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Toll Agencies, Lockheed Agree to Split

Contractor will receive $5.5 million and vacate its Irvine offices by Jan. 1. It defends its performance record.


County toll road officials and their chief contractor, Lockheed Martin IMS, signed papers Thursday that officially end their rocky, seven-year relationship.

The agreement establishes a schedule for $5.5 million in out-of-court settlement payments from the Transportation Corridor Agencies to Lockheed.

Lockheed wanted out of the contract two years early, saying it was losing money running the toll roads because their projected use did not match reality.

County officials disagree with Lockheed's claim, but said the signed settlement and "agreement of disengagement" saves the TCA from a potentially costly court battle.

However, the agreement did not end certain bitter feelings between the two parties, as TCA officials openly bemoaned what they viewed as Lockheed's deteriorating service in recent months.

In particular, TCA officials said complaints about malfunctioning toll transponders and customer service increased dramatically after Lockheed said it wanted to terminate its contract.

"As a result of the money Lockheed was losing, they had to do some internal restructuring," said toll authority negotiator and Orange County Supervisor Todd Spitzer. "That resulted in a loss of customer service."

Lockheed officials said, however, that they made no cuts to customer service and said any incidents of transponder problems or rude employees were not widespread.

"We've had complaints, but when you're talking about 50 million transactions in a year, the complaints don't add up to more than a tenth of 1%," said John Harwood, a Lockheed spokesman. "We feel that under the circumstances, that's a pretty good rate. There's nothing rampant there."

Under the agreement, Lockheed will clear out its offices at the toll agencies' operation center in Irvine by Jan. 1.

Among other disputes, Lockheed had claimed that it lost money because toll road traffic projections were lower than anticipated on the San Joaquin Hills tollway.

It also said it deserved a bonus for higher-than-expected traffic on the Eastern and Foothill toll roads.

The toll authority denied both these claims, saying the busier toll roads made up for the slower one's losses.

Despite lingering differences, both sides insisted Thursday that the move from Lockheed to other contractors will be smooth. "There is going to be a nice transition," Harwood said. "There will be no interruption to customers."

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