2010 North American Snow Conference 4/20/1010

Transcription

1 Durham Regions History and Future. Welcome To Contract out, or not to? To Contract out, or not to? & Who are we? Within the Region, there are 8 local municipalities. Durham s roads consist of the arterial network throughout all the local jurisdictions. Approximately 2,200 L/Km (or 1,400 L/miles). To Contract out, or not to? & Who are we? 2 Regional units Population of 610,000 The Region currently utilizes 35 combination units of our own and contract out 21 units. Where the Region was, and past contract logistics. 3 different contract holders/awards 3 different sets of equipped fleets Invoicing/billing, keeping all three consistent The Region having to supply hopper bodies to some of the contractors Where the Region was, and past contract logistics. Unable to move or shift contracted staff, if shorthanded to other depots Restriction on dictating age or re-specifying equipment Manual operated spreading units Material usage accountability 1

2 Older style units with Regional hopper bodies supplied. Opportunity: Expansion and demands on the road network dictated we needed to re-asses how and what direction the new contract would proceed in. A sole contractor, with tight specs, and long term was deemed to have merit for both Durham and the prospective bidders. Opportunity: All existing contracts came due at the same time, which gave the Region a window of opportunity to proceed with an all encompassing sole contractor to provide one particular piece of equipment across the Regions five works depots. Addressing 3 main factors: Assessment of your existing limits and regulations. Define your desired fleet type, configuration and duration of the contract. Develop specifications to match you re goals, standards and measured outcomes. Problem solving, Prepare and Recognize the unexpected. Communication and Identifying challenging situations. Where to begin and how to select the best contractor for your operation. Know your limitations. Your agencies LOS is a good location to start in assessing your needs/requirements in creating contract specifications. Budget/Finance constraints will also influence the shape of the contract. Pricing options: 4 common methods. Per Occurrence Seasonal, (One all inclusive price) Hourly (Call out) and Stand-By (per day or 24 hour period) Per tonne or per application or per event 2

3 For Durham Regions pricing methods, we elected to go with: 1. Call out, per hour. i.e. $ 25 to $ Stand-By, per 24 hour period, i.e. $ 200 to $ 400 With this method, you will likely have to establish a benchmark in the contract to the bidders, an estimate of Call out hours and the number of Stand-By days. Specifying your contract: The Region of Durham elected to go long term with a 9 year contract. Specifying age of units, numbers, blade dimensions, hopper capacity, dual spinners, to lighting. Specifying your contract: A Contracted Combination Unit GPS units were also specified and affixed at the contractors initial cost and the Regions monthly costs. A guarantee of Stand By days; 140 days An estimate of 300 hours per unit for call out hours were provided. Write your specs so that not only the Industry understands, but the legal aspects are understood from within your agency. Plan well ahead, the prospective tenders will appreciate and need the time to present a competitive bid and still be able to provide the equipment you require. START EARLY! Take into account Performance Requirements Scope and definitions Contractors responsibilities and obligations Outcome Targets and indicators Consequences for Non-Conformance 3

4 Take into account Performance Requirements Circuit Times Application and Calibration Rates Plowing Continuous / Echelon Equipment Utilization Expected Levels of Service Be specific where the units will be required and how many at each facility. Define your agencies ability to move equipment to another jurisdiction as needed. Draw and Select from Qualified contractors, with a history of Winter Maintenance. Get to know your potential bidders. *Changes mid contract. Are you releasing or accommodating additional routes? Consider if the contractor should have a first right of refusal. Can these be done by internal or external forces? Define what your agency is able to provide as part of this contract. Address breakdowns and none response. Place financial mechanisms that charge back for non conformance. The penalty may be two fold. 1/ Short term, may be by the hour. 2/ Long term, by the day (24 hr period), could be the daily Stand By. The Specifications can be vague or particular. Communication during an impending event. Setting up a Dispatch may form part of the contract. Unit Licensing and Inspection may differ, but should still be part of your Tender document. 4

5 Section off the specs. Equipment Specifications Operators experience and qualifications Spreader Controls Washing Section off the specs. Pre-Wetting Extra s, GPS/AVL systems Bond Agreement Surety Call out Conditions and Time Spec your contract with some flexibility either by; Unit Location Types of units Duration, i.e. 5 years, Size and Spreader Capacity Adding more units The Specifications can be particular. Fuel Cost Adjustments Operator Break Time Sub-Contracting Travel Allowances Form of Tender. Arrange your Pricing Section in an easy to follow format. Make sure to address which units go where on the tender document. Specifying your Pricing component: Location Unit # s Req d. A Daily Standby B Est. # of Days C Total Standby AxBxC=D A B C North 3 $ $ 168,000 Central 2 $ $ 98,000 East 3 $ $ 168,000 5

6 Specifying your Pricing component: Est. Hrs Call out E Call out Rate / hr F Total Est. Call out (x 3 Units) ExF=G 300 $ 20 / hr $ 18,000 $ 186, $ 20 / hr $ 12,000 $ 110,000 Est. Overall Cost D+G=H H 300 $ 20 / hr $ 18,000 $ 186,000 GT= $482,000 Specifying your Pricing component: I.e. Full cost for truck, operator. Yearly or Seasonal. Combination Unit #1 Combination Unit #2 Front End Loader w/ Front blade & Wing Duration Year 1 $ 25,000 $ 25,000 $ 18,000 $ 68,000 Plus Taxes (@ 10%) $ 6,800 Yearly Total $ 74,800 Communication / Cooperation Challenging Situations and Resolve: Maintain close communication w/ successful bidder. Make sure the contractor knows your agencies expectations / operations plan. Keep staff in the loop. Communication / Cooperation Challenging Situations and Resolve: Identify worst case scenarios, and plan ahead. Protect your agency s road network and infrastructure. Realize that all decisions made have operational and financial implications. Take measure to mitigate these. Longer term contract = more certainty, & better prices Innovation is possible Contractors will only improve with experience. Manage your issues as they arise Be open to the contractors input Regular consultation is vital 6

7 Plan for the next storm and future years. Implement change gradually Ensure solid executive support and direction Maintain accurate records and paper work Document every event Contracting out: Outsourcing of Winter Maintenance Equipment provides an opportunity. Allows for Value calculations/measurements via; Inputs Outputs Outcomes A long and deliberate process Communicate with other municipalities Ensure your Service Provider is accountable Not to be viewed as a construction contract Sustainability / Summary Industry Relationship Management Performance Measurements / Ratings / Outcomes Competitive process, Internally & Externally Sustainability / Summary Contract Management Expectations & your Standards Administration & Record Keeping Financial Commitment Knowledge Management Traditional vs. Modern Summary To Contract out or Not to Contract out? Make an informed assessment that fits your agencies parameters. There is no secret formula Thank you. Prepared by: Warren Nicholishen, Roads Coordinator, Regional Municipality of Durham For: A.P.W.A 2010 Snow Conference, Omaha NE 7