Signal company

Traffic Sign Company Hires MDOT Manager, Wins State Contract

LANSING — The Michigan Department of Transportation has made a major change in the provision of its traffic signal control equipment, just as its former manager has taken a senior position at the company that benefits from the change.

MDOT purchased all of its traffic signal control equipment and software from Siemens Mobility, Inc.

But that changed last October, the same month Kirk Steudle, who for the previous 12 years led the department, was named senior vice president of Econolite Systems, Inc., a California-based competitor to Siemens.

On October 3, 2018, the state agency changed its specifications to allow the purchase of traffic light controllers supplied by Econolite in addition to those manufactured by Siemens, a German multinational with offices in the United States.

On Oct. 22, Econolite issued a press release saying it had hired Steudle, who announced last September that he would step down from state government on Oct. 31.

And last Tuesday, the state board approved a $2 million contract to buy a central traffic light control system from Econolite, which beat out Siemens and two other companies. Tuesday’s allocation is the first phase of a much larger planned purchase that could amount to tens of millions of dollars.

The series of events involving Steudle and his new employer raises serious questions for a national advocate for government ethics reform, who says the transactions show that if Michigan is to maintain public trust in its government, it must joining many other states in restricting how top state officials can access jobs in the private sector.

“The optics are terrible,” said Paul S. Ryan, vice president of policy and litigation for Common Cause, a Washington, D.C.-based group that lobbies for government ethics and campaign finance reform. .

Steudle did not respond to messages seeking comment.

Jeff Cranson, a spokesman for MDOT, said he didn’t know when Steudle first had contact with Econolite about going to work for the company. He said Steudle was aware that an assessment was underway in 2018, which began in August 2017, to modify the MDOT specifications to allow for the purchase of controllers other than those supplied by Siemens. But Steudle had no role in the decision to add Econolite controllers to the spec as the only other approved option, nor did he approve of the decision, he said. MDOT officials did not discuss with Steudle the request for proposals that resulted in the contract awarded last week, he said.

Michigan is consistently ranked among the worst states in the nation for open government, ethics, and conflict of interest laws. For example, there’s no “cooling off” period or “revolving door” law preventing top officials like Steudle from seeking contracts involving their former agencies.

“It’s important to have a revolving door restriction to prevent the public from losing faith in their government and thinking that public servants are personally benefiting and getting preferential deals for their new employers,” Ryan said.

Steudle, who worked 31 years for MDOT and served as a director under both Democratic and Republican governors, is listed as one of the key personnel in the Econolite proposal. He also signed the company’s detailed proposal cover letter.

“We look forward to your favorable review of our proposal and the opportunity to demonstrate our solution and show that it provides the best path forward for MDOT,” Steudle wrote to the state procurement department this spring on 31 may.

Michigan law stipulates that state legislators who resign from office are prohibited from lobbying for the remainder of their terms. But it imposes no restrictions on lawmakers when it comes to non-lobbying jobs, and it also has no restrictions or time limits on when and where senior appointed officials such as Steudle, who has not registered as a lobbyist with Econolite, can go to work.

Eric Raamot, Econolite’s chief technology officer, would only say that the company responded to a very transparent open bidding process.

“We are competing nationwide on similar projects with many of the same companies and look forward to bringing a state-of-the-art advanced traffic management system to Michigan,” Raamot said.

At least 18 states have laws or rules that would have prevented Steudle from seeking a state contract involving his former agency, according to a summary compiled by the National Conference of State Legislatures.

In Louisiana, for example, former agency heads cannot become involved in transactions involving their former agencies for two years after leaving state employment.

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Ryan said the case involving Steudle also underscores the need for restrictions or bans on state government officials negotiating their next private sector job while remaining on the payroll of their jobs in the public sector. Based on the timeline, it appears to have happened in this case, he said.

The MDOT has nearly 3,200 traffic lights, many of which are located along state roads that become major arteries in the city, such as Woodward Avenue (M-1) in Detroit.

Each traffic light has its own controller, which is in a cabinet attached to the lamp post. Currently, approximately 500 state traffic lights are monitored and managed remotely through an existing central control system, provided by Siemens. Now the state wants a central system with more remote capabilities than the current system.

The state’s request for proposals, released in April, called for a new central control system for 280 traffic lights that would be compatible with controllers supplied by Siemens or Econolite. The state is working on a separate request for proposals for controllers and plans to buy those supplied by Econolite or Siemens, or a mix of the two, according to state records.

The four proposals received by the state to provide a control system were scored by a four-member evaluation committee consisting of two employees from MDOT and two from the Department of Technology, Management and Budget (DTMB) . The committee first evaluated the proposals on technical issues, such as the qualifications of their key personnel and their understanding of the scope of services required. Only companies that exceeded a certain threshold during the technical evaluations were able to move on to the second phase of evaluation — the price.

According to records obtained by the Free Press under Michigan’s Freedom of Information Act, Siemens and another company, Missouri-based TransCore, were found to have failed technical requirements and their bid prices n have not been taken into account.

Only Econolite and Kimley-Horn, which has an office in Livonia, scored high enough in the technical evaluations for their offer prices to be considered. Econolite scored higher in the technical evaluation and was selected with a price of $1.98 million, compared to Kimley-Horn’s $3.9 million bid, records show.

Econolite fared much better than Siemens on the technical evaluation, despite the fact that some of the weaknesses identified in the two companies’ proposals were similar.

For example, Siemens “seemed to only want to use Siemens controllers,” the reviewers wrote. He promised he could have a system compatible with Econolite controllers within six months, but gave “no plans or details on how…that would happen”.

Econolite “strongly favored its own brand of controller, but strove to use MDOT’s other preferred controller,” the reviewers wrote.

Cranson, the MDOT spokesman, said there have been performance issues with the Siemens software, including timing issues with coordinating various traffic lights, data transmission issues, and glitches adding new intersections to the Siemens software database.

Siemens spokeswoman Elizabeth Cho said the company was “surprised to learn of performance issues with our MDOT controllers.”

“We were never asked for new features or any indication of dissatisfaction with their performance,” Cho said.

Most direct interaction with the state regarding Siemens products has been through its former distributor, Carrier & Gable, Inc. of Farmington Hills, which has now partnered with Econolite, Cho said. A call to Carrier & Gable was not returned on Friday.

“Siemens Mobility Controllers have been the controller of choice for Michigan for the past 15 years – and are now installed in approximately 90% of all intersections in the state, largely due to their reliability and technology. proven in the future,” Cho said. .

“These controllers are also successfully installed in nearly every state in the United States, helping to provide more efficient journeys for hundreds of millions of drivers.”

Cho declined to comment on the bidding process or whether the company had any concerns about Steudle’s role in the specification change and subsequent contract award.

Cranson said the department, through DTMB, would have requested bids for new equipment and software regardless of where Steudle went to work.

The department is now headed by Paul Ajegba, another MDOT veteran.

“All signals would benefit from remote management, so when existing equipment is replaced, it makes sense to use the best technology,” Cranson said.

“There are myriad benefits to managing signals remotely and not having to send a maintenance person, especially to a remote location every time a signal malfunctions,” he said. he declares.

“Think of it in terms of monitoring your home’s heating, plumbing, electrical, or security system when you’re on vacation.”

Many Michigan local governments, such as Ann Arbor, are heavily invested in Siemens traffic light technology.

“The City of Ann Arbor uses Siemens technology for our traffic control systems and there are no plans to change that,” city spokesman Robert Kellar said Friday. “As for the impact of the MDOT decision on us, it is difficult to speculate on it and we will have to see how things develop.”

Contact Paul Egan: 517-372-8660 or [email protected] Follow him on Twitter @paulegan4. Learn more about Michigan politics and sign up for our election newsletter.