Traveling from Trenton to New York City on an NJ Transit train yesterday, in a train car that was at least 95 degrees (the AC was broken), and on an express train that was “stuck” behind a local, I was reminded of an RFP our firm was invited to participate in last week.

At first I thought the NJ Transit RFP for “Telecom Bill Audit and Recovery Services” was an example of a state government finally trying to get control of expenses. Telecom audits, which typically include both a recovery aspect (getting credits for lines that should have been disconnected, as well as other mis-billings) and infrastructure optimization (disconnecting unused lines/circuits, changing services, etc) are a great way to reduce overall telecom costs.

However, I quickly overcame my optimism when I saw the 100 + page hard-copy RFP and associated documentation that was mailed to us via USPS Priority Mail. Ever hear of e-mail?

My disappointment was compounded after I read through the document. I couldn’t possibly address every issue in one blog post, but by far the biggest was the extremely limited scope of work that NJ Transit establishes in the RFP. As detailed in Addendum 2:

“Identifying services that should have been disconnected but are still being billed are naturally a part of this effort and credits or refunds to the consultant are eligible from the date the disconnect was proven to be issued. There is no compensation for future savings nor is this a “traffic engineering” RFP.”

In other words, finding lines that are no longer active, issuing a disconnect, and verifying the new prices, are not part of the scope of work. In fact, neither are other simple changes that could be identified when analyzing this type of data, such as moving to unlimited long distance lines where it makes sense.

So what is in the scope of work? Getting credits for mis-billings, most of which occur when a company issues a disconnect order and the carrier fails to terminate the line and/or the subsequent billing.

Substantial savings are to be gotten in this arena, however it assumes that the provider will have access to proof that a disconnect was requested by the customer. In many cases, this data is not available, or can only be found by searching through the email of the person that issued the disconnect. Is NJ transit going to allow their provider to rummage through email records for this information? Not likely.

Of course, if disconnect orders are readily available, a provider can go back and request credits. But getting the carriers to actually issue credits for past billings (in this case up to 6 years worth) could take several months, and the impact will only be seen once.

The long term impact for any company (or even a government entity!), is in identifying unused lines, issuing (or re-issuing) disconnects, following through to verify the disconnect happens, and validating it on the next bill. The impact is immediate and invoice amounts can be reduced substantially in a relatively short amount of time.

Since NJ Transit is excluding any compensation to the providers for that service, they awarded bidder certainly won’t be doing it. Will NJ Transit do it internally? Well, they haven’t in the past (hence the audit) so they likely won’t be doing it in the future either. A real cost savings opportunity goes absolutely untouched.

New Jersey – your state is on the verge of budgetary collapse. Your schools are not properly funded, your infrastructure is crumbling, and most importantly, $25 is excessive for an on-peak round trip to NYC. This RFP will not produce sustainable long term results, in fact, it is counterproductive. The companies that will respond to it are likely to take any job, and the provider you end up with will achieve little or nothing. The concept was great, reduce telecom costs, but the follow through absolutely killed it.

If one good thing came out of this proposal, it’s that the “Contract Specialist” that issued the RFP can demonstrate they spent a lot time writing a 100+ page document that makes absolutely no business sense and will achieve the little or nothing. Our government’s finest, hard at work.
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Joe Payne

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