The Washington state Department of Transportation will get $2.4 million in discounts from its tolling contractor to compensate for delays in launching Highway 520 floating bridge tolls last year — and in return, the company will keep the inside track for future contracts, as tolls extend to the Highway 99 tunnel and other congested areas.
Dallas-based Electronic Transaction Consulting Corp., which processes about one-third of all tolls in the U.S., is now handling about 70,000 daily tolls on the bridge with “99.9 percent” accuracy, says Craig Stone, state tolling director. “When you look at the overall system, it is operating and giving us the product that we want,” he said.
Under the deal announced Wednesday, ETCC’s contract will be extended four years, from 2014 to 2018, for around $29 million before discounts. But the value would grow if tolling proliferates. To get the extension, ETCC must meet performance standards and finish a few improvements, including a Spanish-language website, he said. The state says it already withheld $1.5 million in payments on the existing $23 million contract.
The state and the company announced their settlement Wednesday morning. Tolls began Dec. 29, a year after the WSDOT hoped, and 24 weeks after a contract deadline. There were also some errors at the Tacoma Narrows Bridge, where ETCC took over from another contractor and hundreds of citations were dismissed by a judge.
By Stone’s reckoning, ETCC caused 21 weeks of the delay. The existing contract called for $300,000 in liquidated damages per week, for a $6.3 million total. The company, and outside experts, say the state contributed to delays by demanding an unprecedented amount of detail.
Besides the $2.4 million in discounts, the state says it will receive licensing rights to use ETCC software worth $4 million, in the event a different vendor takes over someday. The actual value of software six years from now is debatable, but Stone argues ETCC has created a successful system with the unique ability to track and assign toll payments to the individual highway projects, unlike other states.
A bigger issue is the state’s future tolling empire. Highway 99 is to be tolled in 2016, while state officials have considered tolls on the I-90 bridge, the I-5 express lanes, and for solo drivers to enter the carpool lanes of I-405, to fund high-occupancy or toll (HOT) lane expansions there.
“We believe this is a fair and equitable agreement and we are pleased to have the opportunity to continue to partner with WSDOT in the future growth of the statewide Good To Go! program,” said ETCC’s chief executive, Tim Gallagher, in a statement. By making the settlement, the state avoids court costs, and the risk of errors or expense if it changed toll contractors again.