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Contract Bus Service, Including Compressed Lor Angdes County One Gateway Plaza Mctropoliin TknsmonAuthority Los Angeles, CA 90012-2952 'Metra - OPERATIONS COMMllTEE JUNE 17,2010 SUWECT: OP35902470, SOUTH REGION CONTRACT BUS SERVICES MV TRANSPORTATION, INC. ACTION: AWARD CONTRACT FOR CONTRACT BUS SERVICES RECOMMENDATION Authorize the Chief Executive mcerto: A. Award a five-year firm fixed price contract, Contract No. OP35902470, to MV Transportation for Contract Bus Service, including compressed natural gas (CNG) fuel, in an amount not to exceed $74,637,395 and provide for reimbursement of fuel costs for the five-year period in an amount not-to-exceed $12,138,430 for a total contract amount not-to-exceed $86,775,825 effective October 31,201 0; and B. Execute future contract modifications to Contract No. OP35902470 in an amount up to $1,000,000 per contract modification. RATIONALE We operate 22 bus lines that are contracted to private transportation companies. The South Region contractor currently operates ten of these lines: 125, 128, 130, 205,214,232,607,608,625 and 626. The contract with the current South Region contractor, First Transit, Inc., expires October 30,2010. Line Description Annual Annual RSH Passengers 125 El Segundo - Downey via Rosecrans Ave. 42,226 2,134,567 128 Compton - La Mirada via Alondra Blvd. 10,685 459,510 130 Redondo Beach - Cerritos via Artesia BI. 31,732 1,194,178 205 1mperialMlilmington Sta. - San Pedro via Wilmington Ave., Vermont Ave. & Western Ave. 42,928 1,489,861 214 Artesia Transit Center - BroadwayMain St. 7,013 132,600 Loop - Harbor Freeway Station 232 Long Beach - LAX via Sepulveda Blvd. 56,901 2,362,604 607 lnglewood - Windsor Hills - lnglewood 5,126 38,505 608 Crenshaw Connection 3,035 21,420 625 Green Line Shuttle World Way West via Imperial Hwy. 4,692 49,860 626 LAX - Greenline Shuttle 5,712 37,554 Total 210,047 7,920,659 We began contracting a portion of our bus service in IQQ6. The first 13 contracted lines were existing services which we operated directly in-house. These lines were transferred because of their high subsidy per passenger. The remaining contract lines include some of the new local shuttle and Consent Decree services that have been added since 19Q6. Contracting a portion of the bus service has had both cost and operational benefits: Annual savings are realized through the lower operating wsts of the contractors. Modifications or expansion to existing bus divisions are not necessary when new services are added. Contracts allow greater flexibility in operation. Lines can be quickly added, cancelled, or modified. The current contract was a five-year contract that was awarded to First Transit in 2005. The new contract requires the contractor to pay for CNG fuel costs for CNG buses, but will continue to provide for reimbursement of actual fuel costs for diesel buses. The maximum cost that we will pay for diesel fuel is based on an index price published by the Oil Price Information Service. Reimbursement of diesel fuel used in revenue vehicles is a practice that we have used to remove the risk of volatile diesel fuel prices affecting prices over the five-year contract period and the potential need for price adjustments based on changes in fuel prices. We are requiring contractors to pay for CNG fuel for buses and determine whether to fuel buses on- site or at an off-site CNG station based on which strategy is most cost effective for their proposed facility. The new contract contains additional provisions related to vehicle maintenance, including mechanic stafFing requirements, upgrading of ATMS equipment and additional performance standards and liquidated damages related to service delivery and vehicle maintenance. OP35902470, SWTH REGION CONTRACT BUS SERVICES - MV TRANSPORTATION, INC. The new contract term will begin October 31,2010 and end October 31,2015. The contract contains provisions that allow for service levels to be increased or decreased over the term of the contract based on our operating needs. MV Transportation is being recommended to operate this service for the new contract period. The firm has proposed to operate the service from a facility located at 21222 S. Wilmington Avenue in Carson, CA 90801. In March 2009, the Board approved additional funding for fuel, operations and maintenance of the existing bus fleet for Contracted Bus Services - East Region in the amount of $4,969,260. Since the majority of the buses in the South Region are beyond their useful life, the potential for increased maintenance costs exists. There may also be additional operational and fuel cost increases that would require contract modification. Therefore, it is requested that contract modification authority for $1,000,000 per contract modification be authorized rather than $500,000 per contract modification, in addition to the 10% contract modification authority of initial award value which is provided with all new contract awards. FINANCIAL IMPACT The funding of $1 I,I 53,224 for the first eight months of this five-year contract is included in the FYI 1 budget in cost center 3592, Contract Services South Region under project 306001 - Bus Operations. In FYO9, $15,711,390 was expended on contracted fixed route transportation services in the South Region. Since this is a multi-year contract, the cost center manager and Executive ORicer will be accountable for budgeting the cost in future years. Impact to Bus and Rail O~eratinaand Capital Budaet The FYI 1 funding for this service will come from the Enterprise Fund project 306001, Bus Operations Transportation. No other sources of funds were considered for this activity because all of these services are funded through, and budgeted in, the Enterprise Fund. This acthrrty will not impact ongoing operating costs as the department has already budgeted for the services that must be provided to the region irrespective of which contractor is operating the service. ALTERNATIVES CONSIDERED Staff considered bringing the services in-house to be operated at a MTA bus division. Based on our proposed FYI 1 marginal bus operating cost of $89.80 per Revenue Service Hour, it would cost more to operate these services in-house and would require physical modifications to our facilities to operate and maintain the vehicles used for this service. The new cost for services including estimated fuel expenses, as shown in Attachment B, is $79.65. The current contract rate, including actual fuel expenses incurred year-todate for FYI0, is $78.59. A. Procurement Summary A-I . Procurement History A-2. List of Subcontractors 8. South Region Pricing Prepared by: Shannon Anderson, Project Manager Susan Dove, Contract Administrator OP35902470, SOUTH REGION CONTRACT BUS SERVICES - MV TRANSPORTATION, INC. Ilot(kie Mitchell Chief Operations Mficer rn Arthur T. Leahy U Chief Executive Officer OP359M470, SOUTH REGION CONTRACT BUS SERVICES - MV TRANSPORTATION, INC. BOARD REPORT ATTACHMENT A PROCUREMENT SUMMARY OP35902470, SOUTH REGION CONTRACT BUS SERVICES MV TRANSPORTATION, INC. 1. Contract Number:OP35902470 2. Recommended Vendor: MV Transportation, Inc. 3. CostlPrice Analysis Inforrnation: A. BidIProposed Price: Recommended Price: $86,775,825 including estimated $86,775,825 including estimated diesel fuel reimbursement diesel fuel reimbursement B. Details of Significant Variances are in Attachment A-I .D 4. Contract Type: Firm Fixed Price Services - Cost Reimbursement - Diesel Fuel 5. Procurement Dates: A. Issued: November 9,2009 B. Advertised: November 9,2009 C. Pre-proposal Conference: November 20,2009 D. Proposals Due: March II, 201 0 E. Pre-Qualification Completed: February 2010 F. Conflict of Interest Form Submitted to Ethics: May 17,2010 6. Small Business Participation: A. BidlProposal Goal: Date Small Business Evaluation DALP: 10% Completed: May 14,2010 B. Small Business Commitment: 0.57% DALP. Details are in Attachment A-2 7. Invitation for BidlRequest for Proposal Data: Notifications Sent: BidslProposals BidslProposals 6 Picked up: 36 Received: 2 8. Evaluation Information: A. BiddersIPro~osersNames: BidIPro~osal Best and Final Amount: Amount MV Transportation $74,637,395 exc. NIA diesel fuel First Transit $80,664,799 exc. diesel fuel NIA B. Evaluation Methodology: Details are in Attachment A-1 .C 9. Protest Information: A. Protest Period End Date: June 23,201 0 B. Protest Receipt Date: C. Disposition of Protest Date: 10. Contract Administrator: Telephone Number: Susan M. Dove 922-745 1 I7. Project Manager: Telephone Number: Shannon Anderson 922-2802 OP35W2470, SOUM REGION CONTRACT BUS SERVlCES - MVTRANSPORTATION,INC. 6 BOARD REPORT ATTACHMENT A-I PROCUREMENT HISTORY CONTRACT NO. OP35902470 - SOUTH REGION CONTRACTED BUS SERVICES A. Backaround on Contractor MV Transportation was founded in 1975 as a small family owned local transit company operating five locations. During the 1990s, as a result of mergers, and consolidations within the transportation industry, MV Transportation's span of operation increased. Currently, MV Transportation is the largest private provider of paratransit services and the largest privately-owned transportation contracting firm in the United States. MV Transportation employs more than 12,000 employees at more than 100 locations, and operates more than 190 paratransit, fixed-route, shuttle and Medicaid contracts in 24 states, the District of Columbia, and British Columbia. .MV Transportation's clients include Washington Metropolitan Area Transportation Authority (WMATA), City of Los Angeles' DASH and Commuter Express, San Mateo County Transit District (SAMTRANS), City of Glendale and Foothill Transit. MV Transportation has also satisfactorily operated Los Angeles Metropolitan Transportation Authority (MTA) Line 58 from 2000 to 2005. B. Procurement Backaround The Request for Proposal (RFP) required vendors to propose a fixed rate for each revenue service hour (RSH rate) that would be needed to provide the proposed bus service. The revenue service hour costs include all operation and maintenance costs with the exception of diesel fuel for revenue vehicles. Because of rising fuel costs, and recommendation from Management Audit Services Department, the fuel costs will be directly reimbursed to the contractor based on the Oil Price Information Services (OPIS) index.
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