During the 2018 Special Session I, the General Assembly approved language in the 2018-2020 Biennium Budget directing the Department of Motor Vehicles (DMV), in consultation with stakeholders, to study the “feasibility and advisability of outsourcing of driver license road tests for adults."

DMV administers three types of road skills tests: (i) non-commercial motor vehicle road skills tests, (ii) motorcycle road skills tests, and (iii) commercial motor vehicle road skills tests. Virginia law permits the Commissioner to designate entities to administer road skills tests on behalf of the DMV. Under this authority, DMV road skills testing is outsourced in part to Class B (non-commercial) driver training schools (DTS) for the administration of non-commercial skills tests, third-party testers (TPT) for the administration of commercial driver’s license (CDL) skills tests, and Virginia Rider Training Program (VRTP) sites for the administration of motorcycle skills tests. In Fiscal Year 2018, approximately 187,000 road skills tests were administered in Virginia. Of those tests, approximately 97,000 were administered by DMV and the balance were conducted by the Commissioner’s designees. By outsourcing some or all of the road skills tests administered by DMV, DMV would be able to repurpose personnel conducting road skills tests to processing other transactions, and thereby reduce wait times for other DMV customers.

In response to the General Assembly’s directive, DMV formed an internal working group to research the issue, and convened a study group consisting of DMV’s internal working group and stakeholders. DMV invited highway safety advocates, law enforcement, and transportation and insurance industry representatives to participate. The stakeholders met three times over the summer to discuss the General Assembly’s directive, and to develop a recommendation on outsourcing road skills testing for adults.

DMV’s internal working group conducted research to provide insight on the best method of outsourcing that is fiscally responsible, while still maintaining the integrity of the road skills testing programs. The working group conducted and presented research on how jurisdictions across North America outsource road skills testing and the associated fees charged for road skills tests. The research showed that the majority of states have a combination of government examiners and non-government examiners administering all types of road skills testing. The research also showed that the government entities that have a fee for road skills testing, on average, $15 for non-commercial and motorcycle road skills tests and $50 for CDL road skills tests.

DMV also distributed a survey to entities, including Class A (commercial) DTS, Class B (non-commercial) DTS, VRTP sites, and TPT that could be affected by the outsourcing of road skills tests. Respondents gave an overall positive response to the idea of outsourcing and expressed a willingness to participate in an outsourcing program. However, some respondents raised concerns of potential fraud as a result of outsourcing. Based on the research, survey responses, and stakeholder discussions, the study group developed the following six outsourcing options. In all scenarios, customers would be charged a fee for the road skills test, whether taken at a DMV location or through a non-DMV examiner. Fees charged by non-DMV examiners would be expected to be higher than those charged by DMV.

Option One. Option One outlines an outsourcing program in which DMV would outsource all current skills testing, including the motorcycle, CDL, and non-commercial road skills testing administered by DMV. These skills tests would be outsourced to non-DMV examiners, including Class A (commercial) DTS, Class B (non-commercial) DTS, and VRTP sites, that currently administer some road skills tests in Virginia. DMV would need to license or certify new non-DMV examiners to ensure that all customers seeking road skills tests would receive timely service.

Option Two. Option Two outlines an outsourcing program in which DMV would retain CDL road skills testing, but would outsource the motorcycle and non-commercial skills testing administered by DMV. These skills tests would be outsourced to non-DMV examiners, including Class B (non-commercial) DTS, and VRTP locations, that administer road skills tests in Virginia currently. DMV would likely also need to license or certify new non-DMV examiners to ensure that all customers seeking road skills tests would receive timely service. DMV would begin charging a fee for CDL skills tests.

Option Three. Option Three outlines an outsourcing program in which DMV would outsource the motorcycle, CDL, and non-commercial skills testing administered by DMV. These tests would be outsourced to a single entity to administer testing statewide or a single entity for each region of the state through a Request for Proposal (RFP).

Option Four. Option Four outlines a scenario in which DMV would retain all current road skills testing, but would begin to charge a fee for all road skills testing.

Option Five. Option Five outlines an outsourcing program in which DMV would retain road skills testing, but would also give customers the option of receiving a road skills test with non-DMV examiners. These non-DMV examiners would be located in high-volume and high population density areas in the Commonwealth.

Option Six. Option Six outlines an outsourcing program in which DMV would retain skills testing for non-commercial and motorcycle road skills testing for a fee, but would outsource CDL road skills testing to licensed non-DMV examiners.

DMV estimated the potential fiscal impact of each of these options (see chart on page 4 of the report).

The study group discussed these options and the potential net fiscal impact to DMV, but was unable to come to a consensus on a recommendation for outsourcing road skills testing. Most stakeholders did not express support or objection to the outsourcing options. However, some stakeholders were vocal regarding the current wait times that CDL road skills testing customers encounter. Stakeholders also expressed objection to outsourcing road skills testing through an RFP. During the stakeholder discussions of the options, concerns were also raised regarding the potential for fraud as a result of outsourcing.

Additionally, during the course of the study, DMV became aware of a study being conducted by the American Association of Motor Vehicle Administrators. The aim of this study is to modernize CDL regulatory requirements for testing and reduce the space and time required to administer such road skills tests.

Given the concerns for potential fraud and the uncertainty regarding the regulatory requirements for CDL road skills testing, DMV recommends that road skills testing for adults not be outsourced at this time, and that DMV retain its current program. Administratively, DMV will identify strategies to enhance the efficiency and the cost-effectiveness of the testing program. For example, DMV plans to pilot a policy of using "designated examiners" in a select number of its Customer Service Centers (CSCs) to determine if such a policy will reduce costs associated with the training of Customer Service Representatives (CSRs) while allowing DMV to retain its current level of customer service.

If there is concern regarding the wait times for those seeking CDL road skills tests, the study group recommends two potential solutions. The first is for the General Assembly to authorize DMV to charge $50 for the administration of a CDL road skills test. This recommendation is based on the national average of the fees charged by governmental entities for CDL road skills tests collected in the jurisdictional research conducted by DMV's internal working group. DMV also recommends that the General Assembly increase from $85 to $100 the fee DMV may charge for road skills tests administered to individuals from out-of-state. With the additional revenue generated by the fee and the fee increase, DMV would be able to hire additional DLQA personnel to administer more CDL road skills tests, and thus shorten the wait time for such customers. Concurrently, DMV will continue to work with trucking and other companies that employ commercial motor vehicle drivers to grow DMV’s current third party testing program.

The second potential solution is for the General Assembly to authorize DMV to develop and implement a limited pilot program allowing existing Class A (commercial) DTS to administer CDL road skills tests at a cost to the customer. DTS eligible to participate in the pilot would be determined by criteria set by the Department. Implementing a pilot would allow DMV the opportunity to determine the financial impacts on the Department and to test metrics for detecting and preventing fraud on a limited scale with less risk. DMV will work with the General Assembly to draft legislation to implement such a program.