25-0096_signed SSJF_Electronic Toll Collection Kapsch.pdf

Sole Source Justification Form

Version 7.01 Page 1 of 9

Bulletin Reference Number 25-557THA-BUSSY-B-48566

Requesting Agency/University Illinois State Toll Highway Authority

Sole Source Justification Form - Part I Section I - General Information

Department/Bureau/Section: Department of Business Systems

Need Identified Date: 05/23/2025 Supply/Service Need By Date: 11/01/2025

Project Title: Electronic Toll Collection Equipment and Services

Vendor: Kapsch TrafficCom USA, Inc.

Provide a description of the supplies or services required:

The Illinois Tollway is seeking a one-year sole economically feasible source contract for the purchase of 6C sticker tags and related equipment technology necessary to transmit electronic toll transactions from vehicles to the lane system host for further processing.

This contract will provide:

• 6C sticker tag purchases. 6C sticker tags are the most current form of transponder in-vehicle technology mounted to the windshield of vehicles to record and track tolling transactions.

• Next Generation Roadside Equipment purchases. Next Generation Roadside Equipment is the transponder reader technology which includes transponder/6C sticker tag readers, antennas, and all other related transponder technology. This equipment and technology enable transmission of toll transactions to the lane system host to ultimately collect toll revenue.

• Services include, as needed, repair and/or service of Next Generation Roadside Equipment as well as related project work necessary to upgrade equipment technology.

Value: Estimated Value of Initial Term, this Change Order or Amendment: 2,925,000

Will this Sole Source amend a Professional or Artistic Services contract? Yes No

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Type: New Sole Economically Feasible Source

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Bulletin Reference Number 25-557THA-BUSSY-B-48566

Requesting Agency/University Illinois State Toll Highway Authority

Section II - Proposed Term

One-Time Purchase Term Contract

Estimated Contract Begin Date: 11/01/2025

Estimated Contract End Date: 10/31/2026

Number of Potential Renewals: 0

Length of Each Renewal in Months: 0

Total Value of All Renewals: 0

If a Term Contract, does the term, including renewals, exceed 12 months? Yes No

Section III - Funding Source Select the type of funding to be used (Check all that apply): State Appropriate Funds Federal Funds Other (Explain):

The Tollway does not operate on State-appropriated funds. Procurements are funded through toll revenue.

Section IV - Sole Source Justification

This purchase is economically only available from a single source primarily because it is: (If "Other" explain in one sentence)

Compatibility of Equipment, Accessories, Replacement Parts or Service

Are there secondary justification(s) for this sole source? Yes No

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Bulletin Reference Number 25-557THA-BUSSY-B-48566

Requesting Agency/University Illinois State Toll Highway Authority

Section V - Purchase History

Has the Agency or University Purchased these supplies or services in the past? Yes No

Term Term From Term To Value Description Contract Number Type

1 11/01/2024 10/31/2025 2,962,000 Electronic Toll Collection Equipment and Services 24-0192 (P-73257) Sole Source

2 11/01/2023 10/31/2024 8,100,000 Electronic Toll Collection Equipment and Services 23-0145 (P-58384) Sole Source

3 11/01/2022 10/31/2023 9,200,000 Electronic Toll Collection Equipment and Services 22-0109 (P-42766) Sole Source

4 11/01/2021 10/31/2022 10,000,000 I-PASS Transponders and Transponder Equipment 21-0043 (P-30751) Sole Source

5 02/01/2017 10/31/2021 43,000,000 Transponder and Equipment Purchases 16-0138 (22039672) Sole Source

6 03/05/2012 01/31/2017 60,566,000 Transponder Purchases and Transponder-Related Equipment 12-0040 (22023253) Sole Source

7 09/30/2011 02/15/2012 5,000,000 Transponder Purchases 11-0196 (22022170) Sole Source

8 08/17/2010 08/16/2011 10,000,000 I-PASS Transponder and Equipment 07-0016 (22019679) Sole Source

9 08/28/2007 08/16/2010 30,000,000 I-PASS Transponder and Equipment 07-0016 (22019679) Sole Source

10 07/20/2004 08/27/2007 54,179,127 Transponders and Equipment 03-6528 Sole Source

If more than 10, or if other comments, explain:

09/01/2003-04/15/2004;$12,155,150; Transponders and Equipment; Sole Source 04/01/2003-08/15/2003; $ 3,691,500; Transponders and Equipment; Sole Source 10/01/2002-03/01/2003; $ 2,365,560; Transponders and Equipment; Sole Source 04/01/2002-09/30/2002; $ 2,650,056; Transponders and Equipment; Sole Source 05/01/2001-03/31/2002; $ 2,920,800; Transponders and Equipment; Sole Source

The Illinois Tollway became a member of the E-ZPass Group in 2004 to achieve economies of scale while enhancing services for I-PASS customers. The benefits of E-ZPass membership included toll interoperability for customers of all member agencies with the provision that each member agency use the same transponder technology. As a member of the E-ZPass Group, the Tollway is obligated to use vendors contracted via E-ZPass RFP award as the technology supplier of transponders and related equipment and services.

Section VI - Business Rationale

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Bulletin Reference Number 25-557THA-BUSSY-B-48566

Requesting Agency/University Illinois State Toll Highway Authority

1. Provide a detailed explanation of the need for the supplies or services:

In 2024, the Illinois Tollway transitioned from Time Division Multiplexing (TDM) transponder technology to 6C sticker tags. 6C sticker tags are the most current and cost-efficient transponder technology, and they are critical to the collection of toll revenue. This contract with Kapsch ensures the Tollway’s continued ability to purchase 6C sticker tags and related equipment and services (readers, antennas, etc.). Since March 2020, toll collection has been and will remain a 100% cashless operation which further necessitates this contract for 6C sticker tags and related equipment and services. In 2021, the Tollway completed a major project to upgrade transponder technology at all Tollway plazas and lanes systemwide to a more advanced multi-protocol reader. Multi-protocol readers widen the spectrum of possible transponder types and prepared the Tollway to issue 6C sticker tags and propel Illinois toward national interoperability. The Illinois Tollway is continuing its strategic initiative to replace traditional Time Division Multiplexing (TDM) transponders with 6C sticker tags as part of a systemwide modernization effort. As of mid-2025, more than 2.3 million of the Tollway’s

9.7 million I-PASS customers have already transitioned to the new 6C sticker tags through the agency’s multi-year replacement program, which will continue through 2026.

This transition delivers significant operational cost savings—reducing the unit cost of transponders from $6.90 to just $0.59 per sticker tag—while supporting a more scalable, lightweight, and efficient customer experience. The replacement program not only reduces hardware costs but also improves inventory management and supports future interoperability initiatives.

I-PASS electronic toll collection continues to be the Tollway’s most cost-effective solution for streamlining toll collection and improving customer service. The number of active I-PASS transponders issued to customers has grown to more than 9.7 million. The Tollway meets customer I-PASS transponder demands via retail sites. Transponder orders received by phone, mail, and through the Tollway’s website are filled by the Tollway’s transponder fulfillment services provider. The I-PASS program is ongoing; therefore, the business need requires the ability to continue an uninterrupted supply of I-PASS transponders to Tollway customers. Without this contract, the Tollway’s ability to continue purchasing I-PASS transponders would be jeopardized and the collection of toll revenue would be at risk.

The Kapsch contract ensures the Tollway’s ability to purchase 6C sticker tags and lane-related equipment and services (readers, antennas, etc.). This specific transponder technology is necessary for the Tollway to remain interoperable with the E-ZPass Group.

2. Provide a list and describe in detail the specifications required to satisfy the need:

The required goods and services include ongoing purchases for 6C sticker tags and related equipment and services which include readers, antennas, and related transponder technology. The contract scope also includes services, as needed, for repair and/or service of Next Generation Roadside Equipment as well as related project work necessary to upgrade equipment technology.

$2,135,000 6C sticker tag inventory for fulfillment of customer orders and ongoing transition

Next Generation Roadside Equipment to accommodate new technologies necessary to read sticker tags and accommodate the purchase of transponder technology on newly constructed plazas and lanes broken out as follows:

$ 499,600 Readers - transponder technology on newly constructed plazas and lanes 128,100 Lane Kits - transponder technology on newly constructed plazas and lanes 15,500 6C Programmers - necessary for programming sticker tags at tollway and fulfillment operations locations 20,600 6C Handheld Readers - necessary for reading sticker tags at tollway and fulfillment operations locations 126,200 Roadside equipment repair services as needed and related project work necessary to upgrade equipment technology $ 790,000 Total

$ 2,925,000 - Total estimated capital expenditures.

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Bulletin Reference Number 25-557THA-BUSSY-B-48566

Requesting Agency/University Illinois State Toll Highway Authority

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

To enhance services offered to I-PASS customers and to control costs, the Tollway became a member of the E-ZPass Group through an intergovernmental agreement established in 2004.

The E-ZPass Program is the largest, most successful interoperable toll collection program in the world. It consists of 38 toll agencies/ companies in 20 states, servicing more than 35 million customer accounts linked to 59 million transponders (which includes 6C stickers), over 4.2 billion E-ZPass transactions, and supports the collection of over $13.8 billion in annual electronic toll revenues of which over $6.1 billion is transferred between agencies through toll reciprocity programs. The benefits of the consortium allow customers to use their transponders on any other member agency toll road. Technically, this works because each member agency must use the same interoperable technology - transponders and transponder reader equipment. Historically, the E-ZPass Group has selected Kapsch as its transponder technology vendor via a competitively bid RFP, and that brand of transponder has been used to take advantage of interoperability among all member agencies. Upon award of the E-ZPass procurement, the sponsoring agency would execute a contract to the vendor who submitted the winning proposal. The Tollway would then proceed with procuring a sole economically feasible source contract.

To increase competition, the most recent RFP was written to allow multiple vendor awards. The E-ZPass Group, via sponsoring agency North Carolina Turnpike Authority (NCTA), has awarded to those qualified vendors providing technology that successfully completed certification testing. This will allow E-ZPass agencies to purchase best price from any of the awarded technology providers. At present, four vendors, Kapsch TrafficCom USA (“Kapsch”), TransCore LLP (“TransCore”), Star Systems International ("Star") and Neology Inc. have successfully completed certification testing and have executed contracts with North Carolina Turnpike Authority (“NCTA”).

Via this request, the Tollway is seeking approval to contract with Kapsch. The intent of this request is to contract via a sole economically feasible source procurement with Kapsch for one year until the Tollway has completed a multi-vendor solicitation via a Request for Qualification/Proposal process. The Tollway will then pursue contracts with the vendors who qualify.

Aside from transponders, Kapsch also provides support services for transponder reader technology installed throughout the Tollway's lane system. The Tollway has installed Kapsch technology and issued transponders manufactured by Kapsch since the inception of the I-PASS program.

Approval of this procurement will support the continuation of the I-PASS program by ensuring the provision of electronic toll collection equipment and services. Customers can purchase 6C sticker tags via phone, mail, or by visiting the Tollway website. Customers can also purchase 6C sticker tags in person at over 185 retail locations in the Chicagoland area, at five retail locations in the Rockford area, at the I-PASS business center in the Tollway’s Central Administration building in Downers Grove, and at three I-PASS kiosks at Tollway Oasis locations.

The Tollway is one of the largest electronic toll collection agencies in America. With 100% of tolls collected being electronic and revenue of $1.5 billion in 2024, the Tollway’s operations are predicated on the continuing use of transponder technology.

The impact of non-approval places the agency in breach of contract as it cannot meet the terms of its agreement with the E-ZPass Group. A condition of E-ZPass Group membership is using technology and equipment from the E-ZPass Group’s competitively selected vendors.

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

A condition of an E-ZPass Group membership is using approved uniform, standard transponder technology. At this time, Kapsch is one of four vendors currently contracted to provide transponders to all E-ZPass member agencies. Kapsch's pricing for the required transponder equipment and support services is lower in price then the other awarded vendors. As a member of the E-ZPass Group, the Tollway is obligated to use vendors selected as the technology suppliers of transponders and transponder reader equipment through an intergovernmental agreement. The benefits of the consortium allow customers of any member agency to use their transponders on any other member agency’s toll road. This works because each member must use the same interoperable type of transponders.

Additionally, due to patent considerations, transponders require compatible readers.

5. Has the Agency or University considered alternative supplies or services to satisfy their need? Yes No

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Bulletin Reference Number 25-557THA-BUSSY-B-48566

Requesting Agency/University Illinois State Toll Highway Authority

5a. If yes, name the alternative vendors whose supplies or services were evaluated:

Alternative vendors considered are TransCore, Star, and Neology who are contracted with NCTA after successfully responding to the E-ZPass RFP. We are proceeding with a sole economically feasible source procurement with theincumbent vendor, Kapsch, because they not only provide the required 6C stickers at best price, but also continue to deliver essential repair and maintenance (R&M) services that are integral to our operations. Kapsch installed and has provided service for roadside toll collection technology equipment (readers, antennas etc) since inception.

5b. If yes, what were the alternatives for each vendor and why were they unacceptable? Be specific with regard to features, characteristics, requirements, capabilities and compatibility:

While other certified vendors may offer lower unit pricing for the 6C stickers under the E-ZPass Group, determining the “lowest cost” must go beyond sticker pricing alone. For our agency, total cost includes the cost of the product and the associated costs of integration, testing, support, and long-term maintenance within our specific technical and operational environment.

Even among certified vendors, each product must be individually evaluated to ensure full compatibility and performance with our systems. This includes testing for interoperability, communication reliability, system latency, and other operational and environmental factors unique to Illinois Tollway. Introducing equipment that has not already been integrated into our environment would trigger additional implementation and engineering costs—costs that are not known until the product is acquired and tested.

To ensure we are selecting the vendor that provides the best overall value, not just the lowest unit cost, we would need to:

• Purchase and test each vendor’s equipment within our operational environment,

• Assess compatibility, reliability, and performance,

• Evaluate total cost of ownership, including integration, system updates, vendor support, and future maintenance.

These additional cost factors are not readily available without engaging in system testing and project planning across multiple teams, and thus make a traditional IFB approach impractical at this time. For these reasons, the incumbent vendor continues to represent the most economically feasible source for both product and ongoing R&M services under our current procurement framework.

5c. Explain how the market evaluation was conducted?

*This evaluation is to determine available options within a market. If the evaluation is to determine quality or best suited option, this is not the appropriate source selection. Under no circumstances shall the evaluation consist of testing alternative options. These activities must be conducted in a competitive transparent environment (i.e. IFB or RFP).

To increase competition, the most recent RFP was written to allow multiple vendor awards. The E-ZPass Group, via sponsoring agency North Carolina Turnpike Authority (NCTA), has awarded to those qualified vendors providing technology that successfully completed certification testing. This allows E-ZPass agencies to purchase the best price from any of the awarded technology providers. At present, four vendors, Kapsch TrafficCom USA (“Kapsch”), TransCore LLP (“TransCore”), Star Systems International ("Star") and Neology Inc. have successfully completed certification testing and have executed contracts with North Carolina Turnpike Authority (“NCTA”).

6. Are there resellers or distributors?

Yes No N/A

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

The prices were determined by responses to the RFP solicitation conducted by the E-ZPass Group in 2021. The procurement through the E-ZPass Group, via sponsoring agency NCTA, combines the buying power of 38 separate agencies to achieve volume discounts.

One of the main strategic and economic benefits of E-ZPass membership is the use of standardized technology to achieve interoperability. Additionally, to maximize competition and cost efficiencies, the RFP was written to allow multiple vendor awards. This will allow E-ZPass agencies to purchase best price from any of the awarded technology providers. The Tollway reviewed offerings and pricing for the product and services needed from the four contracted E-ZPass vendors (Kapsch, TransCore, Star and Neology); this one-year term and the pricing offered by Kapsch was lower.

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Bulletin Reference Number 25-557THA-BUSSY-B-48566

Requesting Agency/University Illinois State Toll Highway Authority

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

Yes No

8a. If yes, please provide details regarding future obligations and/or needs:

Without this sole economically feasible source contract, the Tollway could not supply transponders to its 9.7 million I-PASS customers.

This contract provides business continuity by ensuring the supply of I-PASS transponders and associated transponder technology.

This transponder equipment and technology enable transmission of toll transactions to the lane system host to ultimately collect toll revenue. The service needs related to repairs are minor; however, needs related to system upgrades are dictated by technical requirements and are therefore necessary and vital to continued operations. This contract is critical to electronic tolling systems and the technology provided ensures the resulting revenue collections. As a self-funded agency, the Tollway, its public stakeholders, and its bondholders rely on the revenue that is assured through the continued performance of its electronic tolling systems and technology. There is no economically or technically feasible alternative for an interim solution. A sole economically feasible source contract to continue supporting ongoing operations as well as the Move Illinois Capital Program and Bridging the Future Capital Program, is essential for the Tollway, its bondholders, the State of Illinois, and its citizens.

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

The impact of non-approval places the agency in breach of contract as it cannot meet the terms of its agreement with the E-ZPass Group. A condition of E-ZPass Group membership is using technology and equipment from the E-ZPass Group’s competitively selected vendors. Kapsch was one of four vendors selected via an E-ZPass Group RFP award, via sponsoring agency NCTA. Currently, Kapsch, TransCore, Star, and Neology have executed seven-year contracts with additional renewal options with the sponsoring agency NCTA.

The Tollway is one of the largest revenue-generating toll roads with the largest volume of electronic toll transactions in North America.

The transponder and related transponder reader equipment is a critical component to the business operation and for toll collection.

Transponders and transponder reader equipment are an absolute necessity for toll collection. Therefore, the approval of this sole economically feasible source procurement is critical to continue operations and mitigate the risk of revenue loss.

10. Is there any additional information you would like to add to justify this sole source?

As a self-funded agency, the Tollway, its public stakeholders, and its bondholders rely on the revenue that is assured through electronic tolling collection. There is no economically or technically feasible alternative for an interim solution. A sole economically feasible source contract to continue supporting ongoing operations is essential for the Tollway, its bondholders, the State of Illinois, and its citizens.

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Bulletin Reference Number 25-557THA-BUSSY-B-48566

Requesting Agency/University Illinois State Toll Highway Authority

Section VII

Requesting Department Representative

Requesting Department Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

Date

Printed Name Michael Catolico E-mail Address mcatolico@getipass.com

Phone Number 630-241-6800 x1849

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed)

E-mail Address EOccomy@getipass.com

Phone Number 630-241-6800 x4625 Date

Printed Name Eric Occomy

Agency Bureau/Division Head or University Purchasing Director and Not a Designee

SPO Approval and Signature Required

I have reviewed and understand the contents of this Sole Source Justification and agree with the State Agency or University determination.

I have reviewed and understand the contents of this Sole Source Justification and do not agree with the State Agency or University determination. As a result, the State Agency or University must explore other sourcing methods to satisfy their need.

State Purchasing Officer Signature Phone Number 217-720-6643 Date

Printed Name David Papp E-mail Address David.Papp@Illinois.gov

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Bulletin Reference Number 25-557THA-BUSSY-B-48566

Requesting Agency/University Illinois State Toll Highway Authority

Sole Source Justification Form - Part II Section I - General Information

Project Title Electronic Toll Collection Equipment and Services

Vendor Kapsch TrafficCom USA, Inc.

Initial Date of Procurement Bulletin Posting

Was a Sole Source hearing held per 30 ILCS 500/20-25?

Yes - Complete Section II and III below (Section II will only be visible when this option is selected)

No - Section II not required, go to Section III below Section III - CPO Approval and Signature Required

Based on my review, I authorize the Agency/University to proceed in accordance with the published Notice referenced above.

Based upon my review, I authorize the Agency/University to proceed with the following Changes.

Based on my review, the Agency/University is not authorized to proceed with this sole source as presented and my recommendation is that it be cancelled.

Other

CPO Signature CPO Phone 217-558-2231

Printed Name Ellen H. Daley Date

CPO E-mail Ellen.H.Daley@Illinois.gov

Version 7.01 Page of Sole Source Justification Form - Part I Section I - General Information Will this Sole Source amend a Professional or Artistic Services contract?

If yes, what was the original contract value?

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Section II - Proposed Term If a Term Contract, does the term, including renewals, exceed 12 months?

If yes, provide a detailed justification including any economic benefit received for agreeing to a multi-year term:

Section III - Funding Source Select the type of funding to be used (Check all that apply):

Section IV - Sole Source Justification Are there secondary justification(s) for this sole source?

Section V - Purchase History Has the Agency or University Purchased these supplies or services in the past?

Term Term From Term To Value Description Contract Number Type Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

2. Provide a list and describe in detail the specifications required to satisfy the need:

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

5. Has the Agency or University considered alternative supplies or services to satisfy their need?

5a. If yes, name the alternative vendors whose supplies or services were evaluated:

5b. If yes, what were the alternatives for each vendor and why were they unacceptable? Be specific with regard to features, characteristics, requirements, capabilities and compatibility:

5c. Explain how the market evaluation was conducted?

*This evaluation is to determine available options within a market. If the evaluation is to determine quality or best suited option, this is not the appropriate source selection. Under no circumstances shall the evaluation consist of testing alternative options. These activities must be conducted in a competitive transparent environment (i.e. IFB or RFP).

5a. If no, why weren't alternatives evaluated?

6. Are there resellers or distributors?

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

8a. If yes, please provide details regarding future obligations and/or needs:

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

10. Is there any additional information you would like to add to justify this sole source?

Section VII Requesting Department Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed) SPO Approval and Signature Required Sole Source Justification Form - Part II Section I - General Information Was a Sole Source hearing held per 30 ILCS 500/20-25?

Section II - Sole Source Hearing Details The State posted to the Illinois Procurement Bulletin a description of the State's need, the justification for the sole source decision, and information regarding the opportunity to submit comments and testify at a public hearing. Notice of the hearing was also posted outside of the hearing room 48 hours prior to the hearing.

The public hearing was conducted for the purpose of receiving testimony regarding the sole source determination. The Hearing Officer recommends the following:

The following relevant documents are attached:

Section III - CPO Approval and Signature Required 9.0.0.2.20101008.1.734229 Ellen.H.Daley@Illinois.gov

This contract will provide:

• 6C sticker tag purchases. 6C sticker tags are the most current form of transponder in-vehicle technology mounted to the windshield of vehicles to record and track tolling transactions.

• Next Generation Roadside Equipment purchases. Next Generation Roadside Equipment is the transponder reader technology which includes transponder/6C sticker tag readers, antennas, and all other related transponder technology. This equipment and technology enable transmission of toll transactions to the lane system host to ultimately collect toll revenue.

• Services include, as needed, repair and/or service of Next Generation Roadside Equipment as well as related project work necessary to upgrade equipment technology.

04/01/2003-08/15/2003; $ 3,691,500; Transponders and Equipment; Sole Source 10/01/2002-03/01/2003; $ 2,365,560; Transponders and Equipment; Sole Source 04/01/2002-09/30/2002; $ 2,650,056; Transponders and Equipment; Sole Source 05/01/2001-03/31/2002; $ 2,920,800; Transponders and Equipment; Sole Source

The Illinois Tollway became a member of the E-ZPass Group in 2004 to achieve economies of scale while enhancing services for I-PASS customers. The benefits of E-ZPass membership included toll interoperability for customers of all member agencies with the provision that each member agency use the same transponder technology. As a member of the E-ZPass Group, the Tollway is obligated to use vendors contracted via E-ZPass RFP award as the technology supplier of transponders and related equipment and services.

Q1Answer: In 2024, the Illinois Tollway transitioned from Time Division Multiplexing (TDM) transponder technology to 6C sticker tags. 6C sticker tags are the most current and cost-efficient transponder technology, and they are critical to the collection of toll revenue. This contract with Kapsch ensures the Tollway’s continued ability to purchase 6C sticker tags and related equipment and services (readers, antennas, etc.). Since March 2020, toll collection has been and will remain a 100% cashless operation which further necessitates this contract for 6C sticker tags and related equipment and services. In 2021, the Tollway completed a major project to upgrade transponder technology at all Tollway plazas and lanes systemwide to a more advanced multi-protocol reader. Multi-protocol readers widen the spectrum of possible transponder types and prepared the Tollway to issue 6C sticker tags and propel Illinois toward national interoperability. The Illinois Tollway is continuing its strategic initiative to replace traditional Time Division Multiplexing (TDM) transponders with 6C sticker tags as part of a systemwide modernization effort. As of mid-2025, more than 2.3 million of the Tollway’s 9.7 million I-PASS customers have already transitioned to the new 6C sticker tags through the agency’s multi-year replacement program, which will continue through 2026.

This transition delivers significant operational cost savings—reducing the unit cost of transponders from $6.90 to just $0.59 per sticker tag—while supporting a more scalable, lightweight, and efficient customer experience. The replacement program not only reduces hardware costs but also improves inventory management and supports future interoperability initiatives.

I-PASS electronic toll collection continues to be the Tollway’s most cost-effective solution for streamlining toll collection and improving customer service. The number of active I-PASS transponders issued to customers has grown to more than 9.7 million. The Tollway meets customer I-PASS transponder demands via retail sites. Transponder orders received by phone, mail, and through the Tollway’s website are filled by the Tollway’s transponder fulfillment services provider. The I-PASS program is ongoing; therefore, the business need requires the ability to continue an uninterrupted supply of I-PASS transponders to Tollway customers. Without this contract, the Tollway’s ability to continue purchasing I-PASS transponders would be jeopardized and the collection of toll revenue would be at risk.

The Kapsch contract ensures the Tollway’s ability to purchase 6C sticker tags and lane-related equipment and services (readers, antennas, etc.). This specific transponder technology is necessary for the Tollway to remain interoperable with the E-ZPass Group.

Q2Answer: The required goods and services include ongoing purchases for 6C sticker tags and related equipment and services which include readers, antennas, and related transponder technology. The contract scope also includes services, as needed, for repair and/or service of Next Generation Roadside Equipment as well as related project work necessary to upgrade equipment technology.

$2,135,000 6C sticker tag inventory for fulfillment of customer orders and ongoing transition

Next Generation Roadside Equipment to accommodate new technologies necessary to read sticker tags and accommodate the purchase of transponder technology on newly constructed plazas and lanes broken out as follows:

$ 499,600 Readers - transponder technology on newly constructed plazas and lanes 128,100 Lane Kits - transponder technology on newly constructed plazas and lanes 15,500 6C Programmers - necessary for programming sticker tags at tollway and fulfillment operations locations 20,600 6C Handheld Readers - necessary for reading sticker tags at tollway and fulfillment operations locations 126,200 Roadside equipment repair services as needed and related project work necessary to upgrade equipment technology $ 790,000 Total

$ 2,925,000 - Total estimated capital expenditures.

Q3Answer: To enhance services offered to I-PASS customers and to control costs, the Tollway became a member of the E-ZPass Group through an intergovernmental agreement established in 2004.

The E-ZPass Program is the largest, most successful interoperable toll collection program in the world. It consists of 38 toll agencies/companies in 20 states, servicing more than 35 million customer accounts linked to 59 million transponders (which includes 6C stickers), over 4.2 billion E-ZPass transactions, and supports the collection of over $13.8 billion in annual electronic toll revenues of which over $6.1 billion is transferred between agencies through toll reciprocity programs. The benefits of the consortium allow customers to use their transponders on any other member agency toll road. Technically, this works because each member agency must use the same interoperable technology - transponders and transponder reader equipment. Historically, the E-ZPass Group has selected Kapsch as its transponder technology vendor via a competitively bid RFP, and that brand of transponder has been used to take advantage of interoperability among all member agencies. Upon award of the E-ZPass procurement, the sponsoring agency would execute a contract to the vendor who submitted the winning proposal. The Tollway would then proceed with procuring a sole economically feasible source contract.

To increase competition, the most recent RFP was written to allow multiple vendor awards. The E-ZPass Group, via sponsoring agency North Carolina Turnpike Authority (NCTA), has awarded to those qualified vendors providing technology that successfully completed certification testing. This will allow E-ZPass agencies to purchase best price from any of the awarded technology providers. At present, four vendors, Kapsch TrafficCom USA (“Kapsch”), TransCore LLP (“TransCore”), Star Systems International ("Star") and Neology Inc. have successfully completed certification testing and have executed contracts with North Carolina Turnpike Authority (“NCTA”).

Via this request, the Tollway is seeking approval to contract with Kapsch. The intent of this request is to contract via a sole economically feasible source procurement with Kapsch for one year until the Tollway has completed a multi-vendor solicitation via a Request for Qualification/Proposal process. The Tollway will then pursue contracts with the vendors who qualify.

Aside from transponders, Kapsch also provides support services for transponder reader technology installed throughout the Tollway's lane system. The Tollway has installed Kapsch technology and issued transponders manufactured by Kapsch since the inception of the I-PASS program.

Approval of this procurement will support the continuation of the I-PASS program by ensuring the provision of electronic toll collection equipment and services. Customers can purchase 6C sticker tags via phone, mail, or by visiting the Tollway website. Customers can also purchase 6C sticker tags in person at over 185 retail locations in the Chicagoland area, at five retail locations in the Rockford area, at the I-PASS business center in the Tollway’s Central Administration building in Downers Grove, and at three I-PASS kiosks at Tollway Oasis locations.

The Tollway is one of the largest electronic toll collection agencies in America. With 100% of tolls collected being electronic and revenue of $1.5 billion in 2024, the Tollway’s operations are predicated on the continuing use of transponder technology.

The impact of non-approval places the agency in breach of contract as it cannot meet the terms of its agreement with the E-ZPass Group. A condition of E-ZPass Group membership is using technology and equipment from the E-ZPass Group’s competitively selected vendors.

Even among certified vendors, each product must be individually evaluated to ensure full compatibility and performance with our systems. This includes testing for interoperability, communication reliability, system latency, and other operational and environmental factors unique to Illinois Tollway. Introducing equipment that has not already been integrated into our environment would trigger additional implementation and engineering costs—costs that are not known until the product is acquired and tested.

To ensure we are selecting the vendor that provides the best overall value, not just the lowest unit cost, we would need to:

• Purchase and test each vendor’s equipment within our operational environment,

• Assess compatibility, reliability, and performance,

• Evaluate total cost of ownership, including integration, system updates, vendor support, and future maintenance.

These additional cost factors are not readily available without engaging in system testing and project planning across multiple teams, and thus make a traditional IFB approach impractical at this time. For these reasons, the incumbent vendor continues to represent the most economically feasible source for both product and ongoing R&M services under our current procurement framework.