Engage in project planning and make initial decisions about the ITS procurement process.
Experience from a review of ITS contracting methods and practices. Step 1 of the Decision Model.
Made Public Date


United States

Guide to Contracting ITS Projects


Experience has shown that the ITS procurement method can have a significant impact on the ultimate success of the ITS installation. Currently, the success rate for intelligent transportation systems life cycle is very low. Some of the key issues that have been identified with the procurement process include incorrect contracting approach, inexperience of the agency, failure to follow appropriate procedures, and inadequate commitment of project management and systems engineering resources.

The National Cooperative Highway Research Program (NCHRP) funded this research with the objective of developing a guide to contracting ITS projects and services that would assist government officials, traffic engineers, system integrators, and others involved in the specification development and purchasing of ITS installations. The approach for this study included an extensive literature review as well as a survey of state and local Departments of Transportation to learn about their current practices and experiences with ITS contracting. As a result, a report of findings, "Considerations for a Guide to Contracting ITS Projects" and "Guide to Contracting ITS Projects" were published. This guide presents an eight-step Decision Model that guides agencies through the procurement process and enables them to select the most appropriate procurement package for their project. To obtain a complete understanding of the Decision Model, readers should consider the full set of lessons learned (as each lesson learned is based on a separate step of the decision model).

Lessons Learned

Project planning includes a number of steps that are important to ensuring the success of the system procurement and acquisition process. The research concluded that all procurements should be preceded by the establishment of a shared vision among stakeholders for the project, the definition of project scope, a careful cost estimating process, and the development of a project work breakdown structure with a schedule for the systems procurement.

The guide notes the following key steps in project planning:

  • Determine project feasibility. During this stage, stakeholders must come to agreement on the project concept of operations and on how the system will be used. This involves a consideration of any institutional, financial or temporal constraints that may affect the ITS project. Once the concept of operations has been established, the stakeholders must outline the project scope, schedule, and cost estimations.
  • Consider the use of commercial off-the-shelf (COTS) products (hardware and software). In establishing project feasibility, the agency may learn that the planned system has been developed and procured by another agency. In this case, the guide recommends a commodity type procurement process. There are a number of benefits to procuring COTS systems: these systems have been previously tested; the cost for system upgrades can be shared by agencies; and the system’s operation can be assessed before system procurement. Agencies considering this option should consult other agencies that have had experience procuring COTS systems.
  • Consider whether outsourcing is an appropriate alternative. With this approach, an agency contracts for the acquisition of a function (i.e. an entire agency service such as traffic management, traveler information or toll collection) or a capability (i.e. an internal agency process such as inspection, maintenance, signal timing). The research concluded that outsourcing is a useful approach for the acquisition of new systems when an agency requires a new capability but does not have the personnel resources to manage its implementation, operations and/or maintenance.

Project planning prepares agencies for initiating the first step of the Decision Model used to guide the ITS procurement process. In the first step, agencies must assess the fundamental project characteristics and make initial decisions about the nature of the procurement. The following guidelines are provided regarding the first step of the Decision Model:

  • Utilize an outsourcing procurement package if outsourcing an existing agency activity or function is planned.
  • Utilize traditional consulting procurement processes if consulting services are required.
  • Utilize the Decision Model if the project includes system development.

This initial step assists agencies in determining whether the Decision Model is appropriate for their project or whether an outsourcing or consultant contract is required. This step, combined with the subsequent steps of the Decision Model, is designed to create an efficient and reliable procurement process. This increased efficiency can result in cost savings for agencies in the procurement of ITS. Moreover, by enabling agencies to choose the most appropriate procurement package, the Decision Model facilitates the ultimate success of the ITS deployment.

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