MEETING DATE: January 25, 2019 ITEM 8. Stephanie Wiggins, Chief Executive Officer

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1 REVISED January 23, 2019 Page 6 as shown in track changes TRANSMITTAL DATE: January 18, 2019 MEETING DATE: January 25, 2019 ITEM 8 TO: FROM: Board of Directors Stephanie Wiggins, Chief Executive Officer SUBJECT: Update on Bundled Operations and Maintenance Contract Solicitation Issue Staff is providing an update on the efforts to prepare a bundled contract solicitation for the Authority s rail operations and maintenance functions. Recommendation It is recommended that the Board approve the proposed Bundled Operations and Maintenance contractor scope elements shown in Attachment A. Strategic Goal Alignment This report aligns with the strategic goal to improve organizational efficiency by consolidating operating, administrative, and management functions. Background The Board authorized the Authority to pursue a bundled contract for operations and maintenance (O&M) at its June 22, 2018 meeting. Subsequent updates have been presented to the Board and the Ad Hoc Committee which was established by past-chair Kotyuk. Staff has met regularly with the Ad Hoc Committee to receive direction and provide updates on this procurement. The objectives of the bundling approach include achieving the following potential advantages: Overall efficiencies in the performance of work and administrative effort Greater accountability and reduced finger-pointing among contractors and staff Consistent management and customer service philosophy Streamlined contract administration processes Improved cost forecasting for member agency financial planning 22

2 Page 2 Include all federal contract requirements to maintain the capability and flexibility to utilize federal funding In accordance with Board direction, staff is working on an aggressive procurement schedule in order to have a new contract executed in time to avoid an extension to the existing Amtrak Operating Services Contract, which expires July 1, Significant progress has been made to advance the solicitation process, including the following: A multi-disciplinary team of staff, consultant and legal experts are fully engaged in the development of solicitation documents Conducting industry review and outreach to commuter rail properties and operators similar to Metrolink that have contracted out their O&M to record best practices Preparing recommendations for the bundled contract s scope Advancing the pricing approach for each of the O&M scope elements Ensuring compliance with the Authority s Disadvantaged Business Enterprise (DBE) program. Staff has also developed a very aggressive schedule in order to produce comprehensive procurement documents, complete the procurement process, support contractor mobilization and begin train operating services under a new contract by July In order to minimize impacts during the transition process, staff is considering a phased approach to the turnover of all O&M functions for up to a year following the initial train operations in-service date. The anticipated term of the contract after the mobilization period is recommended to be for a base period of seven years with optional renewal periods of up to eight additional years. Procurement Next Steps The project team is working vigorously to finalize the Request for Proposal (RFP), detailed scope of services and associated technical exhibits. A list of the recommended scope elements is included in this report in Attachment A. A narrow window remains for modifying these scope elements and other components of the RFP before impacting the overall timeline, which includes expected formal RFP issuance in March Evaluation criteria will be brought to the Board for approval in March, prior to issuance of the RFP. The following table provides an overview of anticipated key milestones for the procurement, contract execution, contractor mobilization and transition. Milestone Estimated Completion Date Draft RFP Package Published for Industry Review February 11, 2019 Contractor/DBE Open House February 15 & 16, 2019 Board Meeting Prior to Release of RFP March

3 Page 3 Milestone Estimated Completion Date Pre-proposal Meetings and Q&A May 2019 Proposals Due July September (Quarter 3) 2019 Proposal Evaluations and Interviews, Negotiations, Legal review and Contract Conformance October December (Quarter 4) 2019 Board Award October December (Quarter 4) 2019 Mobilization and Transition Period Late 2019 June 2021 In-Service Date Train Operations July 1, 2020 In-Service Date All O&M Functions July 2020 June 2021 Challenges and Risks The following are some of the key challenges and risks that the project team is working to address: Schedule - The schedule is very aggressive for finalizing a comprehensive scope of services, including performance requirements, payment terms and detailed technical exhibits for RFP issuance in March Issues that arise during the procurement, negotiation and award process could impact the July 2020 in-service date Competition Although there is strong market demand for O&M services and the Authority anticipates multiple proposers on this solicitation, there may be a limited number of qualified proposers for certain elements of this procurement Proposal pricing It is uncertain how bidders will evaluate asset conditions, fixed price risk, market conditions, and other factors that impact pricing on this procurement Mobilization and transition Staff conducted outreach to other agencies and is aware of the significant challenges they faced during the transition of labor forces, equipment and responsibilities between contractors and from reimbursable to fixed pricing payment terms Asset condition Significant investment is required for repair and replacement of Authority assets in order to bring them to a State of Good Repair as prescribed in the Authority s standards Level of oversight - Achieving efficiencies in contract administration and management while ensuring sufficient detail and control for oversight and performance Organizational changes Minimizing potential impacts to organization and employees NOTE: No Metrolink staff layoffs will occur as a result of the bundled contract. Staff will continue to address and mitigate these challenges and risks and keep the Board apprised of updates. 24

4 Page 4 Disadvantaged Business Enterprise (DBE)/Small Business Enterprise (SBE) Requirements The Authority has engaged its DBE consultant to help in developing the DBE requirements for this RFP. The DBE goal for the contract has not yet been established but will be included in the RFP. Authority staff is conducting DBE outreach, hosting a presolicitation informational meeting with the DBE community to connect DBEs with potential partnering contractors, and incorporating recommendations from the DBE consultant into the final contract documents. Budget Impact There is no budgetary impact as a result of this report. Prepared by: Darrell Maxey, Interim Chief Operating Officer Greg Tatar, Director, Contracts, Procurement, and Materials Management Darrell Maxey Interim Chief Operating Officer Elissa K. Konove Deputy Chief Executive Officer 25

5 Page 5 Attachment A Proposed Bundled Operations and Maintenance (O&M) Contractor Scope Elements Recommended O&M Contractor Scope of Services Current "Big Four" Base O&M Contracts Operating Services (Amtrak) Equipment Maintenance Services (Bombardier) Track, Structure, Right of Way Maintenance (VTMI) Signal, Communications, Level 1 Train Control System Maintenance (MASS Electric) Other Contracted Services ( Big Four Extra Work Task Orders or Separate Contracts) Right-of-Way Trash/Debris/Graffiti/Vegetation Control, Rail Detection, Rail Grinding, Hazardous Material & Environmental Clean-up Services, Incident and Derailment Response Facility Maintenance at Central Maintenance Facility (CMF), Eastern Maintenance Facility (EMF), Los Angeles Union Station (LAUS) and Layover Yards Station Customer Information System (CIS) Maintenance Flagging Minor to Mid-size Rehabilitation Projects (as needed) Return to Service Inspection, Rehabilitation and Capital Project Support Current SCRRA-Performed or -Managed Functions Material Procurement (O&M, Rehabilitation and Capital) and Inventory Management Non-revenue Rubber Tire Vehicles and Special Railroad Maintenance Equipment - Procurement & Maintenance (Including Fuel) Diesel Fuel and Fuel Procurement Services Optional Planned and Unplanned Bussing and Bus Bridge Services and Coordination 26

6 Page 6 Attachment A Proposed Bundled Operations and Maintenance (O&M) Contractor Scope Elements Recommended as Contract Option to the O&M Solicitation Dispatching, Communications Coordinators and Closely Related Services Recommendation Not to Include in the O&M Contract Ticket Vending Machine (TVM) Maintenance Fare Collection, Marketing, Information Technology (IT) and Other Business Functions Security - Sheriffs and Security Guards Station Maintenance by Cities (except LAUS) Facility Maintenance at Pomona Campus Utilities and Leases Vehicles and Equipment for Authority Staff Advanced Positive Train Control (PTC) Train Control Maintenance, Support and Software Licenses Major Rehabilitation and New Capital Projects and Procurements Dispatching, Communications Coordinators and Closely Related Services 27