Transport for London
Outsourcing of the verification of name and address checking and penalty fare administration services from TfL to an external supplier.
Bus Enforcement (BE), as an operational department within the Community Safety, Enforcement and Policing directorate of Transport for London, employs approximately 285 Revenue Protection Inspectors (RPIs) who are responsible for the detection of fare evaders on the network. Once detected, an individual who has been identified as an evader can expect either to receive a Penalty Fare Notice (PFN) or to be reported for consideration of prosecution.
BE previously processed all PFN payments in-house, together with all first and second stage Appeals. The recovery rate for PFNs being paid in full within 28 days was approximately 30%. The decision was therefore taken to investigate the feasibility of increasing recovery rates and reducing the costs of operation through letting an out-sourced contract for elements of the back office operation.
To continue processing PFNs Notices in-house, it was also considered that TfL would need to upgrade the internal back office computer systems and develop internet and telephone payment options for customers. These payment channels did not previously exists on the TfL estate, and would therefore need to have been developed, with the costs of development being covered by BE and CSEP. In addition, staffing levels would need to increase to maintain and process data from these systems and to deal with customer enquiries arising.
BE investigated out-sourcing these services in late 2007, to see if the recovery rate of fully paid Penalty Fare Notice(s) could be increased. An existing TfL supplier, ITAL, who already provided similar services to LOROL (London Overground), was selected for a 6 month trial. Positive results included increasing overall payments results by approximately 5%; this was due to the supplier providing on-board debit and credit card payment facilities in addition to on-line and telephone customer payment facilities.
Due to the success of the trial, which started in the North West area in April 2008, a 1 year Single Sourcing Justification with the same supplier was placed to roll the system out London-wide. This SSJ which was due to expire in Jan 2010 was extended to May 2010 to allow for completion of an OEJU procurement process.
BE investigated a joint approach with LUL, but at the time they were utilising differing software and their own timeline did not match with BE. However the contract let by BE was scalable for other TfL businesses to adopt the services provided at an appropriate time.
To find out whether ITAL’s support services for revenue protection could help TfL to recover more of the money due from Penalty Fares issued by utilising the following services:-
- Running a Name & Address checking helpdesk with access to a large database of previous offences
- Handling first level Appeals (via website as well as by post)
- Sending chasing letters to those who haven’t paid
- Providing customer with additional ways to pay: online via a website, or via a 24-hour telephone service, or using a credit/debit card on the bus
Outsourcing of the above services would allow TfL to make significant efficiency savings in its back office
Trial to Prove Capability
As an SME ITAL had to prove themselves to TfL. An initial overview of the services available to TfL from ITAL identified the following expected benefits for TfL. Therefore TfL undertook a 6 month trial of ITAL services to establish whether expected benefits would be derived.
|PF Payments||TfL Situation||Situation with ITAL|
|Verification of Name and Address (VNA)||Checks done against Electoral Roll in “Fastrac” which is updated quarterly.No offender history available.||Checks done with similar software updated quarterly. Full offender history available including aliases used, payments history and other warnings.|
|Approx 60% of cases are NFA’d due to VNA
|No sharing of data with ATOC or others.||Sharing of Data with ATOC and others.|
|(NFA: No Further Action).||No mapping facility.||Full geographic map display of address available.|
|Payment Options for Customers:|
|Credit/Debit Card payment on-bus.||Not available (but would be essential for Cashless Buses).||Available.|
|Telephone Payment later.||Not available.||Available|
|Web Payment later||Not available yet although system was being developed – no end date in sight at present.||Available|
|PF Appeals:||In writing within 21 days only option.
First, Second and Independent Third Stage.
|Can be logged via ITAL website. In addition, Template available to download, to be returned by post or fax.
Allowing for a speedier logging and speedier resolution.
Currently deal with first stage Appeals, but could be expanded to deal with second Stage if required.
|Payments:||Approx 30-40% paid.||Approx 60-80% paid.|
Why ITAL was Selected
ITAL was selected for the trial of their services following an external market analysis which established that ITAL appeared to be the only UK Company that could deliver the services required by TfL in a one stop shop approach. Following the 6 month trial of ITAL’s services TfL reviewed the benefits and identified significant cost savings as well as increased PFN income recovery rates. It was therefore decided to award a longer term contract for the provision of services. Initially a 12 month single source contract was awarded while TfL undertook an OEJU competition for the procurement of the services required long term.
Following advertisement of the Tender Process 54 companies completed expressions of interest. Of these, 24 companies completed the Pre-Qualification Stage by use of pre-qualification questionnaires and these were assessed against pre-determined evaluation criteria. 20 companies were short-listed at PQQ stage and were invited to submit tender bids. 5 companies submitted compliant tender bids and these were then evaluated using pre-determined evaluation criteria.
Following moderation and consensus scoring of these bids ITAL’s tender was selected as the most suitable tender bid
ITAL has always responded positively with a “can-do” attitude and in a timely fashion to TfL’s changing demands. Our expectations have been fully met and surpassed on many occasions over the several years we have been dealing with ITAL. ITAL have worked in a true partnership approach with TfL to deliver many benefits for TfL and its customers. Their approach is commendable. ITAL have worked very closely with TfL in the past 12 months to design an integrated and modern enforcement database incorporating prosecutions, penalty fares and concessions management systems.
Data Protection/PCI-DSS Compliance
Protection of TfL customer data and compliance with all legal requirements is paramount for TfL as a public authority. During several audits of their services by TfL ITAL have successfully demonstrated the highest levels of compliance with the DPA 1988 and PCI DSS requirements.
Technology & Innovation
TfL has been hugely impressed with the innovative way in which ITAL delivers its services. ITAL is a market leader in technology applications supporting its services to its clients. Of particular note is the ITAL Client Portal giving TfL management a myriad of operational and management reports which enable us to keep track of key performance data and income/expenditure on the contract. This has saved significant time and back office resource previously engaged in monitoring this type of data. The use of home workers also supports the requirements of TfL’s work/life balance initiatives and is truly innovative in the transport industry. Telephony and computer facilities including back up is first class and highly commended leaving me with no worries for emergency preparedness. ITAL also take security and fraud prevention very seriously and have successfully passed an audit conducted by TfL’s fraud and security department.
All identified improvements were achieved and continue to be delivered, and the following was achieved in the most recent tender negotiations:-
Retention of a variable price contract model which incentivises the contractor to recover additional TfL revenue and limits risk to TfL in the event of fluctuating PFN levels.
A reduction in cost on their original tender bid.
A cost saving compared to the previous contract pricing arrangements with no indexation for the 2010/11 financial year (was 3.7%).
Longer opening hours of the VNA helpdesk for operational staff at no extra cost.
Agreement to system developments going forward to fit in with the need to upgrade TfL’s back office systems.
Other TfL modes have also identified ITAL as their preferred supplier of these services and they now also utilise ITAL under this OEJU contract.
Services provided to London Buses have recently been fully taken up by LUL. ITAL are currently engaged through O2 and Cognito, other TfL partners, to provide new back-office enforcement computer systems to TfL. TfL will continue to work in a partnership approach with ITAL to deliver continuous improvement and value for money for TfL and its customers whilst at the same time helping ITAL to deliver improved services for all its clients.
Based on TfL’s experience, I would highly recommend ITAL as a company to work with. They can be relied upon to work in true partnership to deliver business benefits for all concerned whilst maintaining their position as a market leader.
John Conway, Enforcement Manager, Enforcement & On-Street Operations Directorate, Transport for London