‘Charlie’ firm gets a free ride: T skips bid process, picks ex-employee’s company to launch new smart card

By SUE REINERT
The Patriot Ledger

A Plymouth company founded by a retired MBTA employee is being paid more than $680,000 to help the T roll out its new fare card next month.

Fareways Inc. has been running the transit agency’s online monthly pass system since 2003, when the company won a $262,074 contract by submitting the lowest of three bids, spokesman Joseph Pesaturo said.

But the T did not ask for bids this June before choosing Fareways to help distribute and service the Charlie Card, a permanent plastic ‘‘smart card’’ that the T hopes will replace single-ride fares starting next month. The card is the linchpin of the T’s new automated fare collection system.

Fareways was awarded a six-month contract for $687,000 to allow riders to add value to their Charlie Cards online or at retail stores in a pilot program.

The president of Fareways, Jeremiah J. Cronin, retired in February 2001 as supervisor of revenue sales in the T department that developed the automated fare collection system.

He earned $48,681 before he retired, Pesaturo said. An employee of the MBTA Retirement Fund said the agency does not disclose information about retirees’ pensions.

The company’s Web site says it was founded in 2002 ‘‘by retired (MBTA) Information Technology and Revenue professionals.’’ Besides Cronin, other staff members listed on the Web site are not MBTA retirees, Pesaturo said.

Company officials did not return calls from The Patriot Ledger last week. Cronin, a former Marshfield resident who now lives in Ormond Beach, Fla., did not return a message left at his home.

Pesaturo said Cronin did not work on development of the automated fare collection system when he was employed at the T. There was no conflict of interest in the Fareways contract award, he said.

Before winning the Charlie Card contract this year, the T increased Fareways’ contract by $327,000 in 2005, T records show.

T officials selected Fareways for the Charlie Card pilot program because ‘‘they have demonstrated they can do the job,’’ said Joseph Kelley, deputy general manager in charge of systemwide modernization.

‘‘They’ve done a phenomenal job’’ selling monthly T passes on the Internet, Kelley said. Since the company took over, the number of sales rose from an estimated 2,815 a month to 14,558, he said.

The T also chose Fareways because there wasn’t enough time for a new contractor to start the program, the agency said when it sought permission from the MBTA board for the extension.

The T plans to seek bids for online and retail Charlie Card services in the first three months of 2007, Kelley said. The agency will pay merchants a commission to handle the cards. However, the agency also has an option to extend the Fareways contract for another six months.

The new fare card allows riders to add value, then tap the card on a reader at subway gates and bus fare boxes. Starting Jan. 1, when T fares increase, riders will pay a penalty if they don’t use a Charlie Card; subway fares will rise to $2 instead of $1.70 and bus fares will be $1.50 instead of $1.25.

The T will begin distributing the permanent plastic cards on Dec. 4 at subway stations and a small number of retail locations, including the United Commercial Bank in the Kam Man supermarket and the Granite Street Shaw’s supermarket, both in Quincy.

Fareways will operate online Charlie Card services and will distribute Charlie Cards and sales terminals to 38 retailers. The retail program will expand to 75 stores on Jan. 1, Kelley said.

Customers can buy added value online and Fareways will program T fare gates to accept their Charlie Cards. In banks and stores with sales terminals, riders can pick up a permanent card and also buy added value.

Passengers can already purchase added value at fare machines in subway stations.

The T plans to distribute 1 million Charlie Cards at subway stations and retailers next month, Pesaturo said. The T won’t convert its commuter rail system to the new cards until next fall.

Not all subway stations and buses will accept the new cards next month, but Pesaturo said officials expect little confusion.

Advocacy groups that opposed the 2007 fare increase are worried about bus riders, who tend to have less income than train passengers.

Subway riders can get cards and add value to them in stations, said Khalida Smalls, head of the Transit Riders Union in Boston.

If bus passengers cannot obtain cards and buy value without going to a train station, they will have to pay an extra fare just to obtain and use the new card, Smalls said.

‘‘We hope that they plan to put (sales terminals) in as many stores as possible,’’ Smalls said. She said the group has asked the MBTA for a copy of its Charlie Card distribution plan but has not yet received it.

In suburbs south of Boston, the T has no retail outlets where bus riders can get cards or buy value in Weymouth, Braintree, Milton and Randolph.

Pesaturo said: ‘‘As soon as we’ve identified other locations for retail sales, we’ll publicize them.’’

Sue Reinert may be reached at sreinert@ledger.com .

Copyright 2006 The Patriot Ledger
Saturday, November 25, 2006