TxDOT terminates tollway operation contract with IBM, citing ‘numerous difficulties’ for customers

The Texas Department of Transportation announced Friday that it would terminate a tollway operation contract with New York-based tech giant IBM, citing “continued challenges” with the company’s newly implemented system for toll transactions.

TxDOT announced in 2019 that it had awarded the company a four-year contract to “develop, implement, host and maintain” software for the transactions, according to KXAN-TV.

The department manages toll lanes in Dallas-Fort Worth, including on Interstate 35E, Interstate 30 and Interstate 635.

The contract, which was announced after state lawmakers raised concerns related to the department’s billing system, had been planned to last until December 2022, according to the Austin TV station.

But Texas’ highway authority said Friday it was not satisfied with IBM’s system, which was rolled out about a year ago, and said the company’s software created “numerous difficulties” for customers.

“We take the responsibility of providing a quality and trusted customer experience very seriously, and regret the impact and inconvenience these past many months of lackluster IBM service have had on our toll road users,” TxDOT Executive Director Marc Williams said in a written statement. “We will continue to keep customers apprised on our progress to improve our customers’ interactions with TxTag. Our customers deserve better, and we are committed to ensuring that they receive that going forward.”

IBM said Friday in a written statement that it disagreed with TxDOT’s grounds for terminating the contract.

“The success of any information technology project depends on each of the participants fulfilling its obligations,” a company representative said in the statement. “IBM’s performance on this project has been hampered by the inability of TxDOT to do so. Despite TxDOT’s failure, IBM’s performance and the system IBM has implemented far exceed operational requirements anticipated when the contract was signed to the benefit of Texas motorists.”

TxDOT said the changes announced Friday will not affect TxTag customers, adding that the department is not charging late fees at this time.

“This is not a step we take lightly,” Williams said. “But it is the step we had to take now. We simply could not move forward in the current state.”

While the transportation department finds a new technology provider to replace IBM, it said it will work with SAP, a software company, through an emergency contract. TxDOT will also work with the Texas Department of Information Resources to manage its tollway operations.

“This will help ensure that the system provides customers accurate, timely and consistent account management, billing and payment capabilities that meet the highest levels of usability and security,” TxDOT said in a news release Friday.