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Home My WebLink About12-15-2015 Item 08 - Authorization for SLO Transit Operations & Maintenance Contract Request for Porposals Meeting Date: 12/15/2015 FROM: Daryl Grigsby, Public Works Director Prepared By: Gamaliel Anguiano, Transit Manager SUBJECT: AUTHORIZATION FOR SLO TRANSIT OPERATIONS & MAINTENANCE CONTRACT REQUEST FOR PROPOSALS RECOMMENDATION Authorize the issuance of a Request For Proposal (RFP) to operate and maintain the City’s Transit system. DISCUSSION The City’s Transit Operations and Maintenance (O&M) work is currently contracted out to First Transit Inc. (First Transit). First Transit was awarded the current O & M contract ten years ago via a similar competitive process. The initial contract term was for three (3) years and included the possibility of seven (7) one-year extensions. June 30, 2016 marks the end of the last exercised extension with First Transit. In order to achieve cost savings and operational efficiency, the City is soliciting via the RFP process contractors to bid on providing the City transit services.. These services include employment, training, and retention of drivers, mechanics and other staff necessary to successfully operate the City’s transit system as prescribed by the City. The RFP process is meant to bring structure and transparency to the procurement decision, while reducing risk through open requirements and discussion. The RFP process also provides the City with an “apples-to-apples” cost comparison for purchased O&M services. The RFP bids will be evaluated by a “best-in-value” criterion with the goal of acquiring comparable or even greater service quality O&M services. To help ensure this, Staff has carefully reviewed, revised and solicited direction from the Federal Transit Administration for the purpose of developing an improved contract. After careful review of the current Scope of Work (SOW), staff has eliminated non-applicable items, made corrections and improvements, established clarity and formalized procedures/arrangements to help ensure that vendors are fully aware of the City’s requirements for O&M services. Parallel to improving the SOW language, Staff has also revised the standard Performance Measures. After comparing with other nearby transit systems, a revised Penalties & Incentives section has been added to the new proposed agreement. Penalties (or liquidated damages) would apply monthly if the selected contractor fails to meet specific service performance standards. 8 Packet Pg. 56 Conversely, incentives are provided quarterly if the selected contractor achieves specific high levels of service. Staff believes the proposed SOW provides clear understanding of the City’s requirements while the liquidated damages provide for correction action(s) should they not be met. During the November 17 Study Session of the proposed RFP, the City Council asked questions about the City’s insurance coverage in this contract. As a result, transit staff has been working closely with the City Attorney to insure the City is adequately covered by the language in Section 2 of the contract and in the Scope of Work. Proposed Term of Contract Consistent with Federal Regulations The Federal Transit Administration (FTA) has specific language and recommendations in the Codified Circular of Federal Regulation (CCFR) 4220 regarding the term of O&M contracts. The FTA has stated in part: Although FTA no longer requires prior approval for contract terms longer than five years, grantees remain responsible for conducting their procurement transactions in accordance with the “full and open competition” principle expressed in FTA Circular 4220.1E, paragraph 8a… When deciding the best period of performance for on-going services contracts, grantees need to consider the up-front investment by potential offerors for specialized personnel training and other non-recurring start-up costs (e.g., relocation) that must be recovered over the life of the contract… Staff reviewed factors such as maintaining “full and open competition,” industry peer contract length comparisons and contract periods that allow for “upfront cost recovery;” in determining the contract period. As a result, staff recommends a four (4) year contract with three (3) possible one-year extension option(s). Next Steps Solicitation for responses will be done by publicizing this RFP via various industry periodicals in addition to local notification required by the City’s Municipal Purchasing Guidelines Proposals are tentatively expected to be evaluated at the start of next calendar year, March 2016. A team of industry professionals, both from within the City and outside the City, will review each proposal according to pre-established grading criteria. The top rated vendors will then be invited to formal interviews and final negotiations. The winning proposer (selected contractor) will then be recommended to Council for consideration and award. The new contract will become effective July 1st, 2016. 8 Packet Pg. 57 Event/Task Date 1: MTC Discussion on RFP Scope of Work November 10, 2015 2: Council Study Session on RFP Scope of Work November 17, 2015 3: Council Authorization Issuance of RFP December 15, 2015 4: Issue Request for Proposals (RFP) on Ebid Board December 16, 2015 5: Pre-Proposal Conference (2:00 p.m. PST) January 27, 2016 6: Submit Questions & Clarifications (4:00 p.m. PST) February 5, 2016 7: Response to Submitted Questions February 19, 2016 8: Proposals Due (3:00 p.m. PST) March 9, 2016 9: Pre-Award Survey and Screening March 23, 2016 10: Interview with Selected Contractors March 30, 2016 11: City Council Award Contract May 3, 2016 12: Executes Agreement with Selected Contractor May 4, 2016 13: Pre-Start Up Meeting with Selected Contractor May 4, 2016 14: Contractor Starts Service July 1, 2016 FISCAL IMPACT The RFP ensures a competitive selection process where the City and the selected Contractor will have the opportunity to negotiate efficiencies, service enhancements, cost savings and even added costs. The adopted 2015-17 Budget for the Transit Enterprise Fund included some costs increase assumptions consistent with historic rate increases along with the results of the Short Range Transit Plan. Ultimately, the funding for City’s transit operations will be from the City’s annual distribution of Federal Transit Administration Section 5307 funds, Transportation Development Act (TDA) funds, the Cal Poly Subsidy, and farebox collections. A final agreement with full fiscal analysis will return to Council at the time of contract award. CONCURRENCES The Mass Transportation Committee (MTC) has been notified of the RFP at its November 10th meeting, and that advisory body was able to review and comment on the various terms of the contract. The contract was approved as is without any major changes. ALTERNATIVE 1. The Council may decide to change terms of contract (scope of work). The consequence to this 8 Packet Pg. 58 alternative is that significant changes to the scope may result in changes (potential increases to cost or reductions in the level of service) for the contract. It is suggested that if Council wants additional (or modified work items) included in the RFP that they include these as additional items to be considered as part of the RFP solicitation and negotiation process. Attachments: a Council Reading File - 2015-16 Transit RFP 8 Packet Pg. 59