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TO: |
Board of Trustees |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Viola Miller, Chief Financial Officer |
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PRESENTER(S): |
Kensey Kunkel, Special Project Manager |
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TITLE:
title
Contract: FAREPAY Service Contract (Interactive Communications International, Inc.)
end
AGENDA ITEM TYPE:
Procurement Contract/Change Order
RECOMMENDATION:
Approve and authorize the Executive Director to execute contract 25-03937 and associated disbursements with Interactive Communications International, Inc. (InComm)to distribute, sell, load, and/or reload UTA FAREPAY cards within InComm’s merchant distribution network in the amount of $412,747 for a three (3) year term.
BACKGROUND:
InComm has been a valued partner and prepaid card (FAREPAY) manager for over a decade. InComm was awarded a prepaid card program management contract in June 2013. Since 2013:
• InComm has built a retail network of more than 400 merchants at various locations in UTA’s service district.
• InComm hosted and supported critical back-office systems so that riders could purchase FAREPAY cards used to electronically pay their transit fares. InComm also managed the integration to UTA's Electronic Fare Collection (EFCX) system so that UTA’s Electronic Fare Collection (EFC) validators appropriately accepted or rejected these cards as fare payment.
• InComm managed the individual card balances for nearly 211,000 FAREPAY accounts. InComm and UTA worked closely to purchase and provide physical cards for all of these accounts.
As part of the Next Generation Fare Collection Project, Scheidt and Bachman (S&B) will assume responsibilities previously owned by InComm. However, InComm will remain a vital asset to the success of UTA’s new Fare Collection System. This includes:
• InComm and S&B will migrate all 211,000 FAREPAY accounts into the new S&B-hosted back-office. This will allow the customers to continue to utilize their existing fare media and accounts with no interference.
• S&B will partner with InComm to manage the card balances and to provide a real-time data integration with the new S&B back-office.
• InComm will continue to assist UTA in providing the physical card media that riders use to pay their fare, as well as continue to manage our retail merchant network where these cards can be purchased, loaded, and reloaded with funds.
DISCUSSION:
To avoid the substantial duplication of costs described below, UTA should enter the sole source contract with InComm for a three (3) year term beginning January 1, 2026. Our riders will benefit from this strategy because UTA will not unnecessarily subject them to inconveniences associated with a new FAREPAY provider before UTA transitions to its new electronic fare collection system.
UTA will continue to pay fees through a service agreement to InComm. When a customer purchases a new card or loads value onto an existing card through the InComm retail network, the money is sent directly to InComm. InComm keeps a portion of the proceeds and remits the remainder to UTA. UTA does not issue a payment to InComm.
Beginning in 2026, the fee will be 5% per card loaded and $1.00 per card activation. This is estimated to be $412,747 over a three (3) year term ($137,582 per year). Currently, UTA pays InComm $20,000/month in addition to 7% in Fees and $3.00 per card activation.
CONTRACT SUMMARY:
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Contractor Name: |
Interactive Communications International, Inc. |
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Contract Number: |
25-03937 |
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Base Contract Effective Dates: |
January 1, 2026 - January 1, 2029 |
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Extended Contract Dates: |
N/A |
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Existing Contract Value: |
N/A |
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Amendment Amount: |
N/A |
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New/Total Contract Value: |
$412,747 |
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Procurement Method: |
Sole Source |
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Budget Authority: |
Approved 2025 Operating Budget |
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ALTERNATIVES:
There are no reasonable or affordable alternatives. This pre-paid card and retail network aspect of InComm’s statement of work is outside the scope and capability of NextGen contractor, S&B.
If a new contractor were to be brought in to perform this work, UTA anticipates the following low and high cost estimates for the following activities:
• Partner with and equip retail merchant network (400 merchants) - Unknown Cost
• Recard all FAREPAY customers (211,000 active accounts) - $1.37 to $1.69 million
• Retrain all operations groups (Fares, Customer Service, etc.) - $32,000 to $163,000
• Ongoing monthly support of new system for 5 years - $624,000 to $2.43 million
Total estimated cost for the above replacement activities: $2.02 - $4.28 million.
• Very little confidence that this work could be completed before InComm contract expires in December 2025
• If deadline is not met, then this will have implications on the back-office integration by S&B as part of Phase 3 of the Fare Collection Replacement Project
• Excluded from these cost estimates are the costs to partner with and equip a retail merchant network
• There may be unknown fees associated with S&B’s ability to integrate with a new vendor
FISCAL IMPACT:
Estimated $412,747 in expenses over the next three (3) years or $137,582 per year. All FAREPAY funds go directly to InComm, they reduce the amount by their commission of 5%, then remit the balance as payment to UTA.
InComm’s fee expense is accounted for through a contra revenue account.
ATTACHMENTS:
• Contract: FAREPAY (InComm) Service Contract