DATE AGENDA ITEM 4 January 25, 2017 SUBJECT East Valley, Northwest Valley and Regional Paratransit Service Contract Award PURPOSE To request authorization for the Chief Executive Officer (CEO) to execute a contract with Transdev for the operation of East Valley, Northwest Valley and Regional Paratransit Services for a total of five years for an amount not to exceed $124.47 million, which includes a base contract cost of $108.34 million, a contract contingency of $10.83 million (10% of the five-year contract value) and a projected pass through reimbursement cost for fuel of $5.30 million. BACKGROUND/DISCUSSION/CONSIDERATION Valley Metro paratransit operations are currently performed under two contracts (Contract 1040014-S and Contract 1240003-S). Valley Metro is consolidating all services into one new turnkey paratransit operations contract resulting in one contractor who will accept customer calls, verify customer eligibility, schedule requested trips, operate the service, maintain the vehicles and provide all associated administrative support and reporting functions, including customer service. The new paratransit service contract is designed to improve our focus on service, safety, quality and productivity. It is designed to build on the utilization of dedicated vehicles and drivers for trips which can be grouped effectively, while still using flexible, non-dedicated vehicles (such as taxicabs) for trips which cannot be shared in a cost- effective manner. The new contract will also allow for the implementation of technology which will enable customers to use mobile phones and other electronic devices to interact with the paratransit service, thereby increasing service quality and responsiveness for customers while helping Valley Metro and its contractor to run the most efficient operation possible. Finally, the contract includes operational requirements, technologies and tools to help integrate paratransit more into Valley Metro’s other service delivery modes. A federally compliant RFP with a base term of five years with one three-year and one two-year option, subject to future Valley Metro Board approval, was issued on July 7, 2016. The Selection Committee, which consisted of four member cities (Chandler, Gilbert, Mesa and Scottsdale), Valley Metro, and additional non-voting technical advisors, reviewed, scored, ranked and conducted a best value analysis resulting in the Selection VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 602-262-7433 Committee reaching consensus on Transdev as the firm offering the best value for operation of Valley Metro’s East Valley, Northwest Valley and Regional Paratransit services. Of the five proposals, the Selection Committee determined four were technically acceptable and the proposers were invited to submit a Best and Final Offer (BAFO). The Selection Committee conducted a technical review of the four BAFOs and also performed a best value analysis. After deliberation, the Selection Committee reached consensus on a final recommendation. The Selection Committee awarded Transdev the highest technical score of all five proposals. While Transdev did not offer the lowest gross price proposal, the Selection Committee determined Transdev’s proposal provided the overall Best Value for Valley Metro. The Selection Committee’s decision was based in large part on the following factors: Transdev has deep corporate-level experience with projects of the size, scope and complexity of Valley Metro’s Dial-a-Ride program. The Selection Committee determined Transdev’s superior level of experience will help to ensure safe and high-quality service for customers. The Selection Committee determined the close proximity and availability of Transdev’s corporate and regional support personnel will help to ensure the local management team receives timely support it needs to be successful. This will be especially useful during service transition. Transdev’s management team has broad-based experience, including substantial service at SunTran in Tucson, AZ. The Selection Committee found the management team’s broad experience will enable the team to properly manage the complexity associated with transitioning from an on-demand taxi-based model to a service model. This model will utilize both dedicated vehicles and taxicabs to deliver service that emphasizes shared rides and a focus on integrating paratransit with other Valley Metro bus and light rail services. Transdev’s price proposal of $108.34 million for the base five years, $82.76 million for the three-year option and $63.88 million for the two-year option for a grand total of $255 million was deemed reasonable and justified for the service requirements in the contract. COST AND BUDGET Paratransit services operated by Valley Metro are funded by a combination of Regional Public Transportation Funds (Proposition 400), Arizona Lottery Funds, member agency contributions, federal funds and passenger fares. The five-year cost for the base contract with Transdev is $119.17 million ($108.34 million plus a $10.83 million 10% contract contingency). Valley Metro will also reimburse Transdev for the actual cost of 2 fuel used by dedicated vehicles operating in revenue service on a pass-through basis with no mark-up. The five-year estimated cost of fuel is $5.30 million, making the total cost $124.47 million. All costs for FY18 (including contract expenses and fuel consumed by dedicated vehicles) will be included in the Valley Metro FY18 Operating and Capital Budget. Contract and dedicated fuel expenses beyond FY18 will be incorporated into the Five- Year Operating Forecast and Capital Program (FY18 thru FY22) and into future agency budgets. STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan FY 2016 – 2020: Goal 1: Increase customer focus o Tactic E: Enhance services and facilities for seniors and people with disabilities Goal 2: Advance performance-based operations o Tactic A: Operate an effective, reliable, high-performing transit system COMMITTEE PROCESS TMC: February 1, 2017 for action Board of Directors: February 16, 2017 for action RECOMMENDATION Staff recommends that the TMC forward to the Board of Directors authorization for the CEO to execute a contract with Transdev for the operation of East Valley, Northwest Valley and Regional Paratransit Services for a total of five years for an amount not to exceed $124.47 million, which includes a base contract cost of $108.34 million, a contract contingency of $10.83 million (10% of the five-year contract value) and a projected pass through reimbursement cost for fuel of $5.30 million. CONTACT Wulf Grote, PE Director, Capital and Service Development 602-322-4420 [email protected] ATTACHMENT None 3 .