SR-102307-1C~~
c;tyor City Council Report
Santa Monica
City Council Meeting: October 23, 2007
Agenda Item: 1 °'G
To: Mayor and City Council
From: Stephanie Negriff, Director of Transit Services
Subject: Award Contract to Goodyear Tire & Rubber Company for the Lease of
Tires and Related On-Site Tire Services
Recommended Action
Staff recommends that the City Council award Bid No. 2932 and execute a contract with
Goodyear Tire & Rubber Company in the amount of $2,650,000 for the lease of tires
and related on-site tire services as required by the Big Blue Bus.
Executive Summary
Tire leasing has been a standard practice in the transit industry since the 1940's and a
common practice at the BBB for at least 40 years. Leasing is more economical than
purchasing tires since tire cost is based on a flat rate per mile driven and the costs of
inspection, repair, replacement, and inventory control. A cost analysis has been
completed to compare the benefits of moving this service in-house per Attachment B.
The analysis demonstrated that continuing to outsource this service is the most cost
effective measure. The estimated expenditure for the balance of this fiscal year is
$250,000. The total estimated expenditure for the five-year term is $2,650,000. Budget
authority for the subsequent years will be included in each annual proposed City
budget.
1
Discussion
Background
The BBB currently leases bus tires from Goodyear Tire & Rubber Company. The lease
provides tire inventory, including spare stock on a replacement basis, and two full time
on-site service attendants who perform inspections, tire repair and replacement. Tires
are individually branded prior to delivery for inventory control purposes. Tire rates are
fixed and the BBB only pays for the miles the tire actually runs.
The BBB has a high volume of tire removal, repair, and replacement on a daily basis.
Staff found that contracting for the service component plus leasing tires, as opposed to
owning tires is the most economical option for the City. Staff developed a cost estimate
for performing these same services using in-house personnel and equipment and
determined that the bid pricing offered by the vendor was more cost advantageous.
Vendor Selection
In May 2007, the City published Notices Inviting Bids for the lease of tires and related
tire services as required by the BBB' in accordance with City specifications. Bid forms
were mailed to four vendors and notices were advertised in accordance with City
Charter and Municipal Code provisions. One bid was received and publicly opened on
July 10; 2007 per Attachment A.
The tires required for the fleet buses are only supplied by a small number of vendors.
Staff sent bid documents to Bandag, Michelin, Bridgestone Firestone, and Goodyear
2
Tire & Rubber Company. Only Goodyear Tire & Rubber Company chose to submit a
bid. Their past performance has been found to be satisfactory and they are able to
supply all tire sizes required by the City at reasonable prices. Therefore, it is
recommended that the bid award be made to Goodyear Tire & Rubber Company.
Budget/Financial Impact
Funds for the tire lease and related on-site services are available in the Bus Component
Account 0410106.589000. Since Fiscal Year 2007/2008 has begun, the estimated
expenditure for the remainder of the fiscal year will be $250,000. Budget authority for
the subsequent years will be included in each annual proposed City budget.
Prepared by:
Ralph Merced, Transit Maintenance Manager
Approved:
of Transit Services
Forwarded to Council:
P. on ell '
City Ma er
Attachments:
Attachment A -Pricing
Attachment B -Cost Analysis
3
BID #2932 ATTACHM NT A
BID OPENING DATE; 07/10/07
TITLE: LEASE AND SERVICE NEW AND RECAPPED BUS TIRES AS REQUIRED BY THE BIG BLUE BUS. ~
VENDOR/BID ITEM The Goodyear Tire & Rubber Company--Tire Rate Per Mile
Year 1 Year 2 Year 3 Year 4 Year 5
s ima e
Average Annual
Tire Type/Bus
Type Miles & # of Tires
per Bus Tire Rate
Per Mile
Annual Cost Tire Rate
Per Mile ~I
Annual Cost Tire Rate
Per Mile
Annual Cost Tire Rate
Per Mile
,Annual Cost Tire Rate
Per Mile
Annual Cost
6305/75822.5
NOVA 400,000
LOAD RNG: H 6 Tires/Bus $0.006593 $15,823.20 $0.006593 $15,823.20 $0.007091 $17,018.40 $0.007626 $18,302.40 $0.008202 $19,684.80
6275/70822.5
NEW FLYER 1,915,000
LOAD RNG: H 6 Tires/Bus $0.009915 $113,923.35 $0.009915 $113,923.35 $0.010664 $122,529.36 $0.011469 $131,778.81 $0.012335 $141,729.15
6 245/7 0 81 9.5
THOMAS 100,000
LOAD RNG: H 6 Tires/Bus $0.006481 $3,888.60 $0.006481 $3,888.60 $0.006970 $4,182.00 $0.007497 $4,498.20 $0.008063 $4,837.80
315/80822.5 __ __ _ _ _-
MCI 35,000
LOAD RNG: J 8 Tires/Bus $0.008003 $2,240.84 $0.008003 $2,240.84 $0.008607 $2,409.96 $0.009257 $2,591.96 $0.009956 $2,787.68
6305/70822.5
NABI LOAD 1250000
RNG: H 6 Tires/Bus $0.009915 $74,362.50 $0.009915 $74,362.50 $0.010664 $79,980.00 $0.011469 $86,017.50 $0.012335 $92,512.50
6305/70822.5
NEW FLYER 2,000,000
LOAD RNG: H 6 Tires/Bus $0.009915 $118,980.00 $0.009915 $118,980.00 $0.010664 $127,968.00 $0.011469 $137,628.00 $0.012335 $148,020.00
ANNUAL TOTAL FOR ALL
BUS TYPES: $329,218.49 $329,218.49 $354,087.72 $380,816.87 $409,571.93
VENDOR/BID ITEM The Goodyear Tire & Rubber Company --On-Site Services
Year 1 Year 2 Year 3 Year 4 Year 5
1st Shift
On-Site Service Attendant
(5.30am-2:OOpm) _
2nd Shift $_ _.____68,700.00 _$ _ 71,448.00 $ _._ ..74,292.00 $ 77,268.00 $ 80,352.00
On-Site Service Attendant
(7:OOpm-3:30am) $ 79,044.00 $ 82,200.00 $ 85,488.00 $ 88,896.00 $ 92,460.00
Total Annual Rate for Both
On-Site Service Attendants $ 147,744.00 $ 153,648.00 $ 159,780.00 $ 168,164.00 $ 172,812.00
Goodyear Tire & Rubber
Attachment B
Contract vs. In-House Services Cost Comparison
(bid #2932)
In-House
2 Service Attendants 52 2 shifts; 40 hour, 5 day work week per shift
with CDl certifcations
I -Includes hiring, training, payroll, personnel administration, health benefits,
tools, safety equipment, and vacation/sick/holiday leaves.
Total $147,744.00
requires vendor to provide trained techicians
requires City to provide working facilities and storage space in either case
Bid requires Vendor to provide equipment
Good ear Tire&RUbber Yearl Price: $147,744.00
1 Service Attendant 40 52
1 Service Attendant 40 52
1 Service Attendant 20 52
Requires 2.5 FTE to provide same level of coverage
Rate` Value
$37.02 $77,009.00
$37.02 $77,009.00
$18.51 $38,505.00
Total: $192,523.00
f~it~R? ;: Is_' . !~;~~r we _ac16 i's^?~t~i" E6'' Gk~ 8 ..til~~._ ~u :.k . t .
training time and costs included in estimate of indirect labor hours.
Total: $oD[
Month Cost Value
facilities and storage space similar whether services provided by in-house
as or contractor
Total:
F{,~ur~rP,l~eN.RtMk'd~R. ~ 14 _ . RGt~ i:v~rs}'iu~t!~ ~~VUU t YLIa{,arL tvT ilil ~IM4i!{i~!'~V~~~Yi~~ it~l~rE3I9GiIA
~
6~~
Qty. Cost m
i
Value
Tire Balancing Machine 4 $20,000.00 $20,000.00
Tire Changer 1 $10,000.00 $10,000.00
Portable Compressor 2 $3,000.00 $10,000.00
Floor Jacks 2 $2,500.00 $5,000.00
One inch impact wrenches 3 $3,500.00 $10,500.00
Safety Cage 1 $2,500.00 $2,500.00
Misc. Hand Tools $5,000.00
Total : $63,000.00
In-House Cost Estimated for Year 1: $255,523.00
. . .:' Gpod ear; ' san-House" f. ~: piffefenee .. s ''; °( Rifference ~'.
Year1 .$147,744.00 $255,523:00 ($107,779.00) -73%
Year2 $153,648.00 $198,298.69 ($44,650.69) _ -29%
Year3 $159,780.00 $204,247.65 ($44,467.65) -28%
Year4 (opfionap $188,164.00 $210,375.08 ($44,211.08) -27%
Year 5 (optional) $172,812.00 $216,686.33 ($43,874.33) -25%
Total $800 148.00 $1 085,130.75 $284,982.75
* In-house cost for Years 24hrough 5 are based on estimated inflation facfors.
SRBD2932 -Attachment 6
Reference Contract
No. 8836 (CCS)