Santa Ana-based Iteris Inc. is on the “A” list for two Federal Highway Administration contracts worth about $80 million over five years.
Iteris, which makes traffic-management sensors and other gear, has been designated as one of the lead contractors qualified to bid on two separate deals that will include various projects over the next five years.
The first contract, valued at up to $67.6 million, is aimed at developing intelligent transportation systems for the nation’s highway system.
The other contract is worth $12.6 million and includes support services for traffic management, emergency transportation and special events.
Iteris had sales of about $58 million last year.
The company’s shares—which trade on the New York Stock Exchange— saw a surge in activity about the time the federal designation was granted, with more than 500,000 shares trading hands, more than 10 times their recent daily average. Shares have seen a modest rise, with a gain of about 6% to $1.65 around the middle of last week, for a market value of about $53.8 million.
It’s now in a strong position to get a substantial share of work on the upcoming federal projects based on its specialty of fusing information technology with traffic management analytics into systems designed to ease crowded highways, intersections and various other bottlenecks.
“We are one of a few in the nation that focus in this area,” Chief Executive Abbas Mohaddes said.
The contracts are part of a $105 billion highway bill Congress approved in late June to fund projects through 2014.
The legislation, sponsored by Sen. Barbara Boxer (D-Calif.), is expected to fund numerous projects in Southern California, particularly in the Inland Empire, home to some of the country’s most congested transportation corridors.
Lawmakers in recent years have turned to technology companies for such improvements. The shift has taken hold amid advancements in computing, communications, Web-based applications and data storage, according to Mohaddes.
“We now have a tipping point in our industry,” he said. “The stars are lined up to leverage and take advantage of these emerging technologies to mitigate congestion in ways we were not able to do in the past.”
That includes analytics that provide travelers with real-time and accurate information, weather forecasts or traffic patterns.
Iteris’ traffic information system has been used in 10 states, which includes a $10 million contract in Virginia, and dozens of regional sites, such as Oxnard, Kern County and neighborhoods around Los Angeles International Airport.
It also has a $674,000 contract from the Orange County Transportation Authority to synchronize 68 traffic lights.
Iteris plans to expand its traffic information system on a state-by-state rollout as it works on the federal highways project, Mohaddes said.
Studies have shown that investment in these types of intelligent transportations grids reduce travel times, delays, harmful emissions and fuel consumption—an escalating problem in California as gas prices near $5 per gallon in many areas.
Iteris shifted its strategic plan to focus on the traffic-management market about a year ago, when it sold its sensor business to Bendix Commercial Vehicle Systems LLC in Ohio for $14 million plus potential earnouts and royalties.
The sensor division developed vehicle-safety systems and highway warning signs, among other technology.
The company has used the proceeds from the deal to add to its intellectual property through two acquisitions and increase research and development, and sales and marketing.
“We believe that the growth in this market could be quite significant, and the investment in this market has a much higher rate of return,” Mohaddes said.
Iteris employs about 270 people, with half of its work force based in Santa Ana.
