Meeting_Body
OPERATIONS, SAFETY, AND CUSTOMER EXPERIENCE COMMITTEE
MARCH 21, 2024
Subject
SUBJECT: CONTRACT MODIFICATION WITH TOW INDUSTRIES
Action
ACTION: APPROVE CONTRACT MODIFICATION
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to execute Modification No. 1 to Contract No. DR81105000 with Baatz Enterprises Inc. DBA Tow Industries, to increase the contract value by $733,836.74 from $3,922,757.26 to $4,656,594.00, inclusive of sales tax.
Issue
ISSUE
Baatz Enterprises Inc. DBA Tow Industries (Tow Industries) was awarded a contract for nine 35-ton tow trucks in February 2022. In October 2023, Tow Industries advised Metro of a 22% price increase. The increase in cost for the tow trucks was due to material and labor shortages that have become more common throughout the industry since the COVID-19 pandemic. Tow Industries advised Metro that the chassis manufacturer had increased the cost of the vehicle chassis, and the vendor was experiencing significant increases in material and labor cost for the upfitting of the vehicles with tow equipment. Staff conducted a market survey of new tow truck pricing and received quotes from other vendors that were about 25% higher than the original bid price for the tow trucks.
Background
BACKGROUND
In February 2022, the Board approved a contract award to Tow Industries for nine 35-ton tow trucks (3 CNG, 6 Diesel) for a total amount of $3,922,757.26 with a production lead time between 16 to 22 months.
The original tow truck procurement was intended for the replacement of nine of the 13 Metro owned and operated 35-ton tow trucks. The nine tow trucks being replaced have exceeded the Metro vehicle replacement policy of 12 years and/or 150,000 miles. In addition, these nine trucks are unreliable, with excessive mechanical failures, costly repairs, and difficulty in locating parts due to the age of the vehicles. The 35-ton tow trucks will support bus towing requirements for the next 12-15 years. ...
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