Title
North/South Transit Facilities Fixed Route Services - Request for Contract Award (Ordinance S-46592)
Description
Request to authorize the City Manager, or his designee, to enter into an agreement with Transdev Services, Inc. for the management and operation of fixed route services at the City's North and South transit facilities. Also request to authorize execution of amendments to the agreement as necessary within the Council's approved expenditure authority as provided below. Further request to authorize the City Controller to disburse all funds related to this item. The total cost of the agreement will not exceed $790,191,716 over seven years.
Report
Summary
The fixed-route (bus) transit services operated from the City's North and South transit facilities are based on a fixed cost (cost per mile) contract. The current contract comprises approximately 70 percent of Phoenix’s bus service and expires June 30, 2020. The bus operations from the from the City's North and South transit facilities employ 990 local staff to operate, maintain, and administer this contract on behalf of the City. That number reflects the recent growth of the transit system as the city has continued to improve and add bus services as part of the Phoenix Transportation 2050 plan (T2050).
There is a combined fleet of 340 vehicles between these two transit facilities, which provide service on 36 bus routes throughout the region with a current operation level of over 15 million miles per year. The routes include 27 regional, 6 RAPID, and three circulator routes. Services provided under the existing contract have accounted for an average of approximately 2 million passenger boardings per month.
Procurement Information
In accordance with Council authorization on April 17, 2019, the City of Phoenix Public Transit Department issued a Request for Proposals (RFP PTD19-007) on Aug. 29, 2019 to solicit a contract for the operation of fixed route transit services from the City’s North and South transit facilities. The initial five-year base contract will begin July 1, 2020, and includes a two-year option to extend if the contractor has performed satisfactorily during the base period and it is in the City’s best interest to exercise that option.
The Public Transit Department receives considerable funding from Federal Transit Administration grants to operate bus service. Therefore, all procurements and contracts must comply with federal requirements and process guidelines. The process used to develop the work scope for the RFP and select the contractor for recommended award complies with federal guidelines.
A pre-proposal conference was held on Sept. 11, 2019, with site visits held immediately after to provide proposers with an opportunity to review the City’s facilities and transit fleets. As part of the procurement process, the City supplied 49 exhibits and responded to over 200 proposer questions to provide detailed information on current transit operations and performance, vehicle conditions and replacement plans, employee wages and benefits, and various other topics of inquiry. The City also extended the submission deadline in response to proposers’ requests. On Nov. 15, 2019, proposals were received from the following firms:
ACI Hallcon
First Transit, Inc.
RATP Dev USA
Transdev Services, Inc.
An evaluation committee and technical advisory team was assembled to conduct detailed evaluations of the proposals and select the proposer recommended for contract award. Both the committee and the technical team consisted of qualified staff from the City's Public Transit and Public Works departments and the City of Glendale, which purchases transit services from the City.
As approved by the City Council, the following evaluation criteria were used to determine the recommended awardee (1,000 points possible):
Offeror’s qualifications, expertise, and performance (250 points)
Offeror’s understanding of the scope of work and transition plan (200 points)
Offeror’s proposed management and personnel (150 points)
Offeror’s total cost (400 points)
The evaluation panel and technical advisors met during December 2019 and January 2020 to discuss each proposal in depth. All four proposers were then invited to in-person interviews with the evaluation committee on Feb. 19, 2020, to address their proposals. After the interviews, the evaluation committee convened to conduct final scoring at which time they recommended to award the contract to Transdev Services, Inc., which received the highest overall technical score based on the evaluation criteria. The final scoring (1,000 points max) and seven-year cost proposals are shown below:
Transdev Services, Inc.: 983 points, $790,191,716
First Transit, Inc.: 919 points, $821,168,004
RATP Dev USA: 810 points, $757,503,336
ACI Hallcon: 745 points, $852,894,261
Additional Information
With the RFP process having begun in August 2019, the COVID-19 pandemic and its impacts could not have been anticipated during the solicitation period. However, the Public Transit Department develops its bus service procurements to account for economic changes, which may result in increases or decreases in service needs. This is accomplished through pricing tiers, whereby proposers provide a base cost per mile according to the approximate level of service being operated at the time of the RFP’s issuance. As requested in the RFP, proposals include additional tiered pricing for the following levels of increases or decreases in service for each fiscal year anticipated under the contract:
Cost per Revenue Mile: 10.01 to 15 percent increase
Cost per Revenue Mile: 15.01 to 20 percent increase
Cost per Revenue Mile: 20.01 to 30 percent increase
Cost per Revenue Mile: Base Mileage ±10 percent
Cost per Revenue Mile: 10.01 to 15 percent decrease
Cost per Revenue Mile: 15.01 to 20 percent decrease
Cost per Revenue Mile: 20.01 to 30 percent decrease
If necessary, any reductions or increases to service that exceed 30 percent from the base level would be negotiated with the contractor for a revised cost per mile at that service level. A thorough cost analysis by the City is required should this level of change occur. As a result, this proposed contract award provides known pricing throughout the contract period (five to seven years) that can be utilized to plan for and respond to any service decreases resulting from a weaker economy due to the COVID-19 pandemic, as well as service restorations after improvements to the economy.
In addition to the 990 local jobs currently supported by this contract, Transdev Services, Inc. in its proposal commits to continue building upon their relationships within the community for local and small business utilization as well as local recruitment efforts, including partnerships with the Arizona Veteran Supportive Employer (AVSE), and Military/Veteran Resource Network programs and Local Job Network. Transdev Services, Inc. also plans to launch a transit-focused internship for high school students. Other partnerships the company maintains locally are:
Ability360
Arizona Transportation Association (AzTA)
Chicanos Por La Causa
Hance Park Conservancy
My Brother’s Keeper
Opportunities Industrialization Center (OIC)
Phoenix Community Alliance
Sister Cities
Southwest Human Development
St. Vincent de Paul
Transdev also partners with several local disadvantaged business enterprises (DBEs) to fulfill the company’s commitment to the City, including:
Capp Uniforms
Competition Auto Body
Graphic Ideals
LJ’s Cleaning Solutions
Megan’s Auto Body
Mjach Designs
Contract Term
The agreement is a base five-year term with one option to extend for two years if it is in the City's best interest to do so. The agreement will begin on or about July 1, 2020.
Financial Impact
The total cost of the agreement, if entered with Transdev Services, Inc., is estimated at $790,191,716 for both the five-year base and the optional two-year extension of the contract. Funds are available for the estimated first contract year amount of $99,960,275 in the Public Transit Department's proposed fiscal year 2020-21 operating budget.
Concurrence/Previous Council Action
This item was recommended for approval at the Citizens Transportation Commission (CTC) meeting on April 23, 2020, by a vote of 11-0, 1 abstain, 1 recuse.
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Public Transit Department.