Meeting_Body
OPERATIONS, SAFETY, AND CUSTOMER EXPERIENCE COMMITTEE
NOVEMBER 16, 2023
Subject
SUBJECT: HR5000 HEAVY RAIL VEHICLE (HRV) PROCUREMENT
Action
ACTION: APPROVE RECOMMENDATIONS
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to:
A. AWARD Contract No. HR5000-2023 to the Hyundai Rotem Company for the manufacturing and delivery of 182 heavy rail vehicles (HRVs), in the amount of $663,688,303 for the base contract buy, exclusive of one (1) contract option for an additional 50 HRVs, totaling 232 HRVs, subject to the resolution of any properly submitted protest(s), if any;
B. APPROVE a combined Life of Project (LOP) budget of $730,057,133, which includes the cost of the vehicle contract of $663,688,303 and Contract Modification Authority of $66,368,830; and
C. NEGOTIATE AND EXECUTE future contract modifications to the Contract up to $1,000,000.
Issue
ISSUE
New HRVs are required to meet the revenue service requirements and enhanced service capacity for Westside Purple Line Extensions (PLE) 2 & 3, as specified in the 30/10 Initiative, as well as replace the existing A650 HRV fleets when they have reached the end of their useful lives.
Background
BACKGROUND
In December 2022, the Board authorized staff to issue a federally funded solicitation for a Best Value Request for Proposals (RFP) utilizing competitive negotiations pursuant to PCC § 20217 for the procurement of the 182 Base Order and 50 Option HRVs. Metro’s Rail Fleet Management Plan FY2020-FY2040, describes the rail fleet requirements to accommodate anticipated growth in ridership, support line extensions and replace vehicles reaching the end of their useful revenue service lives.
The existing A650 HRV fleets consist of 100 vehicles; 30 Base Buy, DC-motor HRVs of which four (4) have been retired and 74 Option Buy, AC-motor HRVs. Based on a 30-year useful life, the Base Buy vehicles are scheduled to be retired between 2022 and 2023, and the Option Buy vehicles between 2027 and 2029.
The HR4000 HRV procurement project will deliver 64 new HRVs by mid-2025; thirty will be used to replace the original 30 A650 Base Buy HRVs, and the remaining 34 HRVs will be used to support the expanded service with the opening of Purple Line Extension 1.
The intent of the HR5000 program is to procure the additional one hundred eighty-two (182) Base Order HRVs anticipated to be needed for PLE Sections 2 & 3, System Service Expansion, and replacement of the existing seventy-four (74) A650 Options Order vehicles.
Discussion
DISCUSSION
Staff’s recommendation presents the firm that is most advantageous to Metro. Hyundai Rotem Company’s offer represents the Highest Rated and Best Value to Metro when all technical and price factors are considered in accordance with the RFP evaluation criteria, including US content and Employment Plan. The Best Value evaluation is inclusive of the vehicle quantities for the Contract Base and Contract Option. The Procurement Summary (Attachment A) further provides the detailed evaluation results and rankings for all proposers, including the weighted scores associated with each evaluation factor.
The 182 HRV Base Order will address the operational service requirements of PLE Section 2 with 20 HRVs; PLE Section 3 with 40 HRVs, replacement of the 74 A650 Option vehicles, which will be reaching the end of their useful revenue service lives in approximately ten (10) years; the remaining 48 HRVs will be used to support Metro’s planned HRV Line service expansion.
If the Board approves this Contract, Hyundai Rotem Company will deliver 46 new HRVs by July of 2027. The balance will be delivered to support committed levels of service for service expansions as well as the 2028 Olympics.
The contract includes incentives to complete delivery of the first three married-pairs (6 pilot HRVs) by February 1, 2027, thirty-nine (39) months following the issuance of NTP. Thirty-six production vehicles are scheduled to be delivered by the end of July 2027 at a rate of minimally four (4) vehicles per month. The contract also includes provisions to impose liquidated damages for late deliveries.
The Contract contains one (1) option, for up to 50 additional vehicles, as part of this procurement action, but the authority to award the options is not included in the staff recommendation. Should Metro determine the need to exercise this option, approval to do so will be requested.
This procurement is in compliance with Buy America and Metro’s Manufacturing Careers Policy.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
The approval of this contract award will have a direct and positive impact on system safety, service quality, system reliability and overall customer satisfaction. The procurement of 182 new HRVs will feature the most current safety systems and augment service levels in addition to replacing the existing A650 series HRVs.
Financial_Impact
FINANCIAL IMPACT
The total requested LOP budget is a combination of contract amount of the 182 Base Order HRVs of $663,688,303 and 10 percent (10%) Contract Modification Authority which equals $730,057,133.
Since this is a multi-year contract, the cost center Manager, project manager, and Chief Operations Officer will ensure that costs will be budgeted in future years.
Impact to Budget
The FY24 planned expenditure of $32,000,000 is included in the combined annual budgets for the aforementioned projects in Project 206037, Cost Center 3043, Rail Vehicle Acquisition, and Projects 865522 and 865523, Cost Center 8510, Construction Contracts/Procurement. The current sources of funds for this action affecting PLE Sections 2 and 3 is a combination of Federal New Starts, TIFIA, and Measure R 35%. Due to the four minute headway requirement for the PLE projects and difference between estimated vs. actual cost per vehicle, it is anticipated that PLE may seek an increase to their LOP in the future to reflect the new vehicle cost and number of vehicles needed, contingent upon receipt of the temporary FTA waiver. Funding sources for the PLE Sections 2 and 3 are planned for the design, construction and procurement efforts; these funds are not eligible for operations. Funding for the replacement vehicles share of the procurement (project 206037) is Proposition A 35%, which is eligible for Rail Operations. The funding sources under this Project (inclusive of Project 865522 and Project 865523) for the 182 HRV Base Order HRVs are sufficient to award the base contract of this recommendation. Staff is actively pursuing additional eligible federal sources. Staff is also pursuing additional State and Local funding sources as they become available to meet the funding needs of this project.
Equity_Platform
EQUITY PLATFORM
Part of the new HR5000 rail vehicles will be used to replace the existing aged A650 Option vehicles and the remaining will be used on the Purple Line Extensions. Approving the recommendations in this board report will support the identified fleet expansion and service needs and will encourage fair, competitive bidding processes for the selection of best value, qualifying contractor to deliver new vehicles on Metro’s existing heavy rail vehicle lines that are currently serving passengers in majority Equity Focus Communities who rely on public transportations to commute to their jobs and other life commitments. Based on the 2019 Customer Survey, the Red and Purple heavy rail lines serve the following ridership:
• 27.7% below the poverty line
• 56.4% had no car available
Rider Ethnicity:
• Latino 38.9%;
• Black 13.1%;
• White 25.8%;
• Asian/Pacific Islander 15.2%;
• Other 6.5%
In addition, these areas include Union Station to Downtown LA, Koreatown (Wilshire/Western), Hollywood, Universal City, and North Hollywood.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
These recommendations support Metro Strategic Plan Goal No. 5) to “provide responsive, accountable, and trustworthy governance within the Metro organization”. This goal strives to position Metro to deliver the best possible mobility outcomes and improve business practices so that Metro can perform more effectively and adapt more nimbly to the changing needs of our customers.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Board of Directors may choose not to authorize the contract award for this project; however, this alternative is not recommended as this project is critical to support the Purple Line Extensions, committed level of service to FTA, Olympic service need, and retirement the oldest HRVs in the fleet.
Next_Steps
NEXT STEPS
Upon Board award approval, a Contract will be executed and a Notice-to-Proceed will be issued to the Hyundai Rotem Company once all insurance and bonding requirements are met. Metro and the Hyundai Rotem Company will then mobilize required resources to ensure timely completion of deliverables by the Vehicle Contractor. Staff will also begin solicitation for consultant services to assist Metro with the Project Management/Control and Technical Support Services.
Attachments
ATTACHMENTS
Attachment A - Procurement Summary
Attachment B - DEOD Summary
Attachment C - Funding & Expenditure Plan
Prepared_by
Prepared by: Annie Yang, Deputy Executive Officer, Operations Rail Vehicle Acquisitions (213) 925-1044
Jesus Montes, Sr. Executive Officer, Vehicle Engineering & Acquisitions (213) 418-3277
Matthew Dake, Deputy Chief Operations Officer, (213) 922-4061
Debra Avila, Deputy Chief Vendor/Contract Management Officer, (213) 418-3051
Reviewed_By
Reviewed by: Conan Cheung, Chief Operations Officer, (213) 418-3034
