New tolling system primarily delayed by vendor issues, not state project management, audit finds

Dec 6, 2022

OLYMPIA – Although the Washington State Department of Transportation experienced delays and cost overruns as it developed a new tolling system, the agency followed state requirements and many leading practices, according to a new performance audit by the Office of the Washington State Auditor.

The vendor that the Department's Toll Division hired struggled both to meet government requirements for documentation and to follow the state's approach to software development, auditors found. Additionally, the vendor found it difficult to keep the two-phase project fully staffed and to meet the Toll Division's requirement that a project manager be located in Washington.

The Department delayed launching the new tolling system at least eight times, until July 2021, by which time the total cost for Phase 1 had increased from $30 million to $43 million. Auditors found the Toll Division was effective in seeking compensation from the vendor, ultimately assessing more than $10 million in liquidated damages.

“Multiple delays in the state's tolling projects have frustrated the public,” said State Auditor Pat McCarthy. “This audit shows the Department has improved tolling project management, but there is still more it can do. We make recommendations that include being more transparent about the full costs of such large projects.”

The performance audit released today was requested by the Legislature, which became concerned about the delays and cost increases. Auditors noted the true cost of delays will not be known for some time, because some parts of the new system were moved to Phase 2 of the project. And they found that the Department could have been more transparent about its overruns.

While the Department did follow state requirements, its project reports did not reflect the full cost of delays or the total project. For example, the Department gave the Legislature quarterly reports on project progress, but those reports focused on steps completed; they did not contain a budget-to-actual comparison of total project costs.

Summary material of the report can be found on the State Auditor's Office website here, and the full report is here.

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