Based on data from Maryland and Kentucky, the costs to deploy a CVISN electronic credentialing system ranges from $464,802 to $935,906.

From the CVISN MDI Evaluation Report: Chapter 6 CVISN Cost Analysis - Electronic Credentialing

Made Public Date
01/16/2004

54

Kentucky
United States

55

Maryland
United States
Identifier
2004-00056
TwitterLinkedInFacebook

Summary Information

Electronic credentialing systems were deployed in Kentucky and Maryland to improve efficiency and reduce the turn-around-time it takes to provide permits to carriers. These systems enable electronic submittal, automated processing, and cross-checking of applications; invoice transmittal; electronic fee payment; issuance and printing of credentials; and electronic filing and payment of interstate commercial vehicle fuel taxes. In addition, these systems are integrated with the IRP (International Registration Plan) and IFTA (International Fuel Tax Agreement) clearinghouses.

The electronic credentialing system was well received by carriers who could print credentials at the terminal stations and expedite the vehicle credentialing process. In addition, most carriers indicated system start-up costs were minimal since training and equipment were limited to application of typical desktop-computer operations. States, however, reported a wide range of costs since the system had to be custom tailored to meet the needs of each individual state. Overall, the capital and O&M cost expenditures for each state were dependent on whether commercial software was purchased, or if special software had to be developed and if third-party services were used.

Because IFTA processing uses many of the same systems developed for IRP, IFTA development cost is much lower than that for IRP.

Some states provide credentialing administration functions in-house while others use Vehicle Information System for Tax Apportionment (VISTA), a third-party provider. The designation of “VISTA” and “non-VISTA” are used accordingly.

MARYLAND

Maryland invested $464,802 (1996-1999) to deploy IRP (VISTA) for electronic credentialing. It was noted that about 30% of funding was for in-house development labor, and 30% was for equipment purchases. Other major cost drivers included administrative costs and contract costs. Once the IRP electronic credentialing system was operational, Maryland spent about $28,541 to add-on the IFTA electronic credentialing function.

The tables below provide the components and associated cost for the IRP and IFTA systems deployed in Maryland.

IRP VISTA - Cost Element
Cost
Equipment
$131,626
Contract
$84,637
In-house labor
$150,395
Communication
$777
Administration/travel
$97,367
TOTAL
$464,802
IFTA VISTA Cost Element
Cost
Equipment
$15,051
Contract
$216
In-house labor
$12,202
Administration/travel
$1,072
TOTAL
$28,541


The report indicated O&M costs decreased after electronic credentialing was deployed. Prior to deployment, annual O&M (including labor) to administer/manage each carrier account (6,500 accounts) cost about $138.20. After deployment, annual O&M for each account cost about $91.95.

KENTUCKY

Kentucky invested $935,906 to deploy IRP (non-VISTA) electronic credentialing. In Kentucky, the state had its own in-house credentialing system and did not need a third-party provider to support VISTA credentialing activities. Once the IRP electronic credentialing system was operational, Kentucky spent about $98,650 to add-on the IFTA electronic credentialing function. The report indicated about 81% of the IFTA start-up costs were attributed to software development.

 

 

 

IRP Cost Element
Cost
Hardware server
$65,000
Software development
$420,000
Legacy system modification
$225,000
In-house and contractor labor
$169,640
Training state
$960
Travel
$3,750
Administrative
$11,250
Project management
$26,250
Training carriers
$6,556
Showcase
$7,500
TOTAL
$935,906

 

 

 

IFTA Cost Element
Cost
Software development
$80,000
In-house labor
$1,600
Staff training, state
$800
Travel
$1,250
Administrative
$3,750
Project management
$8,750
Showcase
$2,500
TOTAL
$98,650


The report indicated that O&M costs for credential administration decreased after system deployment. Prior to deployment, annual O&M (including labor) to administer/manage each carrier account (4,400 accounts) cost about $62.54. After deployment, annual O&M cost about $39.54 for each account.

Notes:
The author recommended that states attempting to adapt or extrapolate costs information from this study should first account for any significant differences between their operating procedures and the procedures used by states participating in this study.

System Cost

Cost to deploy an end-to-end IRP electronic credentialing system: $464,802 to $935,906. Cost to add-on IFTA to an existing IRP electronic credentialing system: $28,541 to $98,650.