9.  CONCLUSIONS AND LESSONS LEARNED

9.1 Introduction

This evaluation of the Central Puget Sound Regional Fare Coordination Project has sought to understand the range of institutional issues and challenges faced by the seven participating Partner Agencies, the regional management team, and the system vendor as they have worked together to create a seamless cross-jurisdictional fare card system for public transportation travelers in the region.  Data collection and the assessment process have been focused on the historical foundations for this project and the early efforts to complete an acceptable system design and configure the required hardware and software systems to support the project.  The viability of these systems in practice will only become fully understood after a beta testing period and the eventual implementation of the new systems throughout the region.  In this regard, this evaluation is limited to identifying a set of lessons learned in the developmental process that are expected to offer helpful insights to other agencies that may be interested in implementing their own fare card system.  While the physical, geographic, demographic, political, and institutional contexts that characterize the Central Puget Sound area, the partner agencies and their customer base will not likely be replicated elsewhere, it is expected that the lessons from this experience can be readily adapted to different conditions and settings.

9.2 Summary of Lessons

This evaluation has captured its main findings in a series of lessons learned.  There are of course many lessons that could be derived from the partners’ experiences to date, and many more will undoubtedly emerge in the future.  The lessons highlighted here seek to address the broad areas of project governance, the importance of understanding the context in which the project is being implemented, the factors that appear to motivate participation in a regional project like this one, and a number of key issues associated with project management, technology risk, project finance, and legal issues.  These are the big issues that can be expected to be faced in any regional fare card project anywhere in the country.  The important point is to view these lessons as a form of awareness building or sensitizing to institutional aspects of these programs that require careful consideration from the early stages of such a project.  None of these lessons should be accepted uncritically; rather, their potential relevance to an evolving program should be carefully assessed in the course of program design and decision-making.  With this approach in mind, it is hoped that the findings and lessons derived to date from the Central Puget Sound RFC Project will prove useful and suggestive to others who seek to implement a regional fare card project of their own.

• Consider a “consensus” organizational model to help assure support and participation of partners in a regional fare card project.

Allowing each partner an equal say in decision making in the regional partnership helps build trust, understanding and buy-in by ensuring that no one agency will dominate the process.  The consensus approach emphasizes the values associated with a philosophy of regionalism over individual agency self-interest.  A likely consequence of the consensus approach, however, is that it will require more staff time and cost than a structure with one lead agency.  Either approach should be guided by a formal agreement, endorsed by the highest levels of management in each participating agency, which specifies roles, responsibilities and organizational structure.  The Interlocal Agreement served that purpose for the Central Puget Sound RFC Project.

• Examine the contextual factors that characterize the region and the participating agencies, and carefully manage the associated issues that will determine the success or failure of a regional fare card project.

Contextual factors include each agency’s customer base, regional geography, agency size and services, agency governance structure, technology applications and needs, and existing fare structure.  Each agency will experience a unique mix of these factors, and they need to be carefully understood with regard to their implications for regional decision making and devising good solutions in support of approaches that meet the needs of the entire region.

• Understand the issues, strategies and trade-offs that motivate agencies to join in a regional partnership and provide appropriate support.

The state legislature is in a good position to recognize the region-wide value of a fare card program and can encourage broad participation.  The larger partner agencies can assume more of the risks and can set a good example as early adopters of the new technologies.  Central Puget Sound has benefited by having Sound Transit help underwrite some of the costs and liabilities for the smaller agencies to join the partnership, even though the project may not have appeared to “pencil out” for some of these agencies.

• Consider the value of implementing a limited fare pass program initially to serve as an interim experience base for a comprehensive region-wide electronic fare card system.

The Puget Sound region benefited from several precursor fare programs that helped “break the ice” by giving travelers and agencies some experience with smaller scale implementations that demonstrated the value and viability of such fare systems.  At this point in the evolution of regional fare card programs across the country, the lessons from Puget Sound and elsewhere may be just as useful as, and likely more cost-effective than, implementing limited deployments in a step-wise fashion.  Nevertheless, partial implementations may still be of great value, and the individuals who gain first-hand experience with such initial fare pass programs can be of assistance in guiding the development of a full region-wide system.

• Provide for appropriate legal support services to address the many significant legal issues faced in implementing a regional fare card project.

Regional fare card projects will likely face a variety of legal challenges, from the initial preparation of the RFP and negotiations with the candidate vendors to aspects of contract language, change amendments, specification of terms and conditions, intellectual property, warrantee and maintenance, indemnification against lost revenue and claims, and contractor performance security.  It may be helpful to consult with partnerships that have already undertaken a regional program to better understand the likely legal issues and ways to address them.  The Central Puget Sound RFC Project established a legal advisory team to deal with these issues, and this has proven to be a very useful structure for them.

• The technical, procedural and organizational complexity of a regional fare card program implementation suggests the need to plan for greater time, cost and management challenges than might be expected.

Assigning a full time Site Manager with the needed skills and experience in each partner agency seems to be a prerequisite for success.  The consensus model of governance is particularly time consuming, as discussed above.  It is critical to allow adequate time in the project schedule for document reviews, legal review, meeting attendance, technical integration, working with the vendor, and management oversight and coordination.  Also, more time and cost will be associated with a need to modify or customize hardware and software systems than with adopting an off-the-shelf solution.  Flexibility and willingness to change as the project evolves are critical organizational success factors.

• Provide for a regional team, sufficiently staffed, to support and lead the project.

The Regional Team on the RFC Project includes a Contract Administrator and a Technical Manager.  The Interlocal Agreement did not provide for a traditional project manager position.  The Regional Team plays a crucial role in supporting the extensive regional coordination and leadership workload of a project of this magnitude, but experience to date has shown that the Regional Team has been understaffed and lacked adequate focus on standard project management activities involving project planning, scope, schedule, direction, and guidance of key elements of the project.  In recognition of this need, additional resources have been provided, and a new position of Regional Implementation Manager has been created to help meet these pressing needs.

• Anticipate, understand, address and manage the risks associated with fare card technologies and the vendor relationship.

The risks of modifying an off-the-shelf system or selecting a customized fare card technology (hardware and software) are potentially much greater than the risks associated with accepting an off-the-shelf technology that is already proven.  One way to manage the risks is to establish a large performance security requirement at the outset of the vendor selection process to help assure that only financially secure firms are likely to respond.  It is preferable to select a vendor with established electronic fare card systems deployed elsewhere that also meet most of the requirements of the project.  This helps avoid the risks of adopting unproven technologies.  Customized software may need to be developed in order to accommodate the partners’ existing legacy systems with which a new fare card system must be integrated.  These risks usually cannot be avoided, though in the case of Puget Sound not all the partner agencies required integration with legacy systems.  Other ways to control risk include (1) establishing an escrow account for source code and documentation to protect against the risk of vendor default, and contractually require the vendor to deposit its proprietary source code, build documentation, and periodically update them, (2) requiring a conservative payment schedule that allows for major milestone payments at limited points in the contract, each associated with a significant and satisfactory completion of work, and (3) requiring extensive and comprehensive insurance coverage from the vendor.

• Understand the fare policy objectives and fare structure of each partner agency and establish a regional framework that can accommodate these different structures and is viable for all the partners.

The Central Puget Sound partner agencies selected a coordinated fare arrangement that enables passengers to use a single fare medium but allows partner agencies to retain autonomy in setting their fare policies.  The main alternative is an integrated fare structure that operates on a single standard when calculating fares.  The coordinated regional framework is likely to be perceived by the customer as more complicated and to entail greater programming costs for the agencies.

• Complex regional fare card projects likely will involve finance plans that include a diverse array of funding sources and demand significant flexibility and creativity on the part of the partner agencies.

The Central Puget Sound RFC Project finance plan includes federal, local and private funding sources.  A unique aspect of this project is the provision of funding to selected partner agencies by Sound Transit to subsidize the first few years of capital and operating costs.  This early financial support has been a critical factor in encouraging several of the partner agencies to participate in the regional program.

While these lessons address many of the larger issues associated with the implementation of a regional fare card program, they by no means cover them all.  Recognizing the nature of these issues and seeking to address them early in program development will, however, help agencies anticipate many of the governance and policy challenges inherent in such programs and avoid many of the major pitfalls.  Following the example and experience of the Central Puget Sound RFC Project to date, and the experiences and lessons of the other fare card systems around the country offers perhaps the best opportunity to identify a path to successful project implementation that will fit the needs of any other place seeking to set up this kind of fare system.  Working with these examples, the challenge will be to adapt them to successfully fit the needs and conditions of the region and the participant agencies.

GLOSSARY OF TERMS

 

ACKNOWLEDGEMENTS

We would like to thank Joe Peters of the Federal Highway Administration’s ITS Joint Program Office for his support in funding this project, Sean Ricketson of the Federal Transit Administration for his assistance in task management, and Pierre Youssef of Mitretek for his advice and support.  Candace Carlson, the Contract Administrator for the Regional Fare Coordination Project, was our principal point of contact, and she and the members of her Regional Team provided substantial assistance and time throughout the evaluation answering our questions, providing backup materials, and facilitating contacts throughout the Puget Sound region.  We want to thank in particular the Site Managers of each of the seven partner agencies and their respective agency teams, as well as representatives of ERG, the RFC Project vendor, for helping us understand the complexities and nuances of their involvement in this regional project. Representatives of the regional offices of the FHWA and FTA were helpful and supportive throughout.  Despite the very considerable amount of work on the part of these individuals to develop and implement the fare card project, each took the time to explain the project to us and answer our many questions.  The evaluation team is grateful for this kind assistance.

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