Xerox Sues New Hampshire Over Outsourcing Contract

Xerox has brought a lawsuit against the state of New Hampshire after the outsourcer lost a bid to handle the backend of New Hampshire’s electronic toll collection system, known locally as E-ZPass.

The complaint comes after New Hampshire awarded the $51.9 million contract to Cubic Transportation Systems Inc. Xerox says Cubic does not have much experience in handling the job and has not handled such a job since the past 20 years.

The lawsuit seeks to prevent New Hampshire Transport Department and Cubic from implementing the contract, and declare that the contract is void. Xerox claimed in the court, According to Courthouse News, that New Hampshire acted in bad faith.

Xerox handled the backend of New Hampshire’s E-ZPass operations since the inception of the state’s electronic toll collection system in 2004.  Xerox operates the backend of as many as 13 other public transport agencies across the United States.

In its complaint, according to Courthouse News, the outsourcing firm claimed that it used a proprietary software suite called Vector to manage New Hampshire’s E-ZPass accounts, distribute transponders, enforce violations, coordinate with other states and handle all customer service for nearly 75 million NH E-ZPass transactions a year.

According to the complaint filed with the Merrimack County superior court, Cubic overbid Xerox by $6.9 million, but New Hampshire allowed Cubic to revise its bid. Still, Cubic exceeded Xerox’s bid by approximately $3.6 million.

In New Hampshire’s evaluation of bidders, Cubic scored higher points than Xerox. “While Xerox did 9.2 points better than Cubic on price, New Hampshire found that Cubic did 9.9 points better than Xerox on tech,” the Courthouse News reported.

Xerox questions how New Hampshire arrived at that conclusion since it says Cubic has never provided electronic toll collection services before and lacks the necessary software suite.

Xerox says Cubic will also gain access to information about Xerox’s propriety software, thus achieving an unfair competitive advantage. Cubic, according to the state’s transportation department, will bring about 50 jobs to the state by launching a call center in Concord.

Accenture objected when Xerox won similar contract in the state of Florida. But in October this year, an administrative law judge upheld the state’s award of the contract to Xerox.