ process is best when the functionality is already in use somewhere. A RFQ could include a checklist of functionalities, showing for each functionality the years of experience offering the product; capacity to deliver within a specified time period and on-budget; and an example where each functionality is in use. Vendors who are, by their response, deemed qualified (as well as interested) would then be invited to respond to the RFP.
3. Gathering Intel to Know What Functionality is Affordable
Developing an Independent Cost Estimate (ICE) of the functionality to be procured is a best practice – and usually required if using public funds. An ICE can’t be supplied by a vendor – independent research is necessary. Reviewing price sheets from transportation providers that procured the desired functionality in conjunction with their first-year costs and current year costs will form the basis of a very solid ICE. Comparing first year and current year costs gives a good base for estimating cost hikes in future years. For budgeting purposes, a local decision-making process may require an ICE that covers a multi-year period.
However, estimating the cost for a new functionality is more difficult. The vendor offering that functionality should be asked for a referral to a customer who is using it. Brand new functionalities are more safely obtained using demonstration grant funding, probably in conjunction with a current vendor.
The next blog will discuss the components of an RFP. Your comments to these blogs are welcome – please email the author at yaffe@YMobility.info.
Steve Yaffe is an independent consultant and a contractor for the National Aging and Disability Transportation Center. He draws upon 40 years’ experience planning, procuring, overseeing and evaluating demand response and fixed route transit services, including 16 years with a consolidated human service transportation program. He has served on research panels and co-chaired the 2019 Transportation Research Board’s International Conference on Demand Responsive and Innovative Transportation Services.
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