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SR-01-14-2014-3DCity Council Meeting: January 14, 2014 Agenda Item: 3D To: Mayor and City Council From: Edward F. King, Director of Transit Services Subject: Contract with Gillig LLC to Purchase 40 -foot Buses Recommended Action Staff recommends that the City Council authorize the City Manager to negotiate and execute a contract with Gillig LLC, a California -based company, established through a joint procurement consortium of 22 transit agencies led by Central Contra Costa Transit Authority ( CCCTA), in Concord, California. It would guarantee the pricing to furnish and deliver 40 -foot, low floor, Compressed Natural Gas (CNG) powered transit buses for the next five years. Executive Summary Santa Monica's Big Blue Bus (BBB), along with 21 other transit agencies, participated in a joint procurement to purchase buses. Central Contra Costa Transit Authority ( CCCTA), in Concord, California, the lead agency, issued a Request for Proposal (RFP) for the production and delivery of 30, 35, and 40 -foot heavy -duty low floor transit buses. CCCTA determined Gillig LLC was the best bidder. Staff recommends entering into a contract with Gillig LLC to guarantee the pricing as proposed, with the understanding that Council approval would be obtained separately through the term of the contract to authorize the purchase of buses in quantities and configurations to be specified, in conformance with the contract documents. A maximum of 99 buses would be purchased under this contract contingent on funding availability. Background BBB has a total of 189 buses as of the beginning of FY2013 -14, 99 of which are LNG buses purchased between 2002 and 2006 (37 NABI buses purchased in 2002, 52 New Flyer buses purchased in 2004, and 10 purchased in 2006). The FTA guidelines set the useful life of a transit vehicle at 12 years of age or 500,000 miles. BBB has a capital 1 improvement program to replace aging buses as they approach the end of their useful service. These 99 buses have been identified for replacement over the next five years. The contract with Gillig LLC for the purchase of up to 99 40 -foot CNG powered buses in the next five years would ensure that the vehicles would be replaced in a timely manner and would establish bus fuel type, fleet consistency and standardization. With the replacement of these vehicles, more than 95 percent of the Big Blue Bus fleet would be powered by CNG. In November and December 2011, staff evaluated four 40 -foot buses by different manufacturers. The evaluation allowed Motor Coach Operators to drive the buses. Maintenance technicians evaluated vehicle components. Motor Coach Cleaners inspected buses and put them through the service lane and fuel island. All employees who participated in this cross functional process provided feedback using a technical rating sheet to score their pros /cons of the vehicle. It was determined that the Gillig LLC bus best fit the needs of the BBB. On June 12, 2012, Council awarded a contract to Gillig LLC exercising options to procure up to 58 40 -foot CNG buses from the State of Minnesota contract. To date, BBB has received and placed into revenue service 45 of these buses. The Gillig buses with their distinct styling and color scheme are engineered and manufactured to be both aesthetically pleasing and exceptionally reliable, and BBB has received positive feedback from both employees and customers. In May 2013, the lead agency of the joint procurement, CCCTA, received two proposals. CCCTA determined that Gillig LLC was the most responsive bidder to the RFP requirements. The joint procurement enables the City to purchase buses for the next five years at predetermined base prices and an adjustment tied to the Producers Price Index. 2 Discussion In accordance with FTA requirements, CCCTA conducted a comprehensive price /cost analysis of Gillig LLC's proposal and determined that the proposed pricing was fair and reasonable over a five -year contract term. FTA has concurred that the pricing is fair and reasonable. The joint procurement consortium complies with Santa Monica Municipal Code 2.24.080 (Exceptions to Competitive Bidding) as competitive bid procedures have already been utilized by the lead agency, Central Contra Costa Transit Authority ( CCCTA) of the consortium. Federal purchasing regulations allow transit properties to procure vehicles and equipment by "piggybacking" on another agency's purchase. Piggybacking is the post - award use of a contractual process that allows an agency that was not involved in the original competitive procurement to purchase the same supplies /equipment through that original process. The remaining 13 buses from the previous piggybacking agreement have been ordered and are scheduled to be delivered February 2014. BBB plans to begin the replacement of the 99 LNG buses in FY2015 -16 contingent on availability of capital grant funding from Federal Transit Administration (FTA) Section 5307 Formula Funds. Staff requests authorization to enter into a contract with Gillig LLC to secure buses for future bus procurements with the associated cost pricing at the time the procurement is authorized by City Council. A maximum of 99 buses may be purchased over a five -year period with this agreement pending availability of funding. Financial Impacts & Budget Actions There is no immediate financial impact or budget action necessary as a result of the recommended action. Staff will return to Council if specific budget actions are required K in the future. BBB plans to begin the purchase of up to 99 CNG buses in FY 2015 -16; bus purchases will be contingent on the availability of federal and local funding. Prepared by: Enny Chung Graham, Senior Administrative Analyst Getty Modica, Transit Maintenance Officer Approved: Edward F. King Director of Transit C! Forwarded to Council: Rod Gould City Manager Reference: Contract No. 9855 (CCS)