Taxes & SpendingTransportationAfter Millions in Overcharges, TxDOT Cuts Ties with Toll Road Tag Vendor

TxTag drivers had been overcharged for years to the tune of millions of dollars.
August 31, 2021
A multi-million-dollar billing error, or series of errors, led to the expulsion of the Texas Department of Transportation’s (TxDOT) private vendor in charge of billing for the “TxTag” toll road service.

TxTag is a toll roads that allows drivers to pay bills automatically through an account and receive discounted rates.

IBM, the firm contracted out to facilitate the service’s billing operation, was removed from its responsibilities this week, according to the department.

“We take the responsibility of providing a quality and trusted customer experience very seriously, and regret the impact and inconvenience these past many months of lackluster IBM service have had on our toll road users,” said TxDOT Executive Director Marc Williams.

Over $11.7 million had been refunded to drivers back in May and the billing missteps continued to pile up. The vendor had also been fined $6 million by the state for its failings.

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“We will continue to keep customers apprised on our progress to improve our customers’ interactions with TxTag. Our customers deserve better and we are committed to ensuring that they receive that going forward.”

For its part, IBM pointed the finger back at the state, saying, “The success of any information technology project depends on each of the participants fulfilling its obligations. IBM’s performance on this project has been hampered by the inability of TxDOT to do so.”

“Despite TxDOT’s failure, IBM’s performance and the system IBM has implemented far exceed operational requirements anticipated when the contract was signed to the benefit of Texas motorists.”

To “stabilize and improve the back-end system to manage the massive amount of customer data and toll transactions,” the department minted an emergency contract with SAP Software Solutions and the Department of Information Resources Managed Security Services.

No action by TxTag drivers is necessary following the billing vendor change, according to TxDOT.

Correction: An earlier version of this article incorrectly defined the TxTag service. We regret the error.


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Brad Johnson

Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.