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City Council Meeting: July 26, 2011
Agenda Item: ~_
To: Mayor and City Council
From: Stephanie Negriff, Director of Transit Services
Subject: Provide O.E.M. Detroit Diesel Engine & Allison Transmission Parts
Recommended Action
Staff recommends that City Council authorize the City Manager to amend Purchase
Order No 19279 to Valley Power Systems Inc., aCalifornia-based company, for the
purchase and delivery of Detroit Diesel engine & Allison transmission parts for an
additional $70,000 in FY 2010-11, $100,000 for FY 2011-12, and $100,000 for FY 2012-
13 option year. This will result in a total purchase order amount with Valley Power
Systems, Inc. of $ $1,050,000 if the FY 2012-13 option is exercised.
Executive Summary
The replacement of engine and transmission parts is necessary to keep transit buses
operating. to Original Equipment Manufacturer (O:E.M.) recommendation and to stay
compliant with emission standards and regulations. fn FY 2010-11, 12 engines required
replacement of major components such as turbo chargers and engine oil balance shafts
as part of the engine overhaul process. For this reason, the Big Blue Bus exceeded
Council authority to purchase Detroit Diesel engine parts with Valley Power Systems,
Inc. by $70,000. It is anticipated that additional major engine component parts will be
needed in FY 2011-12 and FY 2012-13 option years and with cost escalation, staff is
requesting additional budget authority of $100,000 in FY 2011-12 and $100,000 in
FY2012-13.
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Background
In FY 2010-11, staff recommended that Detroit natural gas engines would be
overhauled instead of a complete re-power. A re-power would have required a complete
engine and component change at an estimated cost of $100,000 per bus. Staff
estimated a per bus savings of $80,000 by doing the overhauls.
On September 14, 2010, City Council awarded Bid No. 3000 to Valley Power Systems
Inc. an annual estimated amount of $260,000 to provide Detroit Diesel engine & Allison
transmission parts with two additional option years. BBB has recently exercised its
option for FY 2011-12. The total estimated expenditure for the original three-year term
was $780,000.
Parts and supplies were purchased from the current Purchase Order No 19279 with
Valley Power System to complete the overhauls. As a result, budget authority for FY
2010-11 was exceeded by $70,000.
Discussion
The estimated expenditure was based on past expenditures and practices. Since then,
because of the age of the fleet, engine failures have increased causing a spike in
engine work needed and major engine component failure.
Big Blue Bus transit coaches, powered by Detroit Diesel engines include: 83 transit
coaches that have exceeded their useful life cycle of twelve years and have over
500,000 miles, and 37 transit coaches that are nine years old and have over 350,000
miles. Because of their age and miles, major components such as turbo chargers and
oil balance shafts require replacement. While these buses are on a replacement
program, it is important that their components. be maintained to O.E.M.
recommendations so they don't wear out and emit harmful particulate matter and other
pollutants. To avoid this, it is necessary to maintain and repair engines before they wear
out and pollute the environment. In FY 2010-11 the Big Blue Bus exceeded Council
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authority with Valley Power Systems, Inc. by $70,000, and it is anticipated that an
additional $100,000 beyond Council authority is needed for FY 2011-12 and for the
subsequent option year. This will result in a total purchase order amount of $1,050,000
if the FY 2012-13 option is exercised.
Financial Impacts & Budget Actions
The expenditure for this amendment will be an additional $270,000 broken down as
follows: $70,000 for FY 2010-11, $100,000 for FY 2011-12 and $100,000 for FY 2012-
13 option years. Funds in the amount of $270,000 are available in account
0410106:589000. All funds used for this purchase come from funding sources
specifically dedicated for transit uses.
Prepared by: Ralph Merced, Transit Maintenance Manager
Approved: Forwarded to Council:
St han~e Negriff Rod Gould
D' ctor of Transit Services City Manager
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