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Monday, May 20, 2024 | Back issues
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Xerox Sues After Losing Big E-ZPass Contract

CONCORD, N.H. (CN) - Having lost a lucrative E-ZPass contract to a more expensive competitor, Xerox claims in court that New Hampshire acted in bad faith.

Xerox noted that it has handled the backend of New Hampshire's E-ZPass operations since the inception of the state's electronic toll collection system in 2004.

As with the 13 other public agencies across the country whose systems it handles, Xerox says it used a proprietary software suit called Vector to manage New Hampshire's E-ZPass accounts, distribute transponders, enforce violations, coordinate with other states and handle all customer service for nearly 75 million NH E-ZPass transactions a year.

Xerox has enjoyed three contract renewals, the latest of which is set to expire on Sept. 30, 2016, but is crying foul now after New Hampshire entered into six-year, $51.9 million contract with Cubic Transportation Systems Inc., a company with "no toll experience in over twenty years," according to the complaint.

Though Xerox underbid Cubic by $6.9 million, New Hampshire let Cubic revise its bid, and the competitor still "exceeded Xerox's bid by approximately $3.6 million," the complaint filed in Merrimack County superior court states.

New Hampshire nevertheless scored Cubic 0.64 points higher in its proposal-ranking rubric than it scored Xerox by employing a "subjective and arbitrary" technical evaluation system, Xerox says.

While Xerox did 9.2 points better than Cubic on price, New Hampshire found that Cubic did 9.9 points better than Xerox on tech.

Xerox questions how New Hampshire arrived at that conclusion since it says Cubic has never provided electronic toll collection services before and lacks the necessary software suite.

The difference, according to the Oct. 16 complaint, may lie with Xerox's preference to maintain a customer-service call center in New Jersey.

Xerox claims that New Hampshire's bid-solicitation paperwork made no mention of considering "the number of New Hampshire hires" as part of its decisionmaking process, but that the state's acting transportation department commissioner trumpeted the 50-plus jobs that Cubic brings to the state by having a subcontractor open a call center in Concord.

New Hampshire jobs aside, Xerox says the state is in for a world of trouble when it comes time to migrate the data.

Once Xerox begins dismantling the existing infrastructure that support the NH E-ZPass, those actions are irreversible, according to the complaint.

Xerox says Cubic will also gain access to information about Xerox's propriety software, thus achieving an unfair competitive advantage, once the "risky" data migration process begins.

Xerox wants an injunction prohibiting the NHDOT and Cubic from implementing the contract, and a declaration that the procurement was unlawful and the resulting contract is void.

It is represented by Bryan Gould of Cleveland, Waters and Bass.

Xerox declined to comment. Cubic cited a customer agreement in declining to comment, referring inquiries to the NHDOT.

That state office has not returned a request for comment.

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