Meeting_Body
SYSTEM SAFETY, SECURITY AND OPERATIONS COMMITTEE
JUNE 15, 2017
Subject
SUBJECT: CONTRACTED BUS SERVICE - SOUTH REGION
Action
ACTION: AWARD CONTRACT FOR CONTRACTED BUS SERVICE
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to award a five-year, firm fixed unit price Contract No. OP38384000 to MV Transportation, Inc. (MV) for contracted bus services in the South Region in an amount not-to-exceed $127,280,617, effective July 1, 2017, subject to resolution of protest(s), if any.
Issue
ISSUE
The current contract with MV for operating bus services in the South Region is scheduled to expire on June 30, 2017. A new contract is required to continue the service.
Discussion
DISCUSSION
Metro operates 18 bus lines that are contracted to private transportation companies. The South Region contractor currently operates seven of these lines as follows: 125, 128, 130, 205, 232, 607, and 625.
|
Line |
Description |
Annual RSH* |
Annual Passengers |
|
125 |
El Segundo - Downey via Rosecrans Ave. |
44,595 |
1,612,779 |
|
128 |
Compton - La Mirada via Alondra Blvd. |
11,466 |
320,248 |
|
130 |
Redondo Beach - Cerritos via Artesia Blvd. |
33,235 |
942,404 |
|
205 |
Imperial/Wilmington Sta. - San Pedro via Wilmington Ave., Vermont Ave. & Western Ave. |
45,300 |
1,193,736 |
|
232 |
Long Beach - LAX via Sepulveda Blvd. |
60,198 |
1,893,401 |
|
607 |
Inglewood - Windsor Hills - Inglewood |
2,310 |
18,263 |
|
625 |
Green Line Shuttle World Way West via Imperial Hwy. |
4,860 |
91,367 |
|
*RSH = Revenue Service Hours |
|
|
Metro began contracting a portion of our bus services in 1996. The first 13 contracted lines were existing directly operated services. These lines were transferred due to their high subsidy per passenger rate ratio. The remaining five (5) contract lines include some of the new local shuttle and Consent Decree services that have been added since 1996. Contracting a portion of our bus service has provided both cost and operational benefits:
• Annual savings are realized through the lower operating costs of the contractors.
• Modifications or expansion to existing bus divisions are not necessary when new services are added.
• Contracts allow greater flexibility in operation. Lines can be quickly added, cancelled, or modified.
Despite being operated by a contractor, Metro’s Service Planning Department still includes all South Region routes in all performance and planning analyses. Changes are effected semiannually or when needed, to ensure optimal and efficient service performance.
In June 2010, the Board approved an award of a five-year contract with MV Public Transportation, Inc. which expires June 30, 2017. The new proposed Contract requires the contractor to pay for CNG fuel costs, but will continue to provide for reimbursement for actual fuel costs for diesel buses. The maximum cost Metro will pay for diesel fuel is based on an index price published by the Oil Price Information Service (OPIS). Reimbursement of diesel fuel used in revenue vehicles is a practice that Metro has used to minimize the risk of potentially volatile diesel fuel prices affecting costs over the five-year contract period and the potential need for price adjustments based on changes in fuel prices or varying diesel fuel consumption resulting from the replacement of diesel buses with new CNG buses. Metro requires contractors to pay for CNG fuel for revenue vehicles and develop a plan for the installation of a CNG station within their facility for continuity and reliability of operation.
The new Contract contains additional provisions related to vehicle maintenance, including dedicated positions for maintenance of Metro-owned communications equipment such as advance transportation management system (ATMS), automated passenger count (APC), and others, stricter body damage and appearance standards, and specific procedures for the transfer of vehicles to and from the contractor to further increase service versatility. Metro has initiated the process of acquiring new CNG buses which will replace the current diesel fleet during this Contract period. Metro’s Vehicle Acquisition group expects that the buses will be replaced during FY18-FY19; pending a decision by Bus Fleet Management. The Contract also contains the same provisions that allow for service levels to be increased or decreased over the term of the Contract based on our operating needs. Additionally, Metro has implemented new provisions to incentivize the application for, and receipt of, fuel tax credits and grants relating to the maintenance of Metro’s buses. These provisions allow the contractor to retain a majority of the fuel tax credits/grants toward the beginning of the contract period and gradually balance out to where the contractor and Metro evenly retain the fuel tax credits/grants.
The new Contract term will begin July 1, 2017 and end June 30, 2022.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
The proposed Contract contains provisions requiring minimum levels for training that will ensure the safest possible operation of our equipment and service.
Financial_Impact
FINANCIAL IMPACT
The funding of $24,029,963 for this contracted service is included in the FY18 budget in Cost Center 3593 3592; Project 306001, Operations Transportation, and Account 50801, Purchased Transportation. Since this is a multi-year contract, the cost center manager and Chief Operations Officer will be accountable for budgeting the cost in future years, including any options exercised.
Impact to Budget
The source of funds for this service will come from Federal, State, and local funding sources including sales tax and fares that are eligible for Bus Operating Projects. These funding sources will maximize the use of funds for these activities given funding provisions.
Alternatives_Considered
ALTERNATIVES CONSIDERED
Staff considered bringing these services in-house. Based on our proposed FY18 marginal bus operating cost of $167.65 per Revenue Service Hours, it would cost more to operate these services in-house and would require physical modifications to our facilities to operate and maintain the vehicles used for this service. The new cost for services is $97.36 per RSH for diesel and $122.13 per RSH for CNG.
Next_Steps
NEXT STEPS
Upon Board approval, staff will execute Contract No. OP38384000 to MV Transportation, Inc. In spring 2022, staff will return to the Board with recommendations based upon further evaluation of the services provided under this Contract.
Attachments
ATTACHMENTS
Attachment A - Procurement Summary
Attachment B - Metro South Region Contract Service Bus Lines
Attachment C - DEOD Summary
Prepared_by
Prepared by: Cathy Rosas, Manager, Transportation Contract Services, (213) 922-2875
George Del Valle, Transportation Contract Services Field Representative, (213) 922-7240
Reviewed_By
Reviewed by: James T. Gallagher, Chief Operations Officer, (213) 418-3108
Debra Avila, Chief Vendor/Contract Management Officer, (213) 418-3051
