CONSIDERATION OF QUALITY CRITERIA WHEN AWARDING BUS TRAFFIC CONTRACTS Marja Rosenberg

1. CONSIDERATION OF QUALITY CRITERIA WHEN AWARDING BUS TRAFFIC CONTRACTSMarja Rosenberg

2. Authors Marja Rosenberg, M.Sc.Tech., Senior Research Scientist, VTT Technical Research Centre of Finland, P.O. Box 1800, FIN - 02044 VTT Finland, marja.rosenberg@vtt.fi Pirkko Erämetsä, M.iur, Attorney-at-Law, Forum Partners Attorneys Ltd., Mannerheimintie 20 B, 00100 Helsinki, Finland, pirkko.erametsa@fp.fi Åsa Krook, LL.M., Attorney-at-Law, Forum Partners Attorneys Ltd., asa.krook@fp.fi

3. Content • Introduction • Models for quality factors • Assessment of the models • Conclusion

4. Two authority organisations in Helsinki region • Helsinki City Transport Office is responsible for the bus transport competitive tendering concerning the inner city bus transport in Helsinki • Helsinki Metropolitan Area Council is responsible for the bus transport competitive tendering concerning regional and inner city bus transport in the neighbouring cities of Espoo and Vantaa. • Aim of the study: Whether and how quality criteria could be taken more broadly into consideration in the competition process for bus traffic contracts the aim being to improve the quality of bus traffic services.

5. Pohjolan Liikenne 3 % Small companies 4 % HKL 26 % Koiviston Auto 10 % Suomen Turistiauto 11 % 1994 Connex 22 % HKL 30 % + Suomen Turistiauto 15 % Concordia 24 % Savonlinja 1 % Pohjolan Liikenne 4% Small companies 2 % Koiviston Auto 1 % Connex 26 % Concordia 21 % Market shareRegional bus lines Helsinki Inner City bus lines 2004

6. Quality standards • customer service • operational • technical Customer satisfaction assessments Bonus and penalties Quality control Operational follow up Operators' operational models Feed back from customers Comparison criteria price, quality, fleet

7. Current situation in assessment of tenders in Helsinki • ‘the most economically advantageous tender’ • How the quality factors can be included? • the weight of the criteria for fleet gives 13 points in maximum and the price criteria 87 points in maximum • Quality bonus is used in contracting and can increase the contract price by 3-4 %

8. Experience from Copenhagen and Gothenburg • The contract awarding models used by the cities of Copenhagen and Gothenburg were contemplated as references for the research. • Copenhagen has introduced a new model in 2004 • Gothenburg has had its model in use for a few years • Both reference cities seemed to be very satisfied with their systems and had achieved a better quality in bus transport. • Regarding the authorities there had not been any claims or problems with the operators to accept these methods or from the legal point of view.

9. Weightings The weightings in evaluating the most economically advantageous tender in Copenhagen and Gothenburg were as follows: Copenhagen Gothenburg price 40 % 60 % quality of services 35 % 20 % quality of buses 25 % 5 % references 10 % experience 5 %

10. Quality factors The following factors were found relevant in affecting the quality : • Operator's organisation and the development of the organisation • permanency, recruiting and education of the staff • working conditions and internal information system • ways of cooperation • security and safety • flexibility in case of changes in traffic or routes and timetables • operation in unusual situations • guaranteeing satisfied customer service • reaction to feedback • punctuality • developing of services

11. Alternative models in Helsinki 1 Innovative model • awarding criteria are e.g. • familiarizing of the personnel with the traffic routes in question • handling of feedback • organizing information flows • training programme for the personnel • drivers' language skills. • The evaluation scale and qualification criteria, e.g. four different quality level classes, are announced in the tender documents. • The operator descripes the mode of operation and methods to achieve the specified demands of the authority • This alternative model is more like the Gothenburg model.

12. Alternative models in Helsinki 2 Self assessment model • the tenderer itself promises a quality level fulfilling or exceeding the minimum criteria set forth. • the comparing factors are numeric e.g. in the scale of the customer saticfaction assessment (1-5) • Quality factors are e.g. customer service,driving style, ability to give information to passengers • This alternative is more like the Copenhagen model. 3 Ordinary model • the awarding criteria can be the same as in the innovative model but also references and experience could be added. • the assessment of the criteria is based on the contracting entity's evaluation and determination between the tenders.

13. Quality indicators Quality indicators had to be • quite few, • transparent • unambiguous • specified so that the evaluation is possible to carry out objectively and clearly.

14. Assessment of the models Basically all of the procedure models seem to be possible from the juridical point of view ; • Innovative model is the most riskless model. • Self assessment model is the most complicated and risky model, especially in respect of setting the minimum numerical requirements. • References as evaluation criteria in the Ordinary model should be used only restrictedly or should be left totally out.

15. Conclusions • The main action is in the first hand the cooperation between authorities and the operators in different levels of organisations. • The public transport authority • has to specify the quality standard to indicate what is the minimum quality stage they want to get from the operators and provide to customers. • Specify those factors which are of importance from the quality point of view • Verify the technical specifications i.e. the quality criteria linked to the invitation to tender. • Customer satisfaction assessment should be developed by harmonizing the measurable quality factors, their evaluation scales, weightings and determination principles. • A quality control system shoud be created for the production of transport services. • The system should be such that the contracting entities and operators are able to mutually accept it and to follow it as a part of their daily operations.

16. What has happened? • The two authorities are negotiating to find out a common model for upcoming competitive tendering turns using components both from innovative and self evaluation models • Helsinki City Transport Office prefers the Innovative model • Helsinki Metropolitan Area Council (YTV) is not so eager to use these models, the bonus and penalty system seems to be good enough

17. Thank you for your attention! marja.rosenberg@vtt.fi www.vtt.fi