General Manager 334 Front Street Ketchikan, AK 9990 1
Phone (907) 228-5603 Fax (907) 225-5075
TRANSMITTAL MEMORANDUM
TO: The Honorable Mayor and City Council
FROM : David Martin, Assistant General Manager
DATE: May 9, 2016
RE: Contract No. 16-21 - Swan Lake Fixed Wing Aircraft Service, Pacific Airways, Inc.
At its meeting of May 5, 2016 the City Council deferred action on the above contract, and on the subsequent appeal that was filed by Taquan Airline, Inc. In deferring action, the City Council directed staff to discuss the matter with SEAPA as the contract is to transport KPU employees to and from the Swan Lake facility. SEAPA had expressed concerns relative to wanting more involvement in the contract, and expressed concerns regarding other issues such as parking and the insurance levels of the air carriers.
As indicated in the attached memorandum from Electric Division Operations Manager Mark Adams, Pacific Airways has agreed to increase their insurance level from $500,000/seat & $5,000,000/occurrence, to $1 ,000,000/seat & $1 0,000,000/occurrence, matching the levels preferred by SEAPA as outlined in their May 5, 2016 letter to the City Council.
The basis of award is the per flight cost between Ketchikan and Swan Lake. Pacific Airways, Inc. submitted the apparent low bid in the amount of $420/flight. The existing contract with Taquan Air provides for a per flight rate of $467.45.
A Notice of Intent to Award was issued on April 20, 2016.
Mr. Adams will be attending the City Council meeting of May 19, 2016, in order to address any questions and/or concerns that Council members may have.
Two motions are currently on the table for City Council consideration.
Moved by Sivertsen, seconded by lsom the City Council deny the appeal of Taquan Air, Inc. concerning award of Contract No. 16-21 , Swan Lake Fixed Wing Aircraft Service to Pacific Airways, Inc. to the next regular Council meeting.
Moved by Sivertsen, seconded by lsom the City Council accept the bid of Pacific Airways, Inc. in the amount of $420 per flight for Contract No. 16-21 , Swan Lake Fixed Wing Aircraft Service; authorize funding from the 2016 Electric Division's Swan Lake Travel-Business Account No. 600.01; and direct the general manager to execute the contract documents on behalf of the City Council. RECOMMENDATION
It is recommended that the City Council adopt Motion No. 1 denying the appeal of Taquan Airline, Inc. to Contract No. 16-21 and that the City Council adopt Motion No. 2 accepting the bid of Pacific Airways, Inc. in the amount of $420 per flight for Contract No. 16-21 , Swan Lake Fixed Wing Aircraft Service; authorizing funding from the 2016 Electric Division's Swan Lake Travel-Business account (Account No. 600-01 ); and directing the General Manager to execute the contract documents on behalf of the City Council.
Recommended Motion No. 1 I move that the City Council deny the appeal of Taquan Air, Inc. concerning award of Contract No. 16-21 , Swan Lake Fixed Wing Aircraft Service to Pacific Airways, Inc.
Recommended Motion No. 2: I move that the City Council accept the bid of Pacific Airways, Inc. in the amount of $420 per flight for Contract No. 16-21 , Swan Lake Fixed Wing Aircraft Service; authorize funding from the 2016 Electric Division's Swan Lake Travel-Business account (Account No. 600-01 ); and direct the General Manager to execute the contract documents on behalf of the City Council.
AGENDA- 05119116- KPUUB1 Electric Division I 065 Fair Street Ketchikan, AK 99901
Phone: (907) 225-5505 Fax: (907) 247-0755
Your Cammamity. Yow Urility TRANSMITTAL MEMORANDUM
TO: David Mru1in, KPU Assistant General Manager
FROM: Mark Adams, Electric Operations Manager
DATE: May 9, 2016
SUBJECT: Contract No. 16-21 Swan Lake Fixed Wing Aircraft Service
Pacific Airways has agreed to increase their insurance level from $500,000/seat & $5,000,000/occurrence, to $1 ,000,000/seat & $1 0,000,000/occurrence, matching the levels preferred by SEAPA per their May 5111 memo to the City Cotmcil.
Also, as noted in KPU's April 29111 memo regru·ding Taquan Air's appeal, dedicated parking for the Swan Lake personnel and freezer/cooler space are available.
CC: Andrew Donato, Electric Division Manager
KETCH I KAN PUBLIC UTILITIES Office of the City Clerk Katy Suiter, City Clerk City of Ketchikan, Alaska Kim Stanker, Deputy City Clerk
To: Mayor and City Council
From: Katy Suiter, City Clerk
Date: April28, 2016
Subject: Appeal ofTaquan Air for Award of Contract No. 16-21- Swan Lake Fixed Wing Aircraft Service
Bids for Contract No. 16-21 - Swan Lake Fixed Wing Aircraft Service were opened on Thursday, April 14, 2016. Notices of intent to award to contract to Pacific Airways, Inc. were mailed on Wednesday, April20, 2016. Taquan Air has filed an appeal, which was received in my office on April 28, 2016.
Section 3.12.042(b), (c) and (d) of the Ketchikan Municipal Code outlines the parameters for filing an appeal regarding the award of a contract:
(b) Any bidder or proponent which has any objection to the recommended award of bid or proposal and which claims to be the lowest responsible bidder or more qualified proponent shall file a written notification of appeal with the city clerk. The notification of appeal shall specifically state all of the reasons for the appeal, the specific action requested by the bidder or proponent, the specific parts of the bid or proposal or bid or proposal documents on which the appeal is based, the reasons the bidder or proponent claims to be the lowest responsible bidder or most qualified proponent, and all statements, documents and other relevant materials which the bidder or proponent will submit in support of its appeal. The notification of appeal shall be filed with the city clerk by either:
(1) Five p.m. on the Thursday one week prior to the city council meeting where the bid or proposal is to be awarded; or
(2) Within five calendar days from the date the notice of intent to award was delivered to the bidder or proponent which filed the notification of appeal, whichever is earlier. ln no event, however, shall a bidder or proponent have less than two weekdays from the time it receives the notice of intent to award until the time it is required to have filed a notification of appeal. Not later than two days before the city council meeting where the bid or proposal is to be awarded, the city clerk shall notify all other bidders or proponents of the appeal and of their right to contest the appeal. (c) The council shall hear the appeal and any responses or information from other bidders or proponents. The council may then, without further opportunity for appeal, award the contract to any bidder or proponent.
(d) A bidder or proponent which objects to the notice of intent to award a bid or proposal, but which fails to timely and completely file a notification of appeal with the city clerk, shall have no right to appeal or contest the award of bid or proposal, and shall have no claim or cause of action relating to the bid or proposal process, the bid or proposal documents and specifications, the bids or proposals themselves, or the award. A bidder or proponent which has submitted the bid or proposal recommended for award but which does not respond to a notification of appeal by either submitting a written response to each of the reasons for appeal or by presenting such response at the council meeting when the appeal is heard, shall have no right to appeal or contest the award of bid or proposal, and shall have no claim or cause of action relating to the bid or proposal process, the bid or proposal documents and specifications, the bids or proposals themselves or the award. The council may, in its discretion, consider any objection whether or not a complete or timely notification of appeal or response has been filed or presented but any such consideration shall be fmal and not subject to appeal, contest, claim or cause of action.
According to telephone records, the Electric Division received a telephone call from Taquan Air relating to the notice of intent to award at 2:24p.m. on April21, 2016. In accordance with (b)(2) above, an appeal must have been received by 5:00p.m., April 26, 2016. Accordingly, a motion has been prepared for Council consideration below.
Recommended Motion: I move the City Council deny the appeal of Taquan Air, Inc. concerning award of Contract No. 16-21, Swan Lake Fixed Wing Aircraft Service to Pacific Airways, Inc .. Electric 1065 Fair Street Ketchikan. AI<. 99901
Phone (907) 225-5505 Pax (907) ::!.4 7-0755 Vour Community. Your Uri/;1)•
April20. 2016 Mr. Brien Salazar Taquan Air 4085 Tongass Avenue Ketchikan, Alaska 99901
Rc: Intent to Award Contract No. 16-21, Swan Lal Dear Mr. Salazar: Please be advised that the City of Ketchikan d/b/a Ketchikan Public Uti Iities intends to award the referenced project on May 5, 2016 to Paci fie Airways. [nc. Three bids were received for the contract: • Pacific Airways ($420.00/flight; $12.00/airport; $325.00/standby) • Taquan Air ($439.00/Hight; $25.00/airport; $360.00/standby) • Misty Fjords Air & Outfitting ($467.40/flight; $25.00/airport~ $360.00/standby) Any bidder which has an objection to the award of the bid and which claims to be the lowest responsible bidder shall tile a written notification of appeal with the City Clerk. The notification of appeal shall state the reason(s) for the appeal. the specific action requested by the bidder, the specific parts of the documents on which the appeal is based, and all. statements. documents and other relevll!lt materials that the bidder will submit in support of its appeal. The notification of appeal shall be tiled with the City Clerk by the earlier of the following times: 1) 5:00 p.m. on the Thursday one (I) \oveek prior to the City Cow1cil meeting where the bid is to be awarded; or 2) within five (5) calendar days of the date the [ntent to Award was delivered to the bidder tiling the notification of appeal. The City of Ketchikan d/b/a Ketcl1ikan Public Utilities thanks you for your bid nnd hopes to see yom interest extended to om future projects. ~Mark Adams~~ Electric Operations Manager EST. 1977 Alaska April 25, 2016 REC.EIVED Mark Adams Electric Operations Manager-KPU APR 2 8 2016 1065 Fair St. Ketchikan, AK, 99901 CITY CLERK'S OFFICE CITY OF KETCHIKAN, AK RE: Appeal of Intent to Award Contract No. 16-21, Swan Lake Fixed Wing Aircraft Service Dear Mark: Taquan Air would like to file an appeal to your recent decision to award the Swan Lake Fixed Wing Aircraft Service to Pacific Airways based on the difference of $19/ flight. While we understand the obligations you are under to choose the most cost effective means of awarding City contracts we are confident that the difference in value ofTaquan Air's proposal far outweighs the sma ll difference in the bids. When shopping air transportation, the City has a fiduciary responsibility for the safety of your employees and contractors. At a minimum, consideration to commitment and investment in safety, insurance, past performance, fleet makeup, and customer support should be valued in addition to t he cost of flights. Taquan Air is a Medallion Shield Carrier and has superior investments in safety, pilot training, much higher insurance limits, maintenance, parts inventory, past performance, support capabilities, aircraft, and parking. I would encourage you to take a look at some of these items in the attached document and compare them with those of the low bidder. Any independent FAA representative, independent auditor, or insurance broker would confirm Taquan's superior safety and support capacities and far outweigh those of the lowest bidder. Taquan Air has been proud to provide the aircraft services under the Swan Lake Fixed Wing Contract for the last 14 years. We have consistently provided safe and reliable transportation for KPU in addition to providing amenities like ample free parking, use of our walk-in co oler and freezer, secure storage areas required by the US Postal Service, and use of freight carts to assist with loading aircraft. Since the internal KPU announcement of award, we have been approached by several KPU employees concerned about losing our high regard to safety and numerous customer amenities we provide. In future aircraft service proposals, I would encourage you to weigh and evaluate the leve l of the air carrier's participation in the Medallion Program, safety sensitive criteria, support capability, and insurance limits among other things. These elements are critical in evaluating the safety and capability of an air carrier to t ransport your employees over and above price alone. I would also encourage you to call Jerry Rock, Executive Di rector ofthe Medallion Foundation to learn about the benefits and value of carriers participating in the program. He can be reached at (907)-575-4161. Please let me know if you have any questions or would like additional informat ion. S i nc~PerrPelv ~ z v-- Brie sa-rafa? Preside~nd CEO Venture Travel, LLC • dba Taquan Air • 4085 Tongass Avenue • Ketchikan , AK 99901 • 907.225.8800 ph • 907 .228.4605 fx - www .taquanair.com Table of Contents 1 . Scope of Operations & Past Performance 2 1.1. Scheduled Flights 2 1.2. Charter Operations 2 1.3. Tourism 2 1.4. Operating Hours 3 2. What Sets Taquan Air Apart 3 2.1. Flight Safety 3 2.1.1. Medallion Program Safety Plan 4 2.1.2. Capstone Technology 5 2.1.3. Safety Culture 5 2.2. Facilities 6 2.3. Support Capability 7 2.3.1. Maintenance Program 7 2.3.2. Aircraft 7 2.4. Personnel & Training 8 2.4.1. Pilot Training & Flight Operations 8 2.4.2. Insurance Limits 9 2016 KPU Proposal Page 1 Submission Due Date 04-14-16 1. Scope of Operations & Past Performance Taquan is an aviation leader, operating year round with a fleet of 12 De Havilland Beaver Aircraft, one Cessna Caravan and three De Havilland Turbine Otters, employing over 70 people, and operating two 10,000 square foot full support maintenance facilities. The company upholds the highest safety standards in the industry and is one of only eleven Medallion Five Star Shield Carriers in the state of Alaska. Taquan has some of the most experienced pilots in S.E. Alaska and specializes in daily scheduled service, charters to remote locations throughout S.E., and extensive tourism operations. Taquan has provided safe and reliable air transportation services under the KPU Fixed Wing Contract for over 14 years, since 2002. 1.1. Scheduled Flights Taquan Air operates scheduled flights throughout Southern S.E. Alaska, with daily scheduled service, supplying over 18 communities regular transportation and essential supplies through personal freight shipments, US mail, and UPS Ground Packages. In 2001, after months of safety, financial, and operational scrutiny by the U.S. Department of Transportation, Taquan Air passed a financial and operational fitness testing determination and was awarded a 401 Certificate allowing the company to transport US Mail to over 18 different communities. Additionally, Taquan operates a US Department of Transportation Essential Air Service (EAS) Subsidy Contract for service to Hydaburg, Alaska. The company prides itself on offering safe, quality and efficient service to residents of these communities. 1.2. Charter Operations Taquan is well known for its dedication to unparalleled safety standards, employing some the most experienced pilots in the area, and operating the best maintained aircraft in the area. As a result the company attracts a number of charters throughout S.E. Alaska. Taquan's charter operations include fly-out fishing charters, on-demand or independent flightseeing charters, and commercial or government contracts. Taquan currently maintains commercial and government charter contracts with: USDA Forest Service Fixed-Wing Contract since 2000 United States Postal System since 2001 Department of Transportation Office of Aircraft Services (OAS) Alaska State Troopers KPU Fixed Wing Contract for the Swan Lake Hydroelectric Facility since 2002. 1.3. Tourism 2016 KPU Proposal Page 2 Submission Due Date 04-14-16 Taquan Air upholds the highest insurance standards in the industry and this has helped the company maintain strong relationships with all major cruise lines serving Alaska. Taquan has been recognized by Princess Cruise Lines with a "Tour of the Year'' award, World Residensea with a "Top 10 Tour Operators in the World", and the Ketchikan Visitor's Bureau for "Outstanding Service". Under management's leadership, Taquan has been successful in becoming a "Five Star Tour Operator'' and a featured provider of quality flightseeing products. The company maintains vendor contracts with the following companies: Princess Cruises, Holland America, Carnival Cruises, Regent Seven Seas, Royal Caribbean Cruises, Celebrity Cruises, Oceania Cruise Line, Silver Seas Cruises, Crystal Cruises, World Residensea, Disney Cruise Line, and Norwegian Cruise Line. 1.4. Operating Hours January thru April Monday through Saturday ?am to Spm May thru September 7 days a week 6am to 7pm October thru December MondC!Y_ throLJg_h SaturdC!Y_ ?am to 5pm The company's customer service agents are trained to accommodate all freight and passengers during the hours of operation. The freight department is also available to complete delivery and pick up requests. Taquan Air's hours are seasonal as noted above. 2. What Sets Taquan Air Apart? The name Taquan, meaning little city by the sea, has been synonymous with aviation in Southeast Alaska for over 30 years. Venture Travel, LLC dba Taquan Air is the successor to Taquan Air Service, Inc. when the former company was purchased in the spring of 2000. This brand strength, combined with the importance current management has placed in safety and business relationships has given Taquan Air an advantage in attracting and maintaining high profile business contracts. The company strategy focuses on safe, quality, and profitable operations by using standardized equipment and maintaining close customer relationships. Taquan Air utilizes current staff and outside organizations to manage human resources and employee benefits. Taquan Air follows the State of Alaska, Department of Labor's Employment Practices and Working Conditions. In an effort to improve productivity and limit job turnover, Taquan Air provides and encourages training opportunities to enhance current skills, and boost employee satisfaction with their jobs and working conditions. Furthermore, the company uses Generally Accepted Accounting Principles (GAAP) as a guideline for performing all accounting functions. This is followed up by conducting financial reviews and/or audits of accounting practices by a third party Certified Public Accountant each year. Taquan Air uses other government accounting payment processes such as: USPS - SAMS Alaska and The Department of Transportation, all of which are connected to the CCR. Company Contact Information Corporate Headquarters 907-225-8800 4085 Ton_gass Ave Corporate Accounting 907-228-4609 4085 Tongass Ave Website Address [email protected] www.taquanair.com National Toll Free Number 1-800-770-8800 2016 KPU Proposal Page 3 Submission Due Date 04-14-16 2.1 . Flight Safety Taquan Air continuously monitors, measures, and improves existing policies and procedures. This commitment is to ensure that all flights are operated above the safety standards set by the industry. These efforts are aligned with our voluntary participation in the Medallion Shield Program and are merited by our five-star shield achievement. Additionally, the company has an extensive Safety and Training Program to ensure that each flight is operated with the highest regard for the safety of its employees and customers. This also requires each pilot to complete and pass Taquan Air's FAA approved Training Program. The standards set forth by Taquan Air surpass the standards set forth by the FAA, including those regarding weather minimums. 2.1.1. Medallion Program Taquan Air has been a voluntary participant in the nationally acclaimed Medallion Foundation Aviation Safety Program since 2004. This program became the cornerstone of our safety culture and commitment to safe operations. The Medallion Foundation, Inc. is a non-profit aviation safety organization that provides management resources, training and support to the Alaskan aviation community. The Medallion Five Star Shield program is an enhanced Safety Management System (SMS) that takes a business-like approach to safety, providing for the setting of goals as well as planning and measuring performance in specific areas through the use of System Safety concepts. The FAA supports the Medallion Foundation in the facilitation of this program. Additionally, the standards of the Foundation exceed those required by FAA regulations in almost all areas. The guidelines have been enthusiastically endorsed by the FAA as well as the insurance industry and are looked upon as a positive step for the aviation industry in Alaska. The FAA jointly signs a certificate for the award of a Star after the Foundation personnel determine an operator has met the requirements of that star. Once an applicant has received all five Stars and passed a six-month audit, the applicant is eligible to be evaluated for the Medallion Shield. If that evaluation is passed successfully, the applicant will become a Medallion Foundation Shield Operator. The program was established to provide safety management systems and support to Alaska aviators. The foundation uses a Five-Star Program to provide process guidelines, training, and follow up with audit support and coordination to ensure compliance. Taquan Air has been awarded 5 out of the 5 stars and has been awarded the coveted Medallion Shield award each year since 2008. In order to maintain the Shield status, an operator must successfully pass an audit each year. If the operator does not pass the annual audit or if Medallion personnel note during visits that a specific Star is not being properly addressed, the Star and therefore Shield status is revoked. PCATD/Simulator Training Program -This star includes a comprehensive classroom 'f.( training program as well as training on a PC based computer simulator for all pilots. Taquan Air Awarded May 2004 2016 KPU Proposal Page4 Submission Due Date 04-14-16 Operational Risk Management - ORM provides analytical tools and a system of checks ~ and balances between management, dispatchers, and pilots to identify hazards and manage each flight's risk factor before the flight is dispatched. Taquan Air Awarded November 2004 Maintenance and Ground Service Operations - These operations must include specific quality control, detailed staff training, and man power in accordance with star requirements. Taquan Air Awarded April 2005 Safety Program -The safety program includes safety meetings and audits, the use of root-cause analysis, hazard identification, preventative measures, incident investigations, trend analysis, prompt corrective action, and a viable emergency response program. Taquan Air Awarded April 2006 Internal Audit Program - Incorporation of a proactive internal audit system that includes I , all personnel and focuses on the use of systems safety principles to ensure company regulatory compliance. Taquan Air Awarded May 2008 2.1.2. Capstone Technology Taquan Air has installed state-of-the-art glass cockpit Capstone navigation technology in all aircraft. Taquan Air was the first carrier in the Ketchikan area to adopt and participate in the FAA's Capstone Program. This program is intended to reduce the incidence of weather-related accidents, mid-air collisions and terrain based concerns. Capstone provides flight information, location, weather, traffic, and terrain and gives pilots greater decision making capabilities. 2.1.3. Safety Culture & Program A Safety Culture is something an organization "is" by incorporating the beliefs, attitudes, and values of its management and employees regarding the pursuit of safety. It is also something that an organization has ... the structures, practices, controls, and policies designed to enhance safety. Taquan strives to maintain a culture wherein our employees are willing to report their errors with no fear of retribution or reprisal. The effectiveness of Taquan Air's system safety depends upon honest and candid disclosures of failures, hazards or actions. We achieve this through our anonymous safety reporting system. All Taquan Air operations are conducted in a professional and disciplined manner and safety shall be considered paramount. 2016 KPU Proposal Page 5 Submission Due Date 04-14-16 Taquan Air strives for a corporate safety culture where employees report hazards or mistakes without fear of reprisal. Analysis and feedback on hazards, risks, and risk control measures may dictate reform or revision of procedures to enhance safe operations. Effective communication leads to an informed company where management and employees are aware of factors affecting System Safety. Furthermore, risk management is at the core of all ground, flight, and maintenance operations and will be incorporated during current, ongoing, and future operations to identify hazards and control risks. The goal of risk management is not to completely eliminate all risk, since that is unrealistic. Instead our goal is to deal with risk in a way that creates a safe working environment while remaining an efficient, competitive, and profitable organization. Taquan Air uses a Systems Safety approach to maximize efficiency and profitability while minimizing exposure to hazards posing unnecessary or elevated risk. Safety policies and procedures set forth in the Safety Program manual apply to all employees, at any location, when performing duties for Taquan Air. The primary focus of the Safety Program is on human performance system safety. Human error is the leading primary cause of aviation accidents, while equipment failure contributes only a small percentage to the probable root cause of most accidents. The key to human performance system safety enhancement lies within the corporate culture. 2.2. Facilities Taquan Air moved into a brand new, custom built, state of the art facility in October of 2007. The 16,000 square foot facility is located in Ketchikan's 6 acre Harbor Point Business Park located at 4085 Tongass Avenue. Vehicles access the business park via separate entrance and exit driveways from Tongass Avenue, with loading, unloading and staging areas as well as ample short and long term parking for customers. The spacious is specifically designed to handle groups large or small. Features in this spacious complex include: Terminal Building • Passenger lounge with water view • Handicapped accessible passenger facilities • Administrative and flight operations offices • A large conference room and training facility • Parking Available for over 100 vehicles. Maintenance Hangar • Hangar space for up to six (6) aircraft • Fully equipped and staffed maintenance bays • Expanded parts department and inventory • Top of the line tooling and equipment • Office spaces and an employee break room Ramps and Floats • Extended passenger access ramps • Handicap accessible 2016 KPU Proposal 6 Submission Due Date 04-14-16 • Non-skid surfaced floatplane dock • Over 600 feet of floatplane dock space • Covered staging area with seating Freight Department • Extensive storage for freight, cargo and US Mail • Eight (8) carts with tow hitch for easy transport to the dock with a four wheeler • Large walk-in cooler & freezer & industrial floor scale 2.3. Support Capability Aircraft reliability is determined in a large part by the level of equipment, tools, and spare parts the company maintains. Taquan Air currently has $1 ,000,000.00 invested in equipment, parts, and tooling to maintain detailed beaver aircraft. Having ample stock and resources allows the company to minimize aircraft downtime. Taquan Air maintains the largest fleet of De Havilland Beavers in Alaska and has everything needed to reliably operate a standardized fleet. This includes, but is not limited to, a substantial inventory of parts, tools, and equipment. This infrastructure has allowed Taquan to house many necessary elements to conduct maintenance more productively and efficiently than other carriers working with lesser experience, parts or equipment. 2.3.1. Maintenance Program Taquan Air maintains a policy of adherence to the highest FAA Aircraft Maintenance Standards and routinely exceeds those standards. Furthermore, Taquan has been proactive in developing an aging aircraft maintenance program for the De Havilland Beaver. The company has an established aircraft refurbishment program. This is a thorough process that takes over 2,000 man hours per aircraft to complete. The company has found that completely overhauling the aircraft significantly reduces inspection time and has reduced aircraft downtime by 150% due to the like-new status of a refurbished aircraft. Taquan Air's maintenance facility operates year-round. In the off-season the maintenance department operates during normal business hours, from 8 a.m. to 5 p.m. and 24 hours a day, 7 days a week from May through September. Taquan Air believes safety starts with hiring qualified and knowledgeable personnel. Currently, the company employs fourteen full time maintenance personnel which include eight Aircraft & Powerplant (A&P) Mechanics with five Inspector's Authorization. During the summer season all 100 hour inspections are conducted at night while the winter is used to complete heavy aircraft maintenance, aircraft overhauls, airworthiness directive compliance, and annual inspections. 2.3.2. Aircraft The Taquan Beaver fleet is an identical fleet in pristine condition with all major upgrades and modifications completed. Management has been successful in developing a De Havilland Beaver rebuild process that includes overhauling the entire aircraft into the "like-new" condition. This process includes re-skinning 80% of the fuselage, extending the cabin, adding an extra window seat, refurbishing all mechanical systems, upgrading the instrument panel and wiring, 2016 KPU Proposal Page 7 Submission Due Date 04-14-16 installing four additional windows, putting in a new interior, rebuilding the floats, replacing the engine and repainting the aircraft. Upon completion the aircraft look and appear new. During a 200 7 Taquan Air aircraft inspection, a lliglz mnking FAA representative fi'om the District Flight Standards Office, congratulated company president Brien Salazar on 11/zaving the nicest fleet ofDe Havillandjloatplanes" he has ever seen. In addition to its fleet of 12 Beavers, Taquan has added a Cessna Caravan in March of 2014 and 3 De Havilland Otters in 2016. These additions give Taquan the ability to carry higher passenger volumes and move larger freight loads more efficiently when needed. 2.4. Personnel and Training Taquan Air takes pride in having one of the most experienced flight crews in Alaska, averaging 15,000 logged flight hours each. Taquan also prides itself on being one of the most safety conscious air carriers in the State of Alaska. One of the ways this is accomplished is by hiring only the most qualified pilots. All pilot candidates go through an application process that includes an interview, thorough review of flight qualifications, a background check, an evaluation flight. and drug and alcohol screening. Upon completion, the management team will review the applicants to determine which applicant will best fit the company's safety policies and culture. Taquan Air's flight line employs several year round pilots, as well as seasonal pilots with high levels of experience and qualifications. These pilots are all required to exceed the minimum qualifications set forth by the FAA. 2.4.1. Pilot Training and Flight Operations The foundation of Taquan's approach to flight operations and risk management is to hire and train the most qualified flight crews and require them to concur with all flight followers before every flight. All new pilots go through an extensive initial training, regardless of their experience, before they are allowed to fly any route. First flight crews receive Taquan's FAA approved Pilot Training Program and Operations Manual, more than 80 hours of classroom training, simulator training, and aircraft instruction. Upon the completion of this training, each pilot must pass written, oral, and flight tests. All pilots are then scheduled for recurrent training and testing in the classroom, simulator, and aircraft annually in order to maintain the highest level of proficiency. One component to this is Controlled Flight into Terrain (CFIT) avoidance training which has been a valuable addition to our program. Through our CFIT avoidance training, company instructors have the ability to manipulate weather conditions along simulated routes of operation. This gives the applicant cue-based indications and aids in the decision to continue an actual flight or execute a 180 degree turn back toward favorable weather conditions. Furthermore, the company uses a risk assessment system to assess the risk of each flight prior to departure. This is a calculated based on every factor involved in a particular flight and provides continuous communication between pilots, dispatchers, and flight operations management. Once the risk is calculated, the flight will be approved or denied based on all of the information available. 2016 KPU Proposal Page 8 Submission Due Date 04-14-16 2.4.2 . Insurance Limits Taquan has some of the highest insurance limits in the Alaskan Aviation Industry. We currently have $10,000,000 Combined Single Limit Bodily Injury (including Passengers) and Property Damage Each Occurrence. No passenger liability sublimit applies. This is much greater than any carrier currently operating in Ketchikan. 2016 KPU Proposal Page 9 Submission Due Date 04-14-16 Taquan - Medallion Shield Carrier ik VFR Pilot- PCATD!Silnulator Training Progra111 -Awarded May 2004: Tllis star includes a classroom/raining pmgram as well as !mining on a PC hasl!d colltfWIL'r simulator or cquiwtlcnt dl!l'ice. / im cfl11111al check-rides arc a n:'tftlirclltc/1/ to maintain this Sf(//: rtr Operational Risk Manaxen1ent- Awarded Nove1nber 2004 7/u' ORA1.S)·stcm is c~\'Jilllllic and pm1·idcs mw~vtical tools as 11'1!1/ as t1 S\'S/em o{check.s and halanccs to proacti\'<'~l' idcntiji·/w:::ards and 11/clltagc risks. 7tr Maintenance and Ground Service Operations- Awarded April 2005 Thcsl! operations mus/ include specific training and /JUIIIIting requirements as recjllirccl i11 uccordwJcc to I It is stm: --ft St~f'ety Progrtllll- Awarded April 2006 For !h is stm: each operator IIIIlS/ estah/ish a saf'c~v pmgram. A /i£ ~1' wpecl of'thc sc{/i•ll• program is the commitment qf'top-lcl'el /JICIIWgcmenllo rite .m/'cO' program. : I I a minimt/111, 1/ie Sc{/C,~l' fJ/'Ogram includes .m/'cl,l' meetings and audits. the use of'rool cause una~vsis, lw:::anl identification, inciclcnl im·estigations and a \'iahle C/1/CI;t~cnc:1 · response pmgram 1tr Internal Audit Pro{?rliJII- Awarded May 2008 Tlte incorporation r~(a proacth·e infernal audit ·':\'S/('/11 tltat/rJcllsl'S on 1/te use u/sl·stem.\· so/(·~~· principles as lt·e/I as regu Ia 101:1' compliance. ALASKA journal - of - Commerce //"'.. /\LASK/\ · Chuck West Award for innovation ••·wwwwww:•·•••••i•• he orfd . 1 of top 10 operators in the World 1- . ' j,-. " • ; • KPU G.:ncral Manager , - ~ _. 331 Front Street Ketchikan, AK 9990 I Phone (907) 228-5603 Fax (907) 225-5075 Your CmmiiNIIi~)\ Your Utility TRANSMITTAL MEMORANDUM TO: The Honorable Mayor and City Council FROM: Karl R. Amylon, General Manager DATE: April21 , 2016 RE: Bids for Contract No. 16-21 - Swan Lake Fixed Wing Aircraft Service, Pacific Airways, Inc. As indicated in the attached memorandum from Electric Division Operations Manager Mark Adams, KPU has advertised for and received sealed bids for Contract No. 16-21 , Swan Lake Fixed Wing Aircraft Service. Three (3) bids were received and publicly opened on Thursday, April 14, 2016 at 2:00 p.m. in the City Clerk's Office. The Operations Manager's report contains a summary of the bids received. The basis of award is the per flight cost between Ketchikan and Swan Lake. Pacific Airways, Inc. submitted the apparent low bid in the amount of $420/flight. The existing contract with Taquan Air provides for a per flight rate of $467.45. A Notice of Intent to Award was issued on April 20, 2016. As of the date of this report, no appeals have been received. Mr. Adams will be attending the City Council meeting of May 5, 2016, in order to address any questions and/or concerns that Councilmembers may have. A motion has been prepared for City Council consideration. RECOMMENDATION It is recommended that the City Council adopt the motion accepting the bid of Pacific Airways, Inc. in the amount of $420 per flight for Contract No. 16-21 , Swan Lake Fixed Wing Aircraft Service; authorizing funding from the 2016 Electric Division's Swan Lake Travel-Business account (Account No.600-01 ); and directing the General Manager to execute the contract documents on behalf of the City Council. Recommended Motion: I move that the City Council accept the bid of Pacific Airways, Inc. in the amount of $420 per flight for Contract No. 16-21 , Swan Lake Fixed Wing Aircraft Service; authorize funding from the 2016 Electric Division 's Swan Lake Travel Business account (Account No.600-01 ); and direct the General Manager to execute the contract documents on behalf of the City Council. AGENDA- 05/05/16- KPUCA1 Electric Division I 065 Fair Street Ketchikan.AK 99901 Phone: (907)225-5505 Fax: (907) 24 7-0755 TRANSMITTAL MEMORANDUM TO: Karl Amylon, KPU General Manager FROM: Mark Adams, Electric Operations Manager DATE: April20, 2016 SUBJECT: Request Authorization to Award Contract No. 16-21, Swan Lake Fixed Wing Aircraft Service to Pacific Airways, Inc. On March 15th KPU issued a request for sealed bids to provide aircraft transportation and freight service between Ketchikan and the Swan Lake hydroelectric facility. This contract, valid July 1, 2016 through June 30, 2019, is funded entirely by SEAPA through KPU' s Swan Lake O&M budget. SEAPA was consulted for comments prior to the contract going out to bid. The request for bids was advertised in the Daily News and on the City of Ketchikan website. Bids were publicly opened at City Hall on April 14th, and were as follows: • Pacific Airways- $420.00/flight; $12.00 airport fee; $325.00/hr standby • Taquan Air- $439.00/flight; $25.00 airp011 fee; $360.00/hr standby • Misty Fjords Air & Outfitting- $467.40/flight; $25.00 airport fee; $360.00/hr standby Basis of award was the per flight cost between Ketchikan and Swan Lake. The airp011 fee and the standby time were established for the rare occasion where they may be applicable. A Notice of Intent to Award was mailed to the respective companies on April 20th. The existing flight contract, with Taquan at a rate of $467.45 per flight, is set to expire on June 30th of this year. Recommendation: It is recommended that the City Council award Contract No. 16-21 Swan Lake Fixed Wing Aircraft Service to Pacific Airways, Inc. Attachement: Bid Summary KET C HIKAN PUBLI C U T ILITI E S BIDDER'S LIST / Contract No: 16-21 Bid Open Date: 04/14/2016 Bid Name: Swan Lake Fixed Wing Aircraft Service Bid Open Time: 2:00 pm J..oco.( Local Non- Bid Ack. &\!t.t CO:MP ANY NAME Bidder Collusion Bond Addend Other BID AMOUNT (USD) '&:h.ver - :. '-l3Cf ~ 1 v ~~-~3~c7o la_a ua_V\ Ai' v- v k~Yf -Ce - tz.s Gea.ver - ~ Lift~-,. 1.#-0 2 ~~ - ~3/«J mi~~ t j o~s Air a Ouf-tiJ!ina AtY-oor-t ~- ~ ~5 &o.ve...-- $L\U> ~raoy ~ "' 3:z. s 3 . ., A - Rl.ci~t·c. )~:) ~ v A\yDJY4. s;:ee. - ~I~ \..J 4 5 6 7 8 9 10 Prepared by:__ ---'Ka~tyL..!:S=w~·te ,._r ___ Opened in:_ _ _ C=l=er...,_k'.=:...s =O:ffi==ce::___ winwortl\fonnslbidlist.docx