Meeting_Body
OPERATIONS, SAFETY, AND CUSTOMER EXPERIENCE COMMITTEE
MAY 21, 2026
Subject
SUBJECT: AUTOMATED GUIDED VEHICLE (AGV) REPLACEMENT
Action
ACTION: AWARD CONTRACT
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to award a 24-month firm-fixed price Contract No. PS135749000 to Dematic Corp. (Dematic) for the Automated Guided Vehicle (AGV) replacement to install 11 AGVs along with the associated software in the amount of $4,837,855, subject to the resolution of any properly submitted protest(s), if any.
Issue
ISSUE
This Board action is to award a contract for the replacement of Metro-owned and operated AGVs, which are a component of Metro’s existing Automated Storage and Retrieval System (ASRS). The 20-year-old AGVs have obsolete parts that are critical to the operating system, including the main CPU boards, communications boards, and radios. The 4906 AGV controller software (traffic control and routing) is obsolete, and at the end of their useful life. Repair and/or replacement parts are not available, which will result in negative service impacts on our riders.
Background
BACKGROUND
The ASRS system was commissioned in 1986 by HK Systems Incorporated, which Dematic acquired in 2010. Within the last 40 years, ASRS went through several upgrades (2006, 2007, 2013 and 2015) to replace the original components and perform system updates. Components such as the AGVs are at the end of their useful life, and any failure would cause a significant risk to Metro.
Metro’s AGVs are computer-controlled, wheel-based load carriers that move materials and supplies autonomously around Metro’s Central Maintenance Facility (CMF). They carry material loads to and from Metro’s CMF main parts supply stocking warehouse and receiving docks. They follow predefined paths-using magnets-to deliver parts and components to CMF’s main production line and support repair shops across multiple buildings at CMF. In addition, they deliver loads of material to the shipping area for outbound material shipments to Metro bus and rail divisions in support of Metro Operations.
Metro is currently using Dematic’s Equipment Management System (EMS), which has been customized for Metro’s requirements (the 4906 AGV control system is fully integrated with Dematic’s EMS). These integrated software packages are running on Windows servers and workstations, which use ORACLE RDMS (under AIX).
Discussion
DISCUSSION
At CMF, the handling of material distribution and logistics comprises the heartbeat of an efficient system. Metro’s Equipment Asset Management System (EAMS) relies heavily on the information provided by a computer controlled ASRS, which is integrated with EAMS. The AGVs were installed to support the transfer of materials and supplies in supporting the maintenance of Bus, Rail, and Non-Revenue vehicles throughout LA County. Unfortunately, due to the aging fleet, the AGVs have been experiencing some failures and require above-average maintenance. Replacement parts are becoming obsolete and hard to find. Replacing the aging AGVs is a strategic, cost-effective alternative to maintaining them.
Replacing the AGVs will enhance safety and allow for greater operational efficiency. The new AGV replacement will integrate into Metro’s physical system and integrate with the manager/controller software. The new AGVs will use an in-vehicle charging method. High-capacity Thin Plate Pure Lead (TPPL) batteries will be used along with in-floor charging shoes to automatically recharge the onboard vehicle batteries, when necessary, without maintenance personnel being required. Metro will realize cost savings with the charging efficiency of the new battery technology, the extended life of each charge, and the minimized service disruptions.
The new AGVs also enhance warehousing efficiency by improving inventory accuracy. They are equipped with lasers, sensors, and cameras, and minimize accidents, human error, and damage to parts and supplies. The AGVs can operate 24/7, providing consistent, reliable, and faster movement of materials and supplies at the CMF main stocking location and areas where material loads are moved around: material receiving/deliveries, shipping to our Bus and Rail divisions, and CMF repair shops and production line. The newer AGVs integrate with the existing ASRS system which ensures inventory control and traceability.
Dematic is the Original Equipment Manufacturer (OEM) for Metro’s ASRS system. They are also responsible for ongoing support and warranty to Metro for this system. The ASRS utilizes Dematic’s proprietary components, communication protocol, controls and interface logic between the server and the system components, only the OEM can perform the equipment upgrade and software support.
Determination_of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
The new AGVs create a safer work environment. The purchase and replacement of the new AGVs will provide Metro with an advanced state-of-the-art system and includes 360° monitoring using laser scanners to increase the vehicles’ ability to sense people/objects and if something comes near the vehicle. Laser scanners replace the physical bumpers of the old AGVs and require much less periodic maintenance. The new AGVs has a maximum load capacity of 4,000 lbs. and allows for communication on either 400 MHz radio or Wi-Fi. Moreover, the new AGVs controller software can fully integrate with Metro’s existing ASRS system The upgraded safety and control system allows for increased diagnostics and remote support.
Based on Dematic’s proposal, there will be minimal interruption of facility operations during the installation or cutover to the new AGVs. The work will be performed during non-peak or off-shift hours.
Financial_Impact
FINANCIAL IMPACT
The project work will take place throughout 2026-2028. For FY26, $900,000 has been set aside in Cost Center 6350, Logistics, project #290011. The total contract cost of $4,837,855 is within the Life of Project (LOP) budget. The combined Life of Project budget for this work is $6,062,095. Since this is a multi-year project, the Project manager, Cost Center manager, and Deputy Chief Vendor/Contract Management Officer will be responsible for budgeting the remaining costs for future fiscal years.
Impact to Budget
The source of funds for this action is TDA 4. These funds are eligible for use on bus and rail operations.
Equity_Platform
EQUITY PLATFORM
The AGV Replacement project will benefit Metro Transit riders because it supports the fleet maintenance requirements for roll-out. The new AGVs will be using state-of-the-art technology and bring the system to meet the demand of expanded ridership. In addition, the new AGVs will enable on-time parts receiving/delivery and accurate inventory control to Metro divisions for timely bus/rail cars repair and maintenance. Reliable bus/rail service will ensure riders have dependable transportation for their daily essential activities. This project will improve Metro bus and rail reliability, reduce unexpected service interruptions, and provide better rider experiences. There are no potential harm and barriers anticipated as a result of the proposed action.
The Diversity & Economic Opportunity Department (DEOD) did not establish a Small Business Enterprise (SBE) / Disabled Veteran Business Enterprise (DVBE) goal for this procurement due to the lack of availability of small businesses. Dematic Corp. is expected to perform the work with its own workforce.
Vehicles_Miles_Traveled_Outcome
VEHICLE MILES TRAVELED OUTCOME
VMT and VMT per capita in Los Angeles County are lower than national averages, the lowest in the SCAG region, and on the lower end of VMT per capita statewide, with these declining VMT trends due in part to Metro’s significant investment in rail and bus transit.* Metro’s Board-adopted VMT reduction targets align with California’s statewide climate goals, including achieving carbon neutrality by 2045. To ensure continued progress, all Board items are assessed for their potential impact on VMT.
As part of these ongoing efforts, this item is expected to contribute to further reductions in VMT. While this item does not directly encourage transit, sharing a ride, or using active transportation, it is a vital part of Metro operations, as it maintains and improves Logistics services in support of Maintenance operations.
Because the Metro Board has adopted an agency-wide VMT Reductions Target, and this item supports the overall function of the agency, this item is consistent with the goals of reducing VMT.
*Based on population estimates from the United States Census and VMT estimates from Caltrans’ Highway Performance Monitoring System (HPMS) data between 2001-2019.
Implementation_of_Strategic_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
Approval of this recommendation supports Metro’s Strategic Plan Goal 1: Provide high quality mobility options that enable people to spend less time traveling. Proper functioning equipment will optimize the reliability of the Automated Storage and Retrieval System (ASRS). Also, this recommendation supports Metro’s good public policy judgment and sound fiscal stewardship.
Alternatives_Considered
ALTERNATIVES CONSIDERED
Retaining the existing AGVs was considered. However, the 20-year-old AGVs, has exceeded its useful life, exhibited reduced reliability and increased maintenance costs. Its unreliability and inefficiency issues in material handling make it unsuitable to meet Metro's growing inventory and operational needs.
Operational Impacts in Current State
• Increased maintenance costs for end-of-life ASRS components.
• Increased maintenance time for Facilities Maintenance technicians.
• System downtime and inability to support Maintenance Operations.
• Safety systems that are far surpassed with the new technology.
• Inoperable system because of obsolete parts.
• Inoperable system because of non-supported systems.
Foreseeable Risks in Current State
• Inability to efficiently deliver parts to bus and rail facilities.
• Inability for bus and rail maintenance technicians to perform preventative
maintenance and unplanned maintenance required to keep bus/rail fleet at targeted operational levels.
• Loss of inventory control and increased working capital needs agency-wide.
Metro does not possess the technical knowledge and/or documentation to support the in-house replacement of components or perform upgrades. The system integrates with Metro’s enterprise applications and is considered complex with its own proprietary functions/logic. Any alternative(s) to engage other competitors would require levels of reverse engineering for both the hardware and software interfaces adding significant time to the schedule, the introduction of warranty/performance issues, and unknown additional costs associated with the engineering to be performed. Dematic is the Original Equipment Manufacturer (OEM) and only Dematic is authorized to perform the necessary upgrades effectively and in a timely manner.
Another alternative is to consider replacing the entire system; however, this will also add significant time to the project, presenting a significant learning curve and training costs, and add considerable financial impact as a new similar system is estimated to be in the $30-$40 million range.
Next_Steps
NEXT STEPS
Upon approval by the Board, staff will execute Contract No. PS135749000 with Dematic Corp. for the AGV replacement.
Attachments
ATTACHMENTS
Attachment A - Procurement Summary
Attachment B - DEOD Summary
Prepared by: Jeffrey Vergel de Dios, Senior Manager, Inventory Management, (213) 922-5022
Debra Avila, Deputy Chief, Vendor/Contract Management Officer, (213) 418-3051
Carolina Coppolo, Deputy Chief, Vendor/Contract Management Officer, (213) 922-4471
Reviewed by: Michelle Navarro, Chief Financial Officer (Interim), 213 922-3056
