SEPTA Key costs balloon as agency fixes smartcard snafus

SEPTA’s capital budget for the upcoming fiscal year increased the estimated total price of implementing the Key card payment system to $297.77 million, a nearly $30 million increase over last year’s projection and $122 million more than the $175 million cost SEPTA estimated after selecting the project’s main contractor.

The 70 percent price jump comes along with a three-year delay on the project’s finish date — the project, which was originally scheduled for completion in December 2013, is now expected to wrap in 2020. Both changes can be blamed on unexpected do-overs and additions needed for the system software, and design upgrades for the notoriously user-unfriendly kiosks.

Every fix needed to make the cards easier to use means a revision to the scope of the initial contract with the contractors implementing Key, said Tom McFadden, SEPTA’s chief financial officer.

“There have been change orders that we’ve put in for either additional capacity or additional functionality,” said McFadden. “So, as we hear information from customers, things that they’re looking for, we start to look at ways that we can add functionality to the program. And all that gets thrown into the change orders, and that’s what really results in a higher budget.”

In March, SEPTA’s board of directors authorized the 18th change order with Conduent, the primary contractor for the Key system, raising the contract price to $159,773,499. The board simultaneously approved SEPTA’s 11th change order with Edens Corporation, which is working on the Key’s implementation on Regional Rail, increasing the total contract price to $81,628,804. And the contract with SEPTA’s technical consultant on the project, LTK Engineering Services, has been extended six times, bringing the total contract price to $15,777,704.

The changes to the original contracts come as SEPTA runs into unexpected problems with the smart card system’s rollout, and as the agency realizes there are additional features, unstipulated in the original contracts, that the Key should have. For example, in response to criticism over the kiosks’ confusing interface, SEPTA’s requested more intuitively designed machines. Similarly, SEPTA decided to hire a new design firm to build an easy-to-use website for the Key.

Constantly shifting goalposts have plagued the project from the start. Conduent, which due to mergers and spinoffs has changed its name three times during the course of the Key implementation (from ACS Transport Solutions to Xerox Transportation Solutions to the current name), signed a contract in December 2011, three years after SEPTA first issuedsolicited bids from contractors. Over that period, SEPTA added 26 addenda to the bid document, each of which, like the change orders, modified the scope and specifications for the new payment system.