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SmarTrip Upgrades Pushed To 2010
Metro Audit Finds Agency Failings

By Lena H. Sun
Washington Post Staff Writer
Monday, September 22, 2008; B01

Metro is overhauling the office in charge of the popular SmarTrip electronic fare cards after internal audits found that failures by the main contractor and agency managers have added at least $2 million in costs and three years in delays for long-awaited, customer-friendly features.

Continuing software issues and the office shakeup have slowed the project even more. As a result, features to make the plastic card more convenient and versatile, which were supposed to be ready next month, will not be working until 2010, officials said.

By then, the card is supposed to be able to compute all bus and rail fares and special passes offered by Metro and regional transit partners, such as Virginia Railway Express's Transit Link Card, Metrorail's 7-Day Fast Pass, and Montgomery County's Ride On monthly pass. The passes provide discounts, and many riders use them to save money.

Riders also will have to wait until 2010 before they can automatically add money to their cards, the way drivers do with the popular E-ZPass electronic toll payment system. Currently, riders can use the cards only to pay for a single bus or subway ride and to park at Metro lots. To add money, riders must use fare machines at subway stations or on buses.

Riders have been repeatedly promised these features by officials from Metro and Cubic Transportations Systems, which has been paid almost $15 million to upgrade SmarTrip hardware and software and fare collection equipment, with few results.

The disclosures also raise questions about Metro's management and spending during a time when the agency's fiscal woes forced it to implement the largest fare and fee increases in the agency's 32-year history. The audit report by Metro's inspector general faults the agency, for example, for taking too long to make decisions -- one took three years -- and failing to include contract language penalizing Cubic for missing deadlines.

The resulting delays affected Metro's contract with a second company that runs the SmarTrip customer service center and cost the agency an additional $1.4 million, the audit found. Since the audit's release this spring, Metro estimates revisions to the Cubic contract will cost $825,000 more.

Metro General Manager John B. Catoe Jr. acknowledged the problems with Cubic and agency management but said he took immediate action to overhaul SmarTrip and tighten oversight to ensure the work gets done.

"We are paying attention to everything that's happening," he said.

Metro Board Chairman Chris Zimmerman acknowledged that delays have resulted in frustrations "in getting the improvement that everyone wants." At the same time, he said, Metro has been at a disadvantage in dealing with Cubic because of its dominance in the market.

"They are a difficult party to deal with, and we don't have much leverage," Zimmerman said. "We're at the mercy of folks whose business it is to get money out of government."

Cubic officials declined repeated requests for comment.

Catoe has restructured the office under a new director with a staff of 26, a significant increase. Most positions are being reassigned from elsewhere in Metro.

Previously, SmarTrip was shuttled from office to office within the agency, with limited resources. "Not surprisingly, the program has suffered from both a cost and schedule standpoint," Catoe said in a recent memo.

The project, he wrote, is now "at a critical junction which requires support on a priority basis." To underscore that point, the new director will report directly to Catoe.

"Smart-card holders can expect more from their cards, beginning later this year," SmarTrip director Cyndi Zieman said in an interview. This fall, riders will be able to add value to their cards at places other than in subway stations and on buses. Riders will be able to reload their cards with cash, credit or debit cards at 12 commuter stores across the region, four Metrobus garages and some Giant grocery stores. Details will be announced later, officials said.

The blue-and-green SmarTrip cards play a principal role in how people use transit in the Washington region. By next month, all regional bus systems in the area will accept SmarTrip. In January, Metro plans to eliminate paper transfers, the free bus-to-bus transfers and the discounted rail-to-bus transfers. Those transfers are automatically computed for SmarTrip users.

When riders board a Metrobus, they can receive free paper transfers that allow unlimited travel for up to two hours anywhere in the region. About 30 percent of boardings involve a transfer.

Like other transit systems, Metro is trying to shift from cash and paper to electronic fare cards to reduce fraud, costs and boarding inefficiency. Metro officials say it is common for passengers to use invalid bus transfers or to share or sell them, although the abuse is hard to quantify.

Smart cards are credit card-size plastic cards with an embedded antenna and computer chip. In 1999, Metro became the first public transportation system in the United States to adopt them, and more than 3 million of the permanent, rechargeable cards have been sold, officials said. More than a million SmarTrip cards are in active use.

The idea was to make public transportation in the Washington region so easy and seamless that more people would want to ride. Since then, the cards have gained popularity with other transit agencies. A German company, Scheidt & Bachmann, provided the smart card system for the Boston transit agency. Cubic also has contracts with New York, Los Angeles and London transit agencies for their smart cards. Last month, Transport for London gave notice that it was going to cancel its contract with Cubic and another partner to save money.

In Washington, Cubic has repeatedly missed deadlines in the past five years, the audit found. Last year, a Cubic official said in an interview the company was "on track" to complete its work by October. Last week, the same official declined to comment.

Metro awarded a $12 million contract to Cubic in 2003 to perform the software upgrades. The contract did not include penalties for delays, despite Metro policy dictating otherwise.

Shortly after the award, Cubic told Metro that the agency's software was outdated and would no longer be supported by Cubic and recommended that Metro buy a new Cubic system. Asked why Cubic did not inform Metro about the new system during contract negotiations, Cubic officials said fare collection technology and their corporate strategy had changed, according to the audit.

It took an additional three years for Metro to decide to proceed with the new Cubic system, "a significant delay" that "adversely affected the delivery schedules," the audit found.

When Metro agreed to an $11 million contract modification to go with the new system, the agency added penalties if Cubic missed the new deadline: next month.

But that deadline has been pushed to 2010 because Metro is renegotiating parts of the contract. Cubic will no longer be responsible for providing the online application to allow riders to view their card activity and turn on the automatic-loading feature, officials said. In addition, continuing software issues between Cubic and the company that operates the customer service center have added to delays, officials said.

Asked whether Metro should consider finding another company to complete the work, SmarTrip director Zieman said the agency had already made significant investments. "We want to be a good steward of public money," she said.

She said that her office will have a schedule requiring on-time performance and that "we are negotiating penalties for the contractor."

Special correspondent Karla Adam in London contributed to this report.

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