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Council Meeting January 27, 1998 Santa MOnica, California
TO Mayor and City Council
FROM CIty Staff
SUBJECT Recommendation to Award Bid to Furnish and Deliver Pneumatic Tubeless
TIres and Replacement Wheels to be Leased for Use on Buses of the Santa
MOnica Municipal Bus Lines, Bid #2668
I ntrod uctlon
This report recommends award of bid to furnish and deliver pneumatic tubeless tires and
replacement wheels to be leased for use on buses of the Santa Monica Municipal Bus
Lines for the Transportation Department at specIfied umt prices for a three-year penod,
plus two one-year renewal options The total lease amount for the five-year penod IS
$892,717
Background
The bid specifications requested bids for the lease of new and existing tires and the
replacement of wheels on Its older fleet of buses, as the eXisting tires wear out, over a
three-year penod with two one-year renewal options
The City IS currently leaSing tires from Goodyear Tire & Rubber Company which expires
January 31, 1998 Under the existing contract, the City must pay Goodyear Tire & Rubber
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Company for all remalnmg tread on tires that are In servIce If Goodyear IS not the
successful awardee on the current bid The cost of remalnmg mileage IS prorated
accordmg to a formula specified m the eXlstmg contract (called a runout rate) The
estimated lump sum cost would be $358,533 Federal law states that the eXIsting provIder
(lessor) must allow lessee the option to run the tires out over a three-year penod to avoid
a huge lump sum total for purchase of all remaining tread on tires that are In service
If Goodyear Tire & Rubber Company IS the successful bIdder on the current bid, the
runout rate wIll equal $276,658, because a new rate would apply to both new and eXlstmg
tIres However, If they are unsuccessful, then the City Incurs the runout cost and pays the
new provIder only for the tIres they provide under the new contract terms
I n response to published Notices I nVltmg Bids (published November 11 and 12, 1997) to
furnish and deliver pneumatic tubeless tires to be leased for use on buses of the Santa
MOnica MUniCipal Bus Lmes, In accordance With City specifications, bIds were received
and publicly opened and read on December 8, 1997 Proposal forms were mailed to four
vendors and notices were advertised In accordance With City Charter and MUniCipal Code
proVIsions Two proposals were received as follows
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A
Goodyear Tire & 1st 2nd 3rd 4th 5th
Rubber Company Year Year Year Year Year
Lease tire rates
(rate/bus mile)
B275/70R22 5 $0 025800 $0 027300 $0 028800 $0 029700 $0 030600
B305175R24 5 $0 025800 $0 027300 $0028800 $0 029700 $0 030600
12 5x22 5H $0 060900 $0 060900 $0060900 $0 060900 $0 060900
315/80R22 5 $0 034400 $0 036400 $0 038400 $0 039600 $0 040800
Monthly Tire Service
Cost $3,250 00* $3,325 00* $3,400 00* $3,45000* $3,500 00
Wheels set of SIX -
Cost/Set $1,71000* $1,71000* $1,71000* $1,71000* $1,710 00*
* low bid
B
Bndgestone/Flrestone 1st 2nd 3rd 4th 5th
Inc Year Year Year Year Year
Lease tire rates
(rate/bus mile)
B275/70R225 $0 022500 $0 023828 $00205017 $0 027710 $0026543
B305/75R24 5 $0 027000 $0 027810 $0028410 $0 028800 $0 028800
12 5x22 5H $0 051000 $0 051000 $0051000 $0051000 $0051000
315/80R225 $0031200 $0031200 $0031200 $0031200 $0031200
Monthly Tire Service
Cost $3,700 00 $3,600 00 $3,500 00 $3,500 00 $3,500 00
Wheels set of SIX -
Cost/Set $1,99200 $2,091 60 $2,1 96 18 $2,30599 $2,421 29
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Cost of leaslna all bus tires over next Three Years FIve Years
If contract IS awarded to Goodyear $566,057 $892,717
If contract IS awarded to Firestone $637,357 $950,623
Cost of convertlna older fleet of 67 to 91 buses to aluminum wheels Goodyear's bid was
$1,710 per bus set, Bndgestone/Flrestone's bid ranged from $1,992 to $2,421 over the
five years
Staff has evaluated both bids, consldenng all tire and wheel costs for the bus fleet over
the next fIve years, and finds that Goodyear Tire & Rubber Company's bid provides the
lowest tire and wheel cost to the City
BudaetlFlnanclallmoact
Fiscal Year 1997 -98 appropnatlon authority for this purchase IS In the Capital
...
Improvement Budget, account number 41-750-657-20098-8900-99371, "Bus Tire Lease 11
RecommendatIon
It IS recommended that the award of Bid #2668 be made to the Goodyear Tire & Rubber
Company at speCified umt pnces under a three-year contract (fixed rate), with two
one-year renewal optIons, as the lowest responsible bidder
Prepared By Pam Wortham, Purchasing Agent
Marganta Lee, Buyer
Roy Neva, Transportation FacIlities MamtenanceNehlcle Eng Mgr
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