AMERICAN PUBLIC TRANSPORTATION ASSOCIATION 2016 RAIL CONFERENCE WELCOME TO PHOENIX

Transcription

1 AMERICAN PUBLIC TRANSPORTATION ASSOCIATION 2016 RAIL CONFERENCE WELCOME TO PHOENIX

2 Michael J. Minnaugh General Counsel Valley Metro Phoenix, Arizona

3 KEY POINTS Greater Phoenix Regional Public Providers Regional Contracting Profile Contracting Philosophy Contracting Benefits / Risk Allocation Case Study Re procurement of Rail Transportation Services

4 REGION S MAJOR PUBLIC TRANSPORTATION ENTITIES Regional Public Transportation Authority RPTA Valley Metro Rail, Inc. VMR City of Phoenix Public Transit Department COP PTD Neither self performs the delivery of transit services All deliver services under the Valley Metro brand

5 REGIONAL CONTRACTING PROFILE Estimated Regional Contracting Totals with Private Third Party Providers Fleet Size 878 Staffing Size 2,153 Current Contract Value $957,832,739 Service Area Greater Phoenix Region

6 REGIONAL CONTRACTING PHILOSOPHY Contracting Out: Fixed Route Service and Maintenance Light Rail Transportation Services Paratransit Services

7 REGIONAL CONTRACTING PHILOSOPHY Services Contracted Out in the Greater Phoenix Region Bus Service Delivery and Related Maintenance Various private providers for the Region Vehicles provided by RPTA and City of Phoenix Rail Service Delivery One single provider for Valley Metro Rail since 2008 opening Currently re procuring

8 REGIONAL CONTRACTING PHILOSOPHY Service delivery and maintenance provided by third party private providers 3 to 5 year period of performance Options for extension of performance Contract pricing based on cost per mile Firm fixed pricing per contract year Contract pricing based on cost with fixed fee

9 CONTRACTING BENEFITS / RISK ALLOCATION Contracting Out Benefits Provides expertise and experience that may not be available locally Reduce costs and ability to expand services Employees hired directly by private third party provider Assists with labor and collective bargaining issues Provides for sound accountability and controls but must have strong contract administration Meets public entities objectives as they change over long periods of time

10 Contracting Out Risk Allocation Contractor bears full responsibility for: operations, safety, vehicle maintenance, parts, capital maintenance, fuel, insurance cost, escalation, technology etc. Contracting Out Risk Mitigation Strategies by Public Entities Purchase and furnish vehicles to Contractor, provide fuel, contract term length with options, include performance incentives, share insurance costs, allow for costs for capital improvements etc.

11 Valley Metro Rail Background CASE STUDY RE PROCUREMENT OF RAIL TRANSPORTATION SERVICES Valley Metro began rail operations in 2008 with the opening of its 20 mile system Contract awarded to Alternate Concepts, Inc. for management, supervision and labor One of the first, if not the first, light rail contracted service in the transit industry

12 Valley Metro Rail CASE STUDY RE PROCUREMENT OF RAIL TRANSPORTATION SERVICES Background (cont d) Cost reimbursable fixed fee, 5 year base term with 5 year option to renew Valley Metro assumes risk for insurance coverage and claims administration for contractor Estimated total contract value for 10 year term: $ 83M

13 CASE STUDY VALLEY METRO S RE PROCUREMENT OF RAIL TRANSPORTATION SERVICES Re procurement Challenges and Key Issues First and only rail contract, no comparative history No experience with other third party private providers and business models Historical costs and operational characteristics limited to incumbent Service expansions over past ten years

14 CASE STUDY VALLEY METRO S RE PROCUREMENT OF RAIL TRANSPORTATION SERVICES Re procurement Challenges and Key Issues (cont d.) Significant changes to overhead rates and performance measures No experience with alternative economics (i.e. firm fixed pricing and escalation contract models)

15 CASE STUDY VALLEY METRO S RE PROCUREMENT OF RAIL TRANSPORTATION SERVICES Pre procurement Acquisition Planning Activities Procurement outreach efforts to private third party providers Facilitated and conducted Request for Expression of Interest with industry Examined other proven contract models within our region and the transit industry

16 CASE STUDY VALLEY METRO S RE PROCUREMENT OF RAIL TRANSPORTATION SERVICES Pre procurement Acquisition Planning Activities (cont d.) Early coordination with internal customer to obtain detailed operational data Maintained risk ownership of insurance and claims administration Scope of Services scrub and refresh

17 Valley Metro Rail CASE STUDY VALLEY METRO S RE PROCUREMENT OF RAIL TRANSPORTATION SERVICES Re procurement Approach 5 year base with one 3 year and one 2 year option for extension with best value selection process Multiple contractor compensation models requested Cost plus fixed fee with not to exceed cap per contract year Cost per revenue mile per contract year escalation for both base and options to extend Cost per revenue mile, firm fixed per contract year. No escalation.

18 Valley Metro Rail CASE STUDY VALLEY METRO S RE PROCUREMENT OF RAIL TRANSPORTATION SERVICES Re procurement Status / Expectations RFP released 3/30/16 Pre proposal conference conducted 4/15/16 High level of interest and participation by third party private providers 4 addenda issued to date Additional solicitation content and details available at Valley Metro s e Bid website:

19 CASE STUDY VALLEY METRO S RE PROCUREMENT OF RAIL TRANSPORTATION SERVICES Re procurement / Expectations (cont d.) Proposals due 7/12/16 Multiple proposals submitted Extensive evaluation of three compensation models Invite you to follow our case study and results on our e Bid website at:

20 Thank You and enjoy your time at the APTA Rail Conference