One Gateway Plaza Mctropoliin Tknsmon Authority Los Angeles, CA OP , SOUTH REGION CONTRACT BUS SERVICES MV TRANSPORTATION, INC.

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1 Lor Angdes County One Gateway Plaza Mctropoliin Tknsmon Authority Los Angeles, CA 'Metra - OPERATIONS COMMllTEE JUNE 17,2010 SU WECT: ACTION: OP , SOUTH REGION CONTRACT BUS SERVICES MV TRANSPORTATION, INC. AWARD CONTRACT FOR CONTRACT BUS SERVICES RECOMMENDATION Authorize the Chief Executive mcer to: A. Award a five-year firm fixed price contract, Contract No. OP , to MV Transportation for Contract Bus Service, including compressed natural gas (CNG) fuel, in an amount not to exceed $74,637,395 and provide for reimbursement of fuel costs for the five-year period in an amount not-to-exceed $12,138,430 for a total contract amount not-to-exceed $86,775,825 effective October 31,201 0; and B. Execute future contract modifications to Contract No. OP in an amount up to $1,000,000 per contract modification. RATIONALE We operate 22 bus lines that are contracted to private transportation companies. The South Region contractor currently operates ten of these lines: 1 25, 128, 1 30, 205,214,232,607,608,625 and 626. The contract with the current South Region contractor, First Transit, Inc., expires October 30, Line Description El Segundo - Downey via Rosecrans Ave. Compton - La Mirada via Alondra Blvd. Redondo Beach - Cerritos via Artesia BI. 1mperialMlilmington Sta. - San Pedro via Wilmington Ave., Vermont Ave. & Western Ave. Artesia Transit Center - BroadwayMain St. Annual RSH 42,226 10,685 31,732 42,928 7,013 Annual Passengers 2,134, ,510 1,194,178 1,489, ,600

2 Total Loop - Harbor Freeway Station Long Beach - LAX via Sepulveda Blvd. lnglewood - Windsor Hills - lnglewood Crenshaw Connection Green Line Shuttle World Way West via Imperial Hwy. LAX - Greenline Shuttle 56,901 5,126 3,035 4,692 5, ,047 2,362,604 38,505 21,420 49,860 37,554 7,920,659 We began contracting a portion of our bus service in I QQ6. The first 13 contracted lines were existing services which we operated directly in-house. These lines were transferred because of their high subsidy per passenger. The remaining contract lines include some of the new local shuttle and Consent Decree services that have been added since 19Q6. Contracting a portion of the bus service has had both cost and operational benefits: Annual savings are realized through the lower operating wsts of the contractors. Modifications or expansion to existing bus divisions are not necessary when new services are added. Contracts allow greater flexibility in operation. Lines can be quickly added, cancelled, or modified. The current contract was a five-year contract that was awarded to First Transit in The new contract requires the contractor to pay for CNG fuel costs for CNG buses, but will continue to provide for reimbursement of actual fuel costs for diesel buses. The maximum cost that we will pay for diesel fuel is based on an index price published by the Oil Price Information Service. Reimbursement of diesel fuel used in revenue vehicles is a practice that we have used to remove the risk of volatile diesel fuel prices affecting prices over the five-year contract period and the potential need for price adjustments based on changes in fuel prices. We are requiring contractors to pay for CNG fuel for buses and determine whether to fuel buses onsite or at an off-site CNG station based on which strategy is most cost effective for their proposed facility. The new contract contains additional provisions related to vehicle maintenance, including mechanic staffing requirements, upgrading of ATMS equipment and additional performance standards and liquidated damages related to service delivery and vehicle maintenance. OP , SWTH REGION CONTRACT BUS SERVICES - MV TRANSPORTATION, INC.

3 The new contract term will begin October 31,2010 and end October 31,2015. The contract contains provisions that allow for service levels to be increased or decreased over the term of the contract based on our operating needs. MV Transportation is being recommended to operate this service for the new contract period. The firm has proposed to operate the service from a facility located at S. Wilmington Avenue in Carson, CA In March 2009, the Board approved additional funding for fuel, operations and maintenance of the existing bus fleet for Contracted Bus Services - East Region in the amount of $4,969,260. Since the majority of the buses in the South Region are beyond their useful life, the potential for increased maintenance costs exists. There may also be additional operational and fuel cost increases that would require contract modification. Therefore, it is requested that contract modification authority for $1,000,000 per contract modification be authorized rather than $500,000 per contract modification, in addition to the 10% contract modification authority of initial award value which is provided with all new contract awards. FINANCIAL IMPACT The funding of $1 I,I 53,224 for the first eight months of this five-year contract is included in the FYI 1 budget in cost center 3592, Contract Services South Region under project Bus Operations. In FYO9, $15,711,390 was expended on contracted fixed route transportation services in the South Region. Since this is a multi-year contract, the cost center manager and Executive ORicer will be accountable for budgeting the cost in future years. Impact to Bus and Rail O~eratin and Capital Budaet The FYI 1 funding for this service will come from the Enterprise Fund project , Bus Operations Transportation. No other sources of funds were considered for this activity because all of these services are funded through, and budgeted in, the Enterprise Fund. This acthrrty will not impact ongoing operating costs as the department has already budgeted for the services that must be provided to the region irrespective of which contractor is operating the service. ALTERNATIVES CONSIDERED Staff considered bringing the services in-house to be operated at a MTA bus division. Based on our proposed FYI 1 marginal bus operating cost of $89.80 per Revenue Service Hour, it would cost more to operate these services in-house and would require physical modifications to our facilities to operate and maintain the vehicles used for this service. The new cost for services including estimated fuel expenses, as shown in Attachment B, is $ The current contract rate, including actual fuel expenses incurred year-todate for FYI 0, is $78.59.

4 A. Procurement Summary A-I. Procurement History A-2. List of Subcontractors 8. South Region Pricing Prepared by: Shannon Anderson, Project Manager Susan Dove, Contract Administrator OP , SOUTH REGION CONTRACT BUS SERVICES - MV TRANSPORTATION, INC.

5 Ilot(kie Mitchell Chief Operations Mficer Arthur T. Leahy Chief Executive Officer rn U OP359M470, SOUTH REGION CONTRACT BUS SERVICES - MV TRANSPORTATION, INC.

6 BOARD REPORT ATTACHMENT A PROCUREMENT SUMMARY OP , SOUTH REGION CONTRACT BUS SERVICES MV TRANSPORTATION, INC I 7. Contract Number:OP Recommended Vendor: MV Transportation, Inc. CostlPrice Analysis I nforrnation: A. BidIProposed Price: $86,775,825 including estimated diesel fuel reimbursement Recommended Price: $86,775,825 including estimated diesel fuel reimbursement B. Details of Significant Variances are in Attachment A-I.D Contract Type: Firm Fixed Price Services - Cost Reimbursement - Diesel Fuel Procurement Dates: A. Issued: November 9,2009 B. Advertised: November 9,2009 C. Pre-proposal Conference: November 20,2009 D. Proposals Due: March I I, 2010 E. Pre-Qualification Completed: February 2010 F. Conflict of Interest Form Submitted to Ethics: May 17,2010 Small Business Participation: A. BidlProposal Goal: DALP: 10% Date Small Business Evaluation Completed: May 14,2010 B. Small Business Commitment: 0.57% DALP. Details are in Attachment A-2 Invitation for BidlRequest for Proposal Data: Notifications Sent: BidslP roposals 6 Picked up: 36 Evaluation Information: A. BiddersIPro~osers Names: MV Transportation First Transit BidIP ro~osal Amount: $74,637,395 exc. diesel fuel $80,664,799 exc. diesel fuel BidslP roposals Received: 2 NIA B. Evaluation Methodology: Details are in Attachment A-1.C Protest Information: A. Protest Period End Date: June 23,2010 B. Protest Receipt Date: C. Disposition of Protest Date: Contract Administrator: Susan M. Dove Project Manager: Shannon Anderson Telephone Number: Telephone Number: Best and Final Amount NIA OP35W2470, SOUM REGION CONTRACT BUS SERVlCES - MVTRANSPORTATION, INC. 6

7 A. Backaround on Contractor BOARD REPORT ATTACHMENT A-I PROCUREMENT HISTORY CONTRACT NO. OP SOUTH REGION CONTRACTED BUS SERVICES MV Transportation was founded in 1975 as a small family owned local transit company operating five locations. During the 1990s, as a result of mergers, and consolidations within the transportation industry, MV Transportation's span of operation increased. Currently, MV Transportation is the largest private provider of paratransit services and the largest privately-owned transportation contracting firm in the United States. MV Transportation employs more than 12,000 employees at more than 100 locations, and operates more than 190 paratransit, fixed-route, shuttle and Medicaid contracts in 24 states, the District of Columbia, and British Columbia..MV Transportation's clients include Washington Metropolitan Area Transportation Authority (WMATA), City of Los Angeles' DASH and Commuter Express, San Mateo County Transit District (SAMTRANS), City of Glendale and Foothill Transit. MV Transportation has also satisfactorily operated Los Angeles Metropolitan Transportation Authority (MTA) Line 58 from 2000 to B. Procurement Backaround The Request for Proposal (RFP) required vendors to propose a fixed rate for each revenue service hour (RSH rate) that would be needed to provide the proposed bus service. The revenue service hour costs include all operation and maintenance costs with the exception of diesel fuel for revenue vehicles. Because of rising fuel costs, and recommendation from Management Audit Services Department, the fuel costs will be directly reimbursed to the contractor based on the Oil Price Information Services (OPIS) index. The Diversity and Economic Opportunity Department (DEOD) recommended a DALP% of 10%. The Risk Management Department recommended specific insurance provisions applicable to this procurement. The recommended insurance limits ensure that the contractor will be able to cover any and all repairs to damaged buses. C. Evaluation of Proposals All firms were given the opportunity to inspect the vehicles utilized in the performance of the services. Two proposals were received and evaluated according to the procurement policies and procedures, using the explicit factors evaluation methodology approved for this RFP. The RFP evaluation criteria recognized the

8 assigned in connection with this procurement. Compliance with Califomia Labor Code Sections was included as a bonus evaluation criterion. All firms certified that they complied with the California Labor Code The source evaluation committee consisted of MTA staff representatives from Contracted Transportation Services, Quality Assurance, Service Development and Safety Departments. A representative from an outside transit agency which utilizes contractors to operate similar size senrice was also represented on the source evaluation committee. MV Transportation and First Transit submitted proposals in response to the RFP. The source evaluation committee evaluated the proposals. The source evaluation committee deemed all firms technically qualified to perform the work. Based on the source evaluation committee's preliminary evaluation, MV Transportation received the highest technical ranking and the overall highest weighted score and also offered the lowest price. After the preliminary evaluation, the source evaluation committee conducted site visits of all proposed sites. Following the site visits, clarification interviews and discussions were conducted with all firms. After the site visits and clarification interviews, the source evaluation committee reconvened to evaluate the proposals. The preliminary evaluation did not change. Based on the Source Selection Committee's final evaluation, MV Transportation received the highest technical ranking and the overall highest weighted score, and remained the lowest priced offeror. Since there were no outstanding technical deficiencies that would affect cost, and the proposed prices reflected the firms understanding of the statement of work, the source evaluation committee determined that a request for best and final offer or revised pricing was not warranted. The Diversity and Economic Opportunity Department recommended a DALP of 10% for this solicitation. MV Transportation initially proposed a DALP of 16.38%. But after the preliminary DBE evaluation, it was determined, that the proposed subcontractor, Pinnacle Petroleum was no longer a certified Disadvantaged Business Enterprise (DBE) firm. Therefore, Pinnacle's participation could not be counted toward the DALP. The final DALP commitment was calculated at 0.57%. The awardee will be strongly encouraged to utilize DBE firms when opportunities are available. MV Transportation, a former DBE certified firm, is currently the largest African-American owned Transportation Company in the nation. D. CostPrice Analysis Explanation of Variances The recommended price of $86,775,825 including diesel fuel reimburement has been determined to be fair and reasonable based upon adequate price competition. OP , SOUTH REGION CONTRACT BUS SERVICES - MV TRANSPORTATION, INC.

9 BOARD REPORT ATTACHMENT A-2 LIST OF SUBCONTRACTORS CONTRACT NO. OP SOUTH REGION CONTRACTED TRANSPORTATION SERVICES PRIME CONTRACTOR - MV Transportation, Inc. Small Business Commitment Teams By Design, Inc. TmEmMmPmSml INC. Other Subcontractors 0.20% Pinnacle Petroleum, Inc. 0.37% Total DBE Commitment 0.57% OP , SOUTH REGION CONTRACT BUS SERVICES - MV TRANSPORTATION, INC.

10 BOARD REPORT = ATTACHMENT B South Region Pricing MV Transportation, Inc. Revenue Service Hour (RSH) Rate - Diesel Fleet Annual RSH Operating Cost Year 1* $ ,430 $1 1,989,141 Year 2 $ ,430 $1 1,897,751 Year 3 $ ,430 $12,448,247 Year 4 $ ,430 $12,833,678 Year 5 $ ,430 $1 3,261,043 Total Revenue Service Hour (RSH) Rate - CNG Fleet Annual RSH Operating Cost $ ,618 $2,313,009 $ ,6 17 $2,298,007 $ ,617 $2,388,370 $ ,6 1 7 $2,568,650 $ $2,638,899 Total Contractor Price $14,302,150 $14,195,758 $14,836,617 $1 5,402,328 $15,900,542 $74,637,395 Estimated reimbursable diesel fuel costs Total Contract Award $2,427,688 $1 6,729,8% $2,427,686 $1 6,623,444 $2,427,686 $1 7,264,303 $2,427,686 $1 7,830,014 $2,427,686 $1 8,328,228 $12,138, ,775,825 Average Cost per Revenue Service Hour (incl. Estimated reimbursable diesel fuel) $79.65 $79.14 $82.19 $84.89 $87.26 Contract begins During FY 1 1, projected expenditures am approximately $1 1,153,224 OP , SWTH REGION CONTRACT BUS SERVlCES - MV TRANSPORTATION, INC.