WH&LA Capitol Insider: SIS (Blue Highway Signs) Developments

SIS (Blue Highway Signs) Developments

February 6, 2014

Dear WH&LA Lodging Member:

Quite a few members have contacted us over the past few days regarding information they received from the current vendor servicing and selling logo blocks on the state's Specific Information Signs (SIS), also known more informally as the blue highway signs. The vendor has presented their views to many of you regarding recent bidding with the state, which is still a work in progress, and has called for action from the reader to challenge the actions.

WH&LA has contacted the state Department of Transportation (DOT), the agency with oversight over the program, to obtain facts on the process of bidding for these signs, and what is the status and potential impact on lodging and other tourism businesses that purchase the blocks.

SIS Bidding Process

While the current vendor selling ad blocks and servicing the blue signs has had an ongoing contract with the state for well over 20 years, with multiple extensions allowed to the original contract, the state has a limit on the duration of such contracts that has nothing to do with vendor preferences - this is a state procurement requirement. The current contract hit the maximum extensions, which means the state DOT had to go through an official Request For Proposal (RFP) process, allowing the current and other potential vendors the opportunity to provide a bid. It is important to note up front that the state does not receive payments from this program, with the focus more on providing valued information and services to drivers, and helping them to find local tourism businesses.

In the proposal requirements, the DOT included numerous criteria to be considered, such as potential ad pricing, experience with this or similar services, service capabilities, the company's projected plans for continuance and expansion of this program, marketing & sales strategies, state reporting methods, etc.

In the procurement process, vendors are ranked on their responses to the criteria, with the vendor scoring the highest given a Letter of Intent to award the contract. Once the vendors are notified, the DOT begins to negotiate the fine details with the highest scoring vendor, and if the negotiations are successful, the state can then enter into a contract with this vendor. The state Department of Administration (DOA), has the authority, should there be complaints filed on the process, to evaluate the process followed to determine if the agency followed state procurement rules in their evaluation and determination. Their role, as we understand it, is not to arbitrarily make another choice, but to ensure the agency acted in good faith in following the required state procurement process. If they find the agency did not, then a re-evaluation would need to take place. If they find due process was followed, the state agency continues with negotiation and contracting.

In the case of the SIS program, a new vendor was awarded the Letter of Intent. The DOT has not yet begun their negotiations with the new vendor, and thus no fees are finalized. We have learned that the current vendor has filed an official Protest on the Letter of Intent decision.

What we can share with you at this time

When the protest was sent by the current vendor to the DOT following issuance of the Letter of Intent, the Secretary of the DOT reviewed the process followed and issued a memo addressing each specified concern, noting that the protest did not show any grounds to justify or require a change of award. The current vendor is now seeking review by the DOA to pursue an overturning of the decision on the Letter of Intent.
The DOT is officially unable to share fine details (including projected pricing) at this time, due to the petition filing, until a decision is reached, at which time they will issue a press release, and they have advised that they will also notify WH&LA.
Any pricing that has been quoted from anyone other than the DOT is not substantiated.
The DOR has committed that the terms of all existing contracts for the SIS program will be honored until they expire (depending on each contract, this can be up to 3 years), without any price changes, regardless of the outcome.
This process was an RFP, meaning that instead of a Request For Bid (RFB), where the winning bid becomes the terms of the contract, the terms still have to be finalized during negotiations that occur after the Letter of Intent. Thus the projected pricing was not the primary consideration in selecting the intended vendor.
The state currently does not require an in-state vendor for contracted services.
The DOT is keenly aware of the need to keep pricing as reasonable as possible for Wisconsin's businesses, and there is no incentive for them to do otherwise. We have reinforced our industry's concerns as they work through negotiations.

The current status is there will be an internal review by the DOA on the following of due process. Individual citizen preferences, unless they contained specific knowledge that due process was not followed, would likely not apply.

The WH&LA will provide any further details as they are publicly released.