SYSTEM SAFETY, SECURITY AND OPERATIONS COMMITTEE FEBRUARY 19, 2015 EXERCISE OPTION FOR 350 NEW FLYER BUSES RECOMMENDATION

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1 23 One Gateway Plaza Los Angeles, CA ooo Tel metro. net SYSTEM SAFETY, SECURITY AND OPERATIONS COMMITTEE FEBRUARY 19, 2015 SUBJECT: ACTION: REPLACEMENTBUSES EXERCISE OPTION FOR 350 NEW FLYER BUSES RECOMMENDATION Authorize the Chief Executive Officer to: A Increase the Life-of-Project budget for the bus replacement project to include the purchase of 350 additional Compressed Natural Gas (CNG) buses for the FY16-18 capital program in the amount of $195,000,000 from $308,442,500 to $503,442,500 (See Attachment C Funding Plan). B. Execute Contract Option No. 1 to Contract OP with New Flyer of America (NFA), to purchase 350 additional forty-foot CNG buses for the firm fixed price of $193,979,571, increasing the Total Contract Value from $304,672,769 to $498,652,341 inclusive of sales tax. ISSUE Over the next three years, 843 buses will reach the end of their useful life. These 350 New Flyer "Option" buses will replace forty-foot buses that have expiring CNG fuel tanks and have reached the end of their useful service life. It is not legal to continue operating CNG vehicles beyond the expiration of the CNG tank certification, and it is not practical to replace CNG tanks on buses that have passed the end of their design life. Buses being replaced include New Flyer and NAB I 40' CNG buses that were purchased between DISCUSSION This action establishes the budget authority necessary to proceed with exercising this contract option for 350 additional replacement buses. These New Flyer buses are included in Metro's bus fleet replacement plans. These 350 new buses will replace 5300 series New Flyer buses and 7300 series NABI buses that were purchased years ago. New buses will replace buses currently deployed at every Metro Operating Division except Division 6 (Venice) and Division 8 (Chatsworth), as these divisions do not currently have 40' buses eligible for retirement.

2 Contract OP is a firm fixed price contract for the purchase of 40' CNG transit buses that was executed on February 1, The base award for this contract is for 550 buses, with options to purchase up to 350 additional buses for a total of 900 buses. DETERMINATION OF SAFETY IMPACT These buses are designed to comply with all applicable federal, state and local safety standards. These buses will include improved safety features and amenities, including enhanced ADA securement provisions, LED cornering lights, and enhanced video surveillance capabilities. These buses will also replace buses that have reached the end of their useful life and have expiring CNG fuel tanks that are impractical to replace. FINANCIAL IMPACT Funding for this recommendation, if approved, will be included in the FY16 capital program by an LOP increase to project ' Foot Bus Buy. Budget shall be allocated to cost center 3320 in account Vehicle Technology for $82.5 million in the FY16 budget. The balance of the project shall be funded in accordance with the cashflow plan found in attachment C included herein. Should additional funds be identified or become available throughout the life of this action, project management will coordinate with funding staff to accelerate the bus delivery. Since this is a multi-year action, the cost center manager and project manager will be responsible for budgeting in future fiscal years. Impact to Budget The recommended action will be funded with Federal 5307, Federal 5339 and Local TDA-4 funds which is eligible for Bus and Rail Operations. Staff will continue to identify alternate Federal and Local funding sources to apply to this action as it becomes available. IMPACTS TO OTHER CONTRACTS None. ALTERNATIVES CONSIDERED Staff considered not purchasing additional buses and extending the life of existing fleet buses. This is not recommended because many buses scheduled for replacement during the next three years will reach 15 years of age which is the maximum allowable operating life for the CNG tanks and fuel systems installed on these buses. It is not legal to continue operating CNG vehicles beyond the expiration of the CNG tank certification, and it is not practical to replace CNG tanks on buses that have passed the end of their design life. Exercise Contract Option for 350 CNG Buses Page 2

3 Staff considered initiating a new procurement for replacement buses. This is not recommended because the lead time for new vehicles can take months or more; therefore, it is unlikely that a new bus procurement could be completed in time to meet FY16-18 fleet replacement needs. Staff does intend to initiate a new solicitation for additional replacement buses in FY2016 for buses to be delivered in FY NEXT STEPS If this action is approved, staff will execute Contract Option No. 1 to Contract OP directing New Flyer of America, Inc., to begin production of 350 new buses for delivery between FY ATT ACHMENT(S) A. Procurement Summary B. Contract Modifications I Change Order Log C. Funding I Expenditure Plan Prepared by: Richard Hunt, General Manager- Transit Capital Programs John Drayton, Director of Vehicle Technology Questions: Christopher Reyes, Senior Administrative Analyst (213) Exercise Contract Option for 350 CNG Buses Page 3

4 tep e Wiggin Execu 1ve Director Vendor/Contract Management ~«2C? Robert Holland Interim Chief Operations Officer Arthur T. Leahy Chief Executive Officer Exercise Contract Option for 350 CNG Buses Page 4

5 ATTACHMENT A PROCUREMENT SUMMARY UP TO 900 CNG BUS CONTRACT/MODIFICATION NO Contract Number: OP Contractor: New Flyer of America, Inc. 3. Mod. Work Description: Exercise Option No. 1 for 350 CNG Buses 4. Contract Work Description: Up to 900 Bus Buy 5. The following data is current as of: 1/6/15 6. Contract Completion Status Financial Status Contract Awarded: 2/1/13 Contract Award $302,094,178 Amount: Notice to Proceed 2/1/13 Total of $2,578,592 (NTP): Modifications Approved: Original Complete 7/31/15 Pending $193,979,571 Date: Modifications (including this action): Current Est. 6/30/18 Current Contract $498,652,341 Complete Date Value (with this (with this action): action): 7. Contract Administrator: Joe Marzano Telephone Number: (213) Project Manager: John Drayton Telephone Number: (213) A. Procurement Background This Board Action is to exercise Contract Option No. 1 to purchase 350 forty-foot CNG buses, manuals and training under Contract OP This contract modification will be processed in accordance with Metro's Acquisition Policy and the contract type is a Firm Fixed Price. On January 24, 2013, Metro's Board of Directors approved Board Agenda Item No. 54, to New Flyer of America, Inc., in the amount of $302,094,178, for manufacturing and delivery of 550 forty-foot CNG transit buses exclusive of contract Options for up to 350 additional buses for a total of 900 buses. The period of performance for the delivery of the 550 base vehicles is from February 1, 2013 to July 31, The recommended contract modification is to exercise Option No. 1 for the purchase of 350 option vehicles to replace buses that will reach the end of their useful life during FY If approved, the 350 option vehicles will be manufactured between August 2015 and June The value of the contract modification is for a firm fixed amount of $193,979,571, including tax and delivery. Exercise Contract Option for 350 CNG Buses Page 5

6 Attachment B shows that eight (8) modifications have been issued to date for vehicle configuration changes, non-taxable ADA equipment tax adjustments, and corrections to Diagnostic Test Equipment pricing. B. Cost/Price Analysis The recommended price has been determined to be fair and reasonable for the 350 option vehicles based upon adequate price competition attained during the initial solicitation, fact finding, technical evaluation and comparison to the independent cost estimate prepared prior to contract award. The contract requires that option vehicle pricing be subject to escalation. The escalation is determined by the base vehicle cost plus the percentage change in the Bureau of Labor Statistics, Producer Price Index for Truck and Bus Bodies, Series No The firm fixed unit price for Contract Option No. 1 vehicles is as follows: % Unit Price PPI Base Vehicle Price Escalation New Unit Price $ 478,932 $ 13,257 $ 492,189 C. Small Business Participation The Diversity and Economic Opportunity Department did not recommend a Disadvantaged Business Enterprise (DBE) participation goal for this rolling stock procurement. The Federal Transit Administration (FTA) requires that each Transit Vehicle Manufacturer (TVM) submit for approval an annual percentage overall goal. The TVM goal is based on the amount of federal funding to be received by the TVM for the transit vehicle contracts during the fiscal year. In compliance with 49 CFR Part 26.49, TVMs report directly to FTA. Therefore, compliance with the DBE requirements is monitored at the federal level. D. Living Wage and Service Contract Worker Retention Policy Applicability The Living Wage and Service Contract Worker Retention Policy is not applicable to this modification. Exercise Contract Option for 350 CNG Buses Page 6

7 ATTACHMENT 8 CONTRACT MODIFICATION AUTHORITY (CMA) SUMMARY UP TO 900 CNG BUS CONTRACT/MODIFICATION NO. 9 Request for Change. Description Status Estimated Cost (RFC) No. N/A Award Base Contract and Approved Options 1 and 4 Approved $302,094,178 1 Updated ADA Equipment and Safety Provisions $2,936,786 1a Correction to bus unit price for non- taxable ADA Equipment not accounted for in the proposal price ($717,994) 2 Period of Performance extension for the first 275 buses from June 30, 2014 to October 31, 2014 $0 3 PLC cover color change and two (2) additional stop request buttons per bus $54,243 4 Change from 3 position bicycle rack to 2 position bicycle rack ($52,924) 5 Additions/reductions in quantities of special tools, diagnostic test equipment, training aids, and AMS server upgrade ($428,920) 5a Correction to BAFO Pricing Form PF-4 Diagnostic Test Equipment, AMS Server Price ($692,075) 6 Installation of Live Video Monitoring System as a cut-in on remaining 128 production vehicles $964,877 7 Change from 2 position bicycle rack to 3 position bicycle rack $14,698 8 Installation of operator barriers on 123 production vehicles $499,901 Subtotal- $2,578,592 Prior CMA Authorized by the Board $30,209,418 Increased CMA requested $0 Total CMA including this action $30,209,418 Remaining CMA for Future Changes $27,630,826 Exercise Contract Option for 350 CNG Buses Page 7

8 ATTACHMENT C FUNDING/EXPENDITURE PLAN UP TO 900 CNG BUS CONTRACT/MODIFICATION NO. 9 In Thousands 550 Base Order Total %of (Forecast expenses FY16 FY17 FY18 LOP Total thru FY15) Uses of Funds Bus Acquisition, 296, ,000 74,500 37, , % Professional Services % Labor 2, , % Travel/ Admin % Spare Parts, Training, Service Manuals 5, , % Contingency 3, , % Total Project Cost $308, ,500 75,000 37,500 $503, % In Thousands 550 Base Total %of FY16 FY17 FY18 (Budget thru FY15) 2 LOP Total Sources of Funds TDA Article 4 9,600 11,800 4,000 25, % Fed ,000 40,000 10, , %% Fed ,900 23,200 23,500 69, %% Total Project Funding $308, ,500 75,000 37,500 $503, % 1 Vehicle price is estimated at 492,289 not including taxes and delivery. Option pricing is estimated to increase by 2.79%, or $13,257 per bus, based on the preliminary PPI Index No for December If the Option is approved and executed in Feb. 2015, then the Jan 2015 PPI will be used to calculate final option pricing. 2 To date, 375 of the 550 New Flyer buses in the base order have been accepted by Metro, and 335 have been put into revenue service. Exercise Contract Option for 350 CNG Buses Page 8