HomeMy WebLinkAbout12/15/1992, C-7 - AWARD OF CONTRACT FOR THE REHABILITATION OF THREE TRANSIT BUSES AND AUTHORIZE THE MAYOR TO EXECUTE CONTRACTS. MEETING DATE:
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COUNCIL AGENDA REPORT ITEM NUMBER:n_
FROM: Ken Hampian, Assistant City AdministrativT Officer
Prepared by: Harry Watson, Transit Manager,
SUBJECT: Award of contract for the rehabilitation of three transit buses and authorize
the Mayor to execute contracts.
CAO RECOMMENDATION:
1. Approve the award of the bus rehabilitation contract to the firm of Brumit Diesel of
Santa Maria, Califomia for the rehabilitation of three ten year old SLO Transit
buses.
2. Approve and authorize the Mayor to execute contracts with Brumit Diesel in the
amount of $163,764.
DISCUSSION:
Background
On November 10, 1992 the City Council awarded this contract to the firm of Midwest Bus
Rebuilders in Fresno, California in the amount of $155,124. On December 1, 1992 staff
received verbal communication from Midwest that they were ceasing operations in their
West Coast Fresno location, had terminated key personnel at that location, and thus were
unable to fulfill their contractual agreement with the City.
As noted in the November 10 staff report, a major concern to the City is the protection
of a California Air Resources Board (GARB) waiver for the 1992 computer controlled
engines to be used in this rehabilitation effort. A production run is scheduled for
December 14, 1992 to construct the engine/transmission combinations necessary for
installation in these transit buses. To protect this very valuable production run and waiver,
staff has negotiated with the company that will construct the engines, General Motors'
Detroit Diesel, the purchase of the engine/transmission combinations directly by the City
of San Luis Obispo, if necessary. The CAO report authorizing this purchase is provided
as Attachment 1.
In essence, the City will only directly purchase these engines if, for some unanticipated
reason, the City fails to execute a contract with Brumit. If the contract with Brumit is
completed, then the engines will be sold directly to them and paid for through the
recommended rehabilitation contract. Providing for the direct purchase by the City was
the only way to assure Detroit Diesel of a buyer for these engines, if they were to be
included in the December production run. Including them in the 1992 run was essential
in order to preserve the waiver.
61111pl fj city of San its OBISpo
COUNCIL AGENDA REPORT
Recommended New Vendor
The City already has a very strong working relationship with Brumit Diesel having had
their services used in the overhaul of several of our transit engines over the past year.
We have found them to be very responsive to our needs and the quality of their work has
been excellent. Details of their specific bid are provided in Attachment 2.
FISCAL IMPACT:
A Transit Capital Improvement (TCI) grant application estimated the total cost of
rehabilitating all three of the transit buses to be $210,000, with the grant to support the
maximum allowable 500 of the cost ($105,000). This award of the rehabilitation contract
falls well within the grant approved cost estimate. The recommended vendor's response
for rehabilitating the three buses is $163,764. Assuming there are no unanticipated cost
increases, the actual City-grant contributions will be $80,397 each.
Originally, Brumirs total bid for the three buses was$160,794 (3 X$53,598). This bid was
submitted in September. Since that time, Brumit has experienced a labor cost increase
and is now asking $54,588 per bus, for a total of $163,764 (a $2,970 increase over the
original bid). Despite this increase, Brumit remains the least costly remaining proposal.
Given the length of time which has elapsed since their original bid, staff recommends
agreement with this increase and proceeding with the award (vendors typically only
"guarantee" their bids for a limited period of time).
ALTERNATIVES:
The City Council could choose to reject all proposals and require the process to be
started again. The City would lose its waiver, which would substantially delay the
rehabilitation of the buses.
ATTACHMENTS:
1. CAO Special Report authorizing the direct City purchase of the
engine/transmission combinations to protect the CARB waiver and the production
run.
2. Bid Summary
NOTE: The Bus Rehabilitation Specifications, the RFP, and the vendor proposals
are available for review in the City Clerk's Office.
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C.A.O. SPECIAL REPORT
FROM: Ken Hampian, Assistant City Administr 'ye Officer
Prepared by: Harry Watson, Transit Manager
SUBJECT: Direct purchase by City of engine/transmission for bus rehabilitation to
protect California Air Resources Board (CARE) waiver.
RECOMMENDATION: Waive the competitive bid process and authorize staff to
purchase from Valley Detroit Diesel three engine/transmission combinations in the total
amount of $89,156.93, if the Council does not award the bus rehabilitation contract on
December 15, 1992.
DISCUSSION:
Background
Through City Council action we have previously awarded a contract for the rehabilitation
of three of the ten year old transit buses to the firm of Midwest Bus Rebuilders in Fresno,
California. We have also obtained from CARB a waiver to use non-trapped equipped
1992 diesel engines. In concert with Midwest, the City secured a production run for these
engines which was scheduled to begin construction December 14, 1992.
The specific 6V92 DDEC engine is the only engine that can be used in the repowering the
10 year old.transit coaches. Because of the distributor and dealer network established
by General Motors for Detroit Diesel engines, they can only be purchased from Valley
Detroit Diesel in Bakersfield, California and are sold through their dealer network. A"sole
source°purchase is requested, if a direct City purchase is necessary, as further discussed
below.
Current Status
On the afternoon of December 1, 1992 the City was informed by Midwest Bus Rebuilders
that they would be unable to honor the contract and that they were closing their facility
in Fresno. In addition, they had terminated their West Coast Vice President, Mr. Bob Hall,
and their shop foreman in Fresno, and were ceasing business immediately.
On Wednesday, December 2, 1992 Valley Detroit Diesel was contacted in an effort to
salvage the production run on these engines and to salvage the CARB waiver. They
informed staff that Midwest had contacted them the day before and had canceled the
order for those engines. Staff asked Valley if they could secure approval to sell the
engines directly to the City of San Luis Obispo in an effort not only to salvage the
production run, but to protect the waiver. We were called back that same day and
advised that General Motors had in fact approved this special request and they could sell
the engines directly to the City.
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ATTACHMENT 1
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C.A.O. SPECIAL REPORT
Also, on December 2 we received a call from a vendor who had also responded to the
Request for Proposals informing us that they had heard that Midwest was going out of
business and they wanted to inform us that they were ready and willing to honor their
original proposal submittal in a timely fashion. That vendor is Brumit Diesel of Santa
Maria who placed a close second in the rating for the award of the contract.
Recommendation
To ensure that the City of San Luis Obispo does not lose its production run and its
subsequent waiver for these engines, it is recommended that the City supply Valley
Detroit Diesel with a purchase order for three engines and transmissions for the
rehabilitation project. The authority for this recommendation is from the City's Purchasing
Procedures 3.24.060 located on page 290-2. This section deals with waivers of
competitive purchasing and deals specifically with single source purchases.
It is important to emphasize that this direct purchase will only be necessary, if for some
unanticipated reason the rehabilitation contract for the buses is not approved in a timely
fashion. Staff will attempt to gain Council approval on December 15 for the award of this
bus rehabilitation contract to Brumit Diesel.
FISCAL IMPACT:
The cost of the engines is $29,718.98 each, or $89,156.93 total. The City would have
been paying for these engines and transmissions to Midwest as part of the rehabilitation
project under the original contract. It is probable that by the time the engines are
constructed a second vendor will have been awarded the contract and, in fact, these
engines will be purchased directly by that second vendor effectively negating this action.
This action acts as an insurance policy for the City not only to protect the engine
production, but to protect our waiver from the State.
ATTACHMENTS:
1. Copy of Letter to Valley Detroit Diesel dated December 4, 1992
2. Purchase Order
iPROn D nn, City Administrative Officer
rg sen ity ttorney
Bill Statler, Finance Director C_'—�
II City OSAn
luis OBISPO
990 Palm Street/Post Offlce Box 8100 • San Luls Obispo, CA 93403.8100
December 4, 1992
Mr. Phil Childress
Valley Detroit Diesel
4000 Rosedale Highway
Bakersfield, CA 93308
Dear Phil:
The purpose of this letter is to recap our various telephone conversations this past week,
the week of November 30, 1992, concerning the eventual purchase of three 6V92 Detroit
Diesel DDEC engines and ATEC transmissions. Both Valley Detroit Diesel and the City
of San Luis Obispo have been contacted by Mr. Dan Morrill of Midwest Bus indicating that
Midwest Bus is ceasing operation at its Fresno location and would not be able to honor
the City of San Luis Obispo's contract for the rehabilitation of three of its transit buses.
They also contacted your organization and canceled the order for the construction of the
engines and transmissions involved in this rehabilitation effort.
I, in turn, contacted you by phone expressing my desire to continue the production run
of those engines to protect the Califomia Air Resources Board (CARE)waiver that the City
now holds for 1992 DDEC engines. I stated that we would immediately embark on
obtaining a reaward of the contract with the next most responsive vendor that had
responded to our Request for Proposals process, and would place the contract with
them. I also stated that most likely this could happen in a timely fashion so that the
engines after construction could be delivered directly to that vendor. In the event that did
not happen, I assured you that the City of San Luis Obispo was interested in purchasing
those engines to protect that waiver. Your response was that as long as you knew that
these three engines had a home, that you would continue with the production; thereby
ensuring that they will be produced in 1992.
1 have made initial contact with the second responsive vendor and they have indicated
their willingness to accept the contract and proceed with the rehabilitation effort with all
due haste. Administratively to make that happen, I will be preparing both a Council
Agenda item to reaward the contract and a City Administrative Officer report authorizing
the City to purchase the engine transmission combinations to protect our waiver. As we
have discussed, this latter action is an insurance policy for both the City to protect the
waiver for the construction of the engines and for Valley Detroit Diesel to be assured that
they have a customer for these engines. Most likely the contract will be awarded to
another vendor in a timely fashion so that the engines could be sold directly to that new
vendor as soon as they are available.
Page Two
Childress - December 4, 1992
In closing, on behalf of the City I want to thank you for working with us on this matter and
I feel comfortable that it will result In a mutually satisfactory result for both Valley Detroit
Diesel and the City of San Luis Obispo.
Sincerely,
01
00
Harry Watson
Transit Manager
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childress.ltr
6.7-(oo
BID SUMMARY
L.A.
MIDWEST :BRUMIT FREIGHTLINER
TIME 2-4 WKS START 2 WKS START 8 WKS START
4 WKS EACH 4 WKS EACH 3-5 WKS EACH
FRT AXLE 1754 2592 3097
ADD'L AXLE 1141 2892
DR. AXLE HOUS 2005 2046 2717
HUBS 505 295 771
BRKSYS. 2322 1467 3917
AIR SYS. 1653 194 1329
BATTERY 1018 472 948
INTERIOR 2803 NONE 2753
EXTERIOR 5710 3775 3581
COOLING 1374 244 1107
DRIVESHAFT 101 147 NONE
EXHAUST 575 776 572
TRANS. INC.IN 14,480 INC.IN
RPWR RPWR
ENGINE INC.IN INC.IN INC.IN
RPWR RPWR RPWR
REPOWER 30,396 27,110 37,237
TRANSPORTATION 350 NONE NONE
TOTAL 51,707 53,598 60,921
12/92
Adjusted + 990
Per Bus Total $54,588
x 3
Total Cost $163
ATTACHMENT 2 ��
BID SUMMARY
COMPLETE TEAM
COACH BID* KEITH'S
TIME IMMEDIATE 6 WKS START
FRT AXLE 2200 2452 NONE
ADD'L AXLE 1800 2608 NONE
DR. AXLE HOUS NONE 1930 NONE
HUBS 1040 NONE
1930
BRKSYS. 3660 NONE
AIR SYS. 1360 NONE NONE
BATTERY 740 380 NONE
INTERIOR 4200 5141 4123
EXTERIOR 3100 5067 NONE
COOLING NONE NONE NONE
DRIVESHAFT 310 147 NONE
EXHAUST 1280 NONE NONE
TRANS. INC.IN INC.IN NONE
RPWR RPWR
ENGINE INC.IN INC.IN NONE
RPWR RPWR
REPOWER 48,000 42,387 NONE
TRANSPORTATION 500 NONE NONE
TOTAL 68,190 62,042 4,123
*Bakersfield Team Bid of Three Vendors
The Gas Comp, MEETING A-G ON
DATE /2=1TEI�f# Sterling
North Coastal Division
Diitri.-t Manager
December 15, 1992
Southern California
The Honorable Peg Pinard Gas Company
Mayor of San Luis Obispo 7012 Pacific Sneer
P.O. Box 8100 suite e
San Luis Obispo, CA 93403-81W San Luis Obispo,CA
93401-3693
Dear Peg: tel 805 5.74-8010
Enclosed is a check from The Gas Company for $17,500 as our part of the City's far8066•w-3407
recent purchase of ten clean fueled CNG pickups. These ten compressed natural gas
fueled trucks are a significant step toward the effort of keeping the air in San Luis
Obispo clean.
The City, including both the Council and the staff, deserves to be commended for
spearheading the effort to bring clean fueled fleet vehicles to our area. Being one of
the first to commit to clean fuels for fleet vehicles took a bit of courage on your part.
We at The Gas Company feel the efforts made by the City will be of great benefit to
the community by keeping the air clean.
Please let me know if you need additional information on CNG vehicles, or if there are
any problems that need to be addressed. I am looking forward to workin with the
staff on the upcoming purchase of CNG transit buses. We currently have a $7,500 per
bus incentive available to help offset the cost of these clean fueled buses.
It has been a pleasure working with members of the City staff on this project, and I
hope it will be a continuing effort.
Sincerely,
VA,04.-o
Vic Sterling
District Manager
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Enclosure - check
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David Romero CAo 13 M.Da
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