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SR 07-27-2021 3B City Council Report City Council Meeting: July 27, 2021 Agenda Item: 3.B 1 of 4 To: Mayor and City Council From: Edward F King, Director, Department of Transportation, Transit Maintenance Subject: Award Bid and enter into Agreement with Cummins Inc. for Overhaul and Re- power of Cummins Engines Recommended Action Staff recommends that the City Council: 1. Award Bid #4406-A to Cummins Inc. for engine repairs, repower, and overhaul for transit buses for the Department of Transportation and Fire Department heavy- duty apparatus; and 2. Authorize the City Manager to negotiate and execute an agreement with Cummins Inc., in an amount not to exceed $6,639,464 which includes a $572,074 contingency over a five-year period, with future year funding contingent on Council budget approval. Summary The City of Santa Monica’s Department of Transportation (DoT) currently operates 176 transit buses fueled by renewable natural gas. The Federal Transit Administration sets the useful life of transit buses at 12 years or 500,000 miles and, based on these criteria, 65 of the City’s transit buses are approaching the midpoint of useful life. Over the useful life of a compressed natural gas transit bus, their engines experience normal wear and tear that may require engines to be rebuilt or replaced. Staff recommends awarding Bid #4406-A to Cummins, Inc. to allow DoT to repower transit buses in the event that severe damage occurs to an engine. The award to Cummins will also allow for engine overhauls and replacement of Fire Department Heavy-Duty apparatus to ensure that this critical life safety equipment is maintained in a state of good repair. The agreement for five years would be in an amount not to exceed $1,077,529 for the first year, with the total five-year contract amount not to exceed $6,639,464, which includes a 10% contingency and a 3% annual cost escalator. 3.B Packet Pg. 21 2 of 4 Discussion Normal wear occurs to engine components over the 12-year useful life of transit buses that may result in the need to replace or repair engine cylinder heads and other assorted engine parts. Engine in-chassis overhauls become necessary near the middle of a transit bus’s useful life around six years of age or 250,000 miles, to prevent buses from failing in route, which may result in costly repairs. In-chassis overhaul of engines involves rebuilding existing engines that are approaching the middle of their useful life, restoring the engine to a state similar to that of a new engine. By overhauling engines as they approach mid-life, DoT is better able to control its maintenance costs and reduce service interruptions. For comparison, the cost of a new natural gas transit bus is roughly $630,275. A scheduled engine overhaul allows for the work to be done in a timely manner on an as-needed basis throughout the year and reduces service interruptions from engine failures when in operation. The award of Bid #4406-A would also enable DoT to replace engines that cannot be overhauled and require replacement. These would be replaced with Near-Zero 0.02 NOx engines to further reduce emissions of harmful pollutants for the remainder of the bus’s service. DoT is committed to the City of Santa Monica’s sustainability goals through the purchase of zero-emission transit buses and the purchase of the lowest carbon intensity fuel available. This award would allow DoT to purchase the lowest emission engines available for its CNG bus fleet in the event that an engine suffers severe damage requiring its replacement. These low NOx engines produce 0.02 grams of NOx emissions per brake horsepower hour which is approximately 90% lower than the previous CNG engines. DoT has already repowered 45 of its transit buses with the low NOx engine and currently, 71 of its 177 transit buses are equipped with this low NOx engine. As the DoT is committed to converting its fleet to zero-emission vehicles, these engine overhauls or replacements will only be done on CNG buses that are not close to the end of their useful life. All new buses are zero-emission battery-electric buses, with 18 new buses being delivered in late 2021. 3.B Packet Pg. 22 3 of 4 This award would also allow for the continued use of Cummins’s services for engine repairs for DoT’s bus fleet and for repair, overhaul, and engine replacement services for Fire Department heavy-duty apparatus. Vendor/Consultant Selection Bidder Recommendation Best Bidder Cummins Inc. Evaluation Criteria Price, quality of services offered; ability to perform all services in accordance with City specifications; bidder experience and history providing these services to the City Municipal Code SMMC 2.24.180 Submittals Received Cummins Inc. $6,639,464 Gillig LLC No Bid Graybar No Bid Harbor Diesel and Equipment, Inc. No Bid Bid Data Date Posted Posted On Advertised in (City Charter & SMMC) Vendors Downloaded Date Publicly Opened 3/18/2021 City’s online vendor portal Santa Monica Daily Press 13 3/29/2021 Best Bidder Justification Bids were evaluated based on the criteria in SMMC 2.24.180 including price, ability to provide the services according to City specifications included in the bid. Cummins Inc. is the original manufacturer of the natural gas engines powering DoT's transit buses and provided a response that met the City's specifications. Three bidders submitted "No Bid" responses with two stating that they could not provide the services bid, and the third stating that their pricing would not be competitive compared to the Cummins Factory Service. Based on price, history providing this service to the City, and ability to provide services that meet the City’s specifications, Cummins Inc. is recommended as the best bidder. Financial Impacts and Budget Actions Staff seeks authority to approve funding from the Department of Transportation fund and General fund to award a contract with Cummins Inc. to provide engine repair, 3.B Packet Pg. 23 4 of 4 overhaul, and replacement services for the City’s fleet of Transit Buses and Fire Department heavy-duty apparatus. Funds in the amount of $1,012,236 are available in the Transportation Department capital fund, and $65,293 are available in the General fund. Contract/Agreement Request FY 2021-22 Budget Department/CIP Account # Total Contract Amount Request Amount $65,293 01190001.529470 $346,647 $1,012,236 C6004750.689000 $6,292,817 Prepared By: David Nanjo, Administrative Analyst Approved Forwarded to Council Attachments: A. Oaks Form_Cummins 3.B Packet Pg. 24 3.B.a Packet Pg. 25 Attachment: Oaks Form_Cummins (4364 : Award Engine Overhaul Bid)