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File #: 2018-0489   
Type: Contract Status: Agenda Ready
File created: 7/24/2018 In control: Operations, Safety, and Customer Experience Committee
On agenda: 9/20/2018 Final action:
Title: APRROVE Modification No. 36 to Contract No. P3010 with Kinkisharyo International LLC to reduce the existing 100% performance bond requirements for Contract deliverables to realize a project savings of $4,386,957, decreasing the total Contract value from $926,142,679 to $921,755,722. The Contract decrease does not affect the Life of Project Budget.
Sponsors: Operations, Safety, and Customer Experience Commit
Indexes: Contracts, Equipment Procurement (Project), Light rail vehicles, Procurement, Project, Safety, Safety vehicles, Security, Strategic planning, Vehicle performance, Vehicle safety, Warranty
Attachments: 1. Attachment A - Procurement Summary, 2. Attachment B - Contract Modification Authority Summary, 3. Attachment C - DEOD Summary
Related files: 2018-0673
Date Action ByActionResultAction DetailsMeeting DetailsAudio
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Meeting_Body
OPERATIONS, SAFETY AND CUSTOMER EXPERIENCE COMMITTEE
SEPTEMBER 20, 2018

Subject
SUBJECT: P3010, LIGHT RAIL VEHICLE PROCUREMENT CONTRACT

Action
ACTION: APPROVE RECOMMENDATION

Heading
RECOMMENDATION

Title
APRROVE Modification No. 36 to Contract No. P3010 with Kinkisharyo International LLC to reduce the existing 100% performance bond requirements for Contract deliverables to realize a project savings of $4,386,957, decreasing the total Contract value from $926,142,679 to $921,755,722. The Contract decrease does not affect the Life of Project Budget.

Issue
ISSUE

As of July 31, 2018, Kinkisharyo International (KI) has successfully delivered 140 out of the 235 P3010 LRVs under Contract, and has satisfied the delivery requirements for the Base Contract and its first two exercised Contract Options. KI's rate of vehicle delivery puts them in position to deliver all Contract LRVs in advance of the Contract completion date of December 2020. The P3010 LRV project is currently meeting its program goals and project schedule.

Maintaining a 100% performance bond is excessive in light of KI's proven performance and is not commensurate with the value of the open obligations remaining on the P3010 Contract. Replacing the existing 100% performance bond with a $50 million Irrevocable Letter of Credit (LOC), in combination with existing contractual warranties and securities, provide Metro with an adequate level of financial security to meet the open obligations remaining on the P3010 Contract. This approach will offer a savings to Metro by decreasing the total Contract value by $4,386,957. This savings will be applied as a LOP contingency to cover future contract changes for vehicle enhancements.

Background
BACKGROUND
In October 2010, the Metro Board approved a new solicitation for 235 LRVs to meet Metro's projected Transit Rail Line requirements. In order to ensure on-time performance of the new LRV program to meet vehicle requirements for new rai...

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