Memphis Contracts with Private Vendor That Has Serious Problems in Florida

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Memphis City officials apparently have at least three contracts with a private vendor that reportedly had serious problems of late in Florida.

Memphis taxpayers have invested millions of dollars in those contracts.

That vendor, the New Jersey-based Conduent, is reportedly responsible for serious problems with Florida’s SunPass tolling system — specifically, millions of unprocessed toll charges. The company might even owe the state at least $1.7 million, according to The Tampa Bay Times.

The Tennessee Star tried repeatedly and often for more than a week to get comments on the matter from Memphis Mayor Jim Strickland’s office as well the city’s 10 current city council members.

None of those people, not even Strickland’s two public information officers, returned our messages seeking comment.

Conduent spokesman Neil Franz, meanwhile, operating from a Maryland-based office, said he had no information about any contracts Memphis has with his company.

But the city of Memphis’ website lists three contracts with the company that say otherwise — for “Professional, Scientific and Technical Services.”

A source sent The Star a copy of another supposed contract the city has with Conduent for traffic cameras, enacted in April.

Memphis officials would not respond to The Star’s frequent requests to verify the authenticity of that document. As of Tuesday, no city officials had responded to a public records request we submitted on the matter.

Problems in Florida

According to The Tampa Bay Times, Florida Department of Transportation officials haven’t asked Conduent for money owed nor are they pursuing litigation.

Conduent CEO Ashok Vemuri is reportedly downplaying the problems in Florida and promised to obey all contractual commitments with the state at a mutually agreed timeline.

“What Vemuri didn’t mention was that the timeline has shifted multiple times,” according to The Tampa Bay Times.

“The original seven-year contract signed in November 2015 was designed to update Florida’s tolling system, scheduled for August 2017. But since FDOT and Conduent signed the original contract worth $287 million, it’s been amended 14 times, documents show,” the paper went on to say.

“Those changes between December 2015 and June 2018 included increasing the state’s contract payment to $343 million and providing more customer service staff to accommodate for the delay of the new system.”

State officials, the paper went on to say, repeatedly pushed back the deadline and increased its payment to Conduent.

“Typically, the state approved another contract amendment the same day Conduent was expected to launch its system update,” the paper reported.

“The original contract included a clause that if Conduent didn’t provide the system within the timeline that was agreed upon, then the state had the right to collect ‘liquidated damages’ from the company — in the form of $5,000 for each calendar day past the deadline that the system wasn’t ready.”

It’s been a year since the contract’s original August 2017 deadline, which means Conduent is possibly liable for at least $1.7 million in damages.”

Last year state officials created a timetable for Conduent to meet its obligation or pay up.

“But that contract amendment was never enforced, and four months later the state gave Conduent more time and more money,” the paper reported.

FDOT still isn’t ready to ask Conduent to comply with the terms of the agreement.

The problems have resulted in a backlog of at least 320 million toll charges for the state to process and unpredictable effects on drivers’ accounts, the paper reported.

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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to [email protected]

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