MetroAccess Business Model
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1 Finance & Administration Committee Information Item IV-A December 1, 2011 MetroAccess Business Model
2 Washington Metropolitan Area Transit Authority Board Action/Information Summary Action Information MEAD Number: Resolution: Yes No TITLE: MetroAccess Business Model PURPOSE: To provide the Board with information on the upcoming MetroAccess solicitation including: 1) a review of the performance criteria for the upcoming paratransit contract solicitation; 2) a presentation of the business model; and 3) a progress report of the procurement time line. DESCRIPTION: The current paratransit contract will come to a conclusion on June 30, Development of a new paratransit business model began earlier this year. The MetroAccess team, in coordination with stakeholders, has developed the elements of a new business model that will serve as the framework for the upcoming MetroAccess solicitation. Significant public and industry input has been obtained through a robust vetting campaign that included a vendor conference focused on industry best practices; public town hall meetings hosted by the Accessibility Advisory Committee; and a series of Customer Focus Groups comprised of randomly selected customers, disability advocacy organizations, and peer transit agencies. The framework for the new business model is performance based and is comprised of six key requirements which are focused on: 1) safety; 2) affordability and optimizing efficiencies; 3) scalable pricing structure; 4) leveraging Metro s buying power and technology; 5) consistent, high quality vehicle maintenance; 6) accountability and brand integrity. Four business model concepts were studied and evaluated based on the key requirements listed above: 1) a single contractor model which reflects the current state; 2) multiple contractors with a broker; multiple service provider
3 contractors without a broker; and 4) an in-house model where Metro would directly operate the entire paratransit service. Only one concept, the multiple contractors with a broker model, satisfied all seven key requirements. An additional set of five evaluation criteria were then applied to all four prospective concept models to determine suitability based on: 1) stakeholder approval by customers; 2) stakeholder approval by vendors; 3) prevalence within the industry; 4) potential cost; and 5) impact on internal headcount. Once again, the multiple contractors with a broker model achieved the highest value rating. The recommended business model is more aligned with other paratransit services of similar size and scope and will be more efficient and cost effective for Metro. This is consistent with Metro s goals of Creating a Safer Organization; Delivering Quality Service; Using Every Resource Wisely; and Maintaining and Enhancing Metro s Image. The multiple contractors with broker model provides greater levels of accountability by separating key functions for optimal accountability and transparency. The MetroAccess Call Center will be a separate entity from street operations. The new business model will leverage competition by unbundling commodities which can best be provided by Metro, and will level the playing field for prospective bidders. Long-term stability of the service is further ensured by anchoring essential infrastructure to Metro s foundation. FUNDING IMPACT: The recommended business model conforms with Metro's multi-year budget forecast for FY FY 2015 Project Manager: Christian T. Kent Project Access Services / Office of MetroAccess Service Department/Office: RECOMMENDATION: Next Steps: Develop MetroAccess RFP for release by the end of March 2012, with an anticipated award by the end of December 2012.
4 WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY MetroAccess Business Model Finance and Administration Committee December 1, 2011
5 Purpose Review performance criteria for solicitation, outlining i substantial ti public participation in their development Present business model Report progress on procurement timetable
6 Public Participation A robust campaign of stakeholder vetting was a critical first step in our process: Vendor conference on industry best practices Town Hall meetings hosted by Metro s Accessibility Advisory Committee Focus Groups with randomly selected customers, disability advocacy organizations, peer transit agencies
7 Public Participation: Findings From the Town Hall meetings and Focus Groups, some common themes emerged: Improve quality assurance for call center operations Improve scheduling efficiency <Focus Group Video Clip> Provide better avenues for customer communication Continuity of service is critical
8 Performance Criteria for New Contract The MetroAccess team, in coordination with stakeholders, developed key requirements for the new paratransit business model: Safety, service reliability, and customer focus Affordability, optimizing efficiencies Scalable pricing structure Leverages Metro s buying power and technology Consistent, high quality vehicle maintenance Accountability and brand integrity
9 Paratransit Business Models Single Contractor Metro Contractors Metro (current) with Broker Prime Contractor Subcontractors Call Center Quality Assurance 60% Operations Taxi 35% Operations 5% Operations Broker Contractors 95% Operations Call Center Taxi 5% Quality Assurance Contractors w/o Broker Contractors t 95% Operations Metro Taxi 5% Quality Assurance Call Center In House Direct Relationship to Metro Metro Call Center Quality Assurance 100% Self Operated Indirect Relationship
10 Business Model Evaluation The multiple l contractor t with broker model meets all of the requirements Current Model with Broker w/o Broker In House Safety, service reliability & customer service focused Affordability, optimizing efficiencies Scalable pricing structure Leverages Metro s buying power & technology Consistent, high quality vehicle maintenance Accountability & brand integrity
11 Business Model Evaluation Customer, Vendor, and Internal Perspectives Current Model with Broker w/o Broker Stakeholder Approval, Customers In House* Stakeholder Approval, Vendors Industry Prevalence** Cost $ $ $$$ $$$$$ *Only one agency operates its service in-house **Industry comparison conducted among similarly situated properties
12 Operational Benefits of Selected Model The new model will build in accountability: Scheduling Efficiency no single entity creates own schedules; call center and street operations separated Call Center managed independently from street operations, measured by Quality Assurance contractor, and poised for use of enterprise-wide performance standards Street Operations safety, on-time performance, customer service, and maintenance managed by Operations Broker, and evaluated by Quality Assurance contractor t
13 Financial Benefits of Selected Model The new business model conforms to the MetroAccess multi-year budget, and saves cost by: Separating functions to establish checks and balances for optimal transparency and accountability Leveraging competition among multiple entities Ensuring long-term stability of system by anchoring infrastructure to WMATA foundation Unbundling commodities best provided d by WMATA to create level playing field for bidders Aligning MetroAccess business model to one more prevalent Aligning MetroAccess business model to one more prevalent among similarly sized paratransit services
14 Next Steps Procurement Time Line Task Start Date Completion Date Exercise Final Option on MV contract 7/1/11 6/30/13 Conduct Stakeholder Meetings 7/1/11 10/31/11 Present tbusiness Model lconcept tto Board 7/1/11 12/1/11 We are here and on schedule Issue RFP and Receive Proposals 3/31/12 6/1/12 Evaluate Proposals 6/1/12 8/31/12 Best and Final Review, Contract Award 9/1/12 12/31/12 Start Up Preparation and Contract Transition Period 1/1/13 6/30/13 Begin New Contracts 7/1/13
15 Next Steps Plan for Transition of Services Task Start Date Completion Date Present Business Model Concept to Board 7/1/11 12/1/11 Best and Final Review, Contract Award 9/1/12 12/31/12 Start Up Preparation and Contract Transition Period Begin New Contracts 7/1/13 1/1/13 6/30/13 Lessons learned last transition was three months with wholesale change in call center, fleet, and operating policy New schedule allows six months for staggered start-up of contracts No conversion of software, customer data, or fleet necessary Start-up period to include robust customer communication plan
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