A Chicago Transit Board committee is set to vote on a $41 million contract on Friday that could overhaul the agency’s bus fare box system for the next 20 years, but a bidder and some alderpersons are calling into question the bidding process that they say potentially gave some companies an unfair advantage.
A request for proposals was first issued as a joint procurement between CTA and suburban bus system Pace that called for the replacement of both agencies’ bus fare box systems.
But Genfare — an Elk Grove Village-based provider of fare collection for transit systems in the United States and Canada — said it was blindsided when CTA’s purchasing department sent a letter saying both agencies would negotiate separately.
The cascading effect of that notice allowed Pace to approve its contract months ahead of CTA and publish the amount of the contract, which Genfare and its partner, Lyons View Manufacturing, was awarded. This, the companies said, put them at a disadvantage with the CTA bid because other companies could undercut them on cost.
The potential decades-long contract is up for approval in the Chicago Transit Board’s Committee on Finance, Audit and Budget on Friday. CTA declined to comment because the procurement was still active and said that in order to keep the process fair, details around potential contracts had to stay confidential.
Pace didn’t respond to a request for comment.
In 2020, CTA and Pace put a call out for a request for proposals to replace both bus fleets’ fare box systems, including manufacturing, installing and maintaining of the new boxes for five years, with options to extend the contract another five years up to three times.
A spokesman for Genfare told the Chicago Sun-Times it was always known that the request for proposals would bear two different contracts — one with CTA and one with Pace — but in the last two years the two transit agencies have been working in tandem. That is until they no longer were.
The deadline to submit bids ended March 31, and on that day CTA notified bidders the two agencies would be proceeding independently on all remaining negotiations.
On April 10, Pace published its board meeting agenda for an upcoming meeting on its website and publicly disclosed the amount to be awarded to Genfare and its partner Lyons View — a minority-owned business based on the West Side.
Pace disclosed publicly that Genfare and Lyons View were awarded a $16.5 million contract five weeks before best and final offers were supposed to be delivered to CTA.
The spokesman for Genfare and Lyons View contends this put them at a disadvantage as other bidders could see what they bid and “reengineer” their bid to undercut Genfare with the CTA contract.
A German-based company is in line to win the CTA contract, the spokesman said.
“We’ve been an Illinois-based manufacturing firm for all of our 42 years in business,” Genfare President Eric Kaled said. “We use 165 suppliers in the state that collectively employ more than 10,000 Illinois-based residents. This contract would not only benefit CTA and its riders, it would also strengthen the Illinois economy.”
Josh Davis, president of Lyons View, said it was “heartbreaking” to see the contract potentially awarded “to a foreign company with no ties to Chicago.”
“This contract would be a source for well-paying careers with health insurance, 401(k), PTO, and profit sharing in the Black community,” Davis said. “Our team’s proposal offered CTA the best value and supported the mayor’s INVEST South/West initiative.”
Ald. Jason Ervin (28th) told the Chicago Sun-Times in an email that he also shared some reservations over the bidding process.
“I’m concerned that the bidding process unfairly penalized Genfare and have communicated my concerns to CTA leadership directly,” Ervin said. “I trust they will proceed with caution in this matter given the impact this decision will have on local businesses on the West Side.”
The issues with the procurement process also drew the attention of Ald. David Moore (17th) who is the vice chairman of the City Council’s Contract Oversight and Equity Committee.
Moore sent a letter to CTA President Dorval Carter Jr. stressing his concerns and expressed his desire to see “a pause in this solicitation so that CTA can thoroughly review the procedure and process.”
“If the review identifies any inconsistencies or irregularities in how the respondents’ submissions were evaluated, we request the procurement be discontinued and a new solicitation commenced,” Moore said in the letter obtained by the Sun-Times. “These actions will be consistent with your commitment to transparency and maintaining credibility in the procurement process.”
