Meeting_Body
OPERATIONS, SAFETY, AND CUSTOMER EXPERIENCE COMMITTEE
MAY 18, 2023
Subject
SUBJECT: BUS TIRE LEASING & MAINTENANCE SERVICES
Action
ACTION: APPROVE CONTRACT MODIFICATION
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to execute Modification No. 8 to Contract No. OP83932000-39383 with The Goodyear Tire & Rubber Company in the amount of $11,671,134 ($2,164,434 for FY23 and $9,506,700 for FY24) to continue to provide bus tire leasing and maintenance services, increasing the contract value from $41,908,927 to $53,580,061, as well as extending the period of performance through June 30, 2024.
Issue
ISSUE
The Contract Modification will provide Metro bus divisions with uninterrupted bus tire and maintenance services for the transit bus fleet through June 30, 2024. This service contract aims to continue providing Metro with tire maintenance to ensure reliable service on its revenue bus fleet. In addition, the contract will continue to provide qualified and trained service personnel to perform tire inspections and maintain the Metro bus fleet in safe operating condition.
This action will allow staff sufficient time to re-procure these services through a competitive procurement process with opportunities for small business participation.
Background
BACKGROUND
Metro’s directly operated revenue bus fleet consists of close to 1,900 buses utilizing approximately 12,480 leased tires, traveling over 67 million miles annually. These tires require maintenance and service daily. In addition, this leased tire contract supports the revenue bus fleet and tire maintenance services for the Metro non-revenue fleets. Although non-revenue tires are purchased under a separate procurement, they are mounted and balanced under the bus tire leasing and maintenance services contract.
Leased costs are based on actual bus (tire) mileage plus a fixed monthly service rate. This service contract includes waste remediation of all spent tire castings and a comprehensive tire maintenance program. The tire maintenance program includes tire rotation, mounting, regrooving, recapping, balancing, inflating, and wheel refurbishing. The monthly service rate for the contract includes tire maintenance and service for Metro’s non-revenue fleet.
The contract with Goodyear Tire & Rubber Co. was effective as of October 1, 2017. Seven modifications occurred over the life of the contract due to Goodyear Tire & Rubber Co. changes to subcontractors and suppliers, expanded support requirements with the reactivation of Metro Division 10 during the refurbishment of the A Line (Blue Line), reduced support requirements with the closing of Metro Division 10 after completion of the refurbishment of the A Line (Blue Line), changes in firm fixed rates to the contract due to bus fleet changes, and expansion of the contract period of performance and contract value based upon existing staff authority.
Discussion
DISCUSSION
Consistent and effective maintenance and servicing of bus tires is a fundamental requirement for bus service performance and reliability. The Metro revenue bus fleet travels over 180 thousand miles per day throughout Los Angeles County on city streets, freeways, and highways. Operating in a range of weather conditions from extreme heat to rain and on various road surface conditions. It is an operational necessity for the tires on the Metro fleet to be serviced, maintained, and replaced on a daily basis to limit service interruptions. The recommended contract modification will provide Metro with continuous bus tire maintenance and services to meet Metro bus fleet service requirements.
Bus tire leasing and maintenance services improve the customer experience by ensuring that Metro transit buses safely transport patrons to their destinations. The bus tire and maintenance service contract will ensure Metro bus divisions are well stocked with replacement tires, tire inspections on buses are performed on a nightly basis, tread depth and tire wear are closely monitored, air pressure is maintained and any tires showing abnormal wear are replaced prior to the bus being placed into revenue service.
The safety and security of both customers and operators are ensured by contracting these services with a company that can provide transit-rated tires and qualified service personnel to inspect and maintain the Metro bus fleet.
The contract modification will provide funding to support bus tire replacement and maintenance services in the amount of $2,164,434 for FY23 and $9,506,700 for FY24. The FY23 funding will cover costs associated with replacement tires, waste remediation of worn/defective tires, tire rotation, mounting, regrooving, recapping, balancing, inflating, and wheel refurbishing invoiced from April through June 30, 2023. Staff projections of contract authority did not sufficiently account for the additional mileage and associated lease costs from the service expansions that occurred in 2022, which resulted in a shortfall in contract authority for the remainder of the current contract period which expires on June 30, 2023.The contract modification will also provide funding for tire replacement and maintenance services in FY24.
Operations has taken proactive steps to avoid future contract forecast expenditure shortfalls with creation of an oversight team that monitors the remaining contract term, approved contract value, and projected remaining period of performance of existing contacts. The efforts of this new team are expected to avoid any future contractor performance beyond the approved contract authority. Operations recognizes the absolute necessity for ensuring contract extensions and renewals are started and completed promptly and in accordance with internal schedules and timeliness to prevent contract lapses and service disruptions.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
Approval of the recommendation will have a positive impact on safety. As tires on buses wear, they are regularly replaced as part of a preventive maintenance plan to ensure safe operation of the Metro bus fleet. This Contract Modification guarantees Metro has the capability of maintaining and replacing tires on its fleet.
Financial_Impact
FINANCIAL IMPACT
Funding for this contract modification is included in the FY23 and FY24 budgets in the amount of $2,164,434 for FY23 and $9,506,700 for FY24 in cost center 3120, Quality Assurance, under project 306002, Operations Maintenance and line item 50421, Tires Revenue Equipment.
Impact to Budget
The current source of funds for this action includes Fares, Proposition A/C, Measure R/M, and Transportation Development Act. Use of these funding sources currently maximizes funding allocations given approved funding provisions and guidelines. These funds are operating eligible funds.
Equity_Platform
EQUITY PLATFORM
This action is anticipated to support safety and service quality on the Metro bus fleet, which serves marginalized groups and Equity Focus Communities (EFCs). Bus tire leasing and maintenance services will be performed by qualified service personnel that have experience performing these services. As part of a comprehensive bus maintenance program, bus tire leasing and maintenance will ensure buses remain in a State of Good Repair to provide uninterrupted transportation services for these underserved communities.
The Diversity and Economic Opportunity Department (DEOD) established a 5% Disadvantaged Business Enterprise (DBE) goal for Contract OP83932000-39383. The Goodyear Tire & Rubber Company is currently exceeding the overall commitment with a rate of 5.15% through the utilization of various DBE firms.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
Bus tire leasing and maintenance services for Metro buses supports Strategic Goal 2: Deliver outstanding trip experiences for all users of the transportation system. The inspection and maintenance of tires on buses will eliminate unnecessary tire failures and service delays. This service will ensure patrons and Metro operators experience safe and reliable transportation services.
Alternatives_Considered
ALTERNATIVES CONSIDERED
Staff considered a purchase tire program rather than a lease tire program, where Metro personnel perform the required tire service. This alternative is not recommended because of the increased labor cost to Metro, increased liability, and the added responsibility of properly disposing of thousands of waste tire castings. Staff also considered a lease tire program where Metro personnel provide the required tire service. This alternative is not recommended because of increased labor cost and liability for any unforeseen events.
The existing contracting method greatly reduces Metro’s risk and eliminates the responsibility for the removal, transportation, and disposal of waste tires.
Next_Steps
NEXT STEPS
Upon Board approval, staff will execute Modification No. 8 to Contract OP83932000-39383 with The Goodyear Tire & Rubber Company to continue to provide bus tire leasing and maintenance services.
Attachments
ATTACHMENTS
Attachment A - Procurement Summary
Attachment B - Contract Modification/Change Order Log
Attachment C - DEOD Summary
Prepared_by
Prepared by: James Jimenez, Sr. Manager Environmental Compliance & Service, (213) 922-5870
James Pachan, Sr. Executive Officer, Bus Maintenance, (213) 922-5808
Debra Avila, Deputy Chief Vendor/Contract Management Officer, (213) 418-3051
Reviewed_By
Reviewed by: Conan Cheung, Chief Operations Officer, Transit Operations, (213) 418-3034
