HomeMy WebLinkAboutStaff Report 2286City of Palo Alto (ID # 2286)
Finance Committee Staff Report
Report Type:Meeting Date: 12/6/2011
December 06, 2011 Page 1 of 4
(ID # 2286)
Summary T itle: Status of Fleet Related Audit Recommendations
Title: Request for Comment on Scope of Services for Leasing, Maintenance, and
Management of Light-Duty and Transport Vehicles and Status of Related Fleet
Audit Recommendations
From:City Manager
Lead Department: Public Works
Recommendation
Staff recommends that the Finance Committee review the attached draft Scope of Services
(Attachment A) for the Leasing, Maintenance, and Management of Light-Duty and Transport
Vehicles, provide comment, and if appropriate direct staff to solicit proposals for these services.
Executive Summary
This report includes an update on the status of related fleet audit recommendations. In April
2010, the City Auditor’s Office released an Audit of Fleet Utilization and Replacement. Of the
twenty-two (22) recommendations contained in the audit report, four (4) were related to
optimizing the fleet, improving fleet utilization, and aligning future fleet vehicle replacements
with the City’s sustainability goals. Staff has already taken action to implement these
recommendations, and is proposing the option of vehicle leasing as an enhancement to the
actions already taken, as well as to promote additional cost savings in the fleet operation.
Audit Status Update
Staff has taken the following actions in response to the audit recommendations. These actions
focused on the light-duty/transport portion of the City’s fleet, which consists of approximately
250 automobiles, light trucks, and vans.
Increase Fleet Utilization and Identify an Optimal Fleet Size
The audit report included a recommendation that Public Works develop an action plan for
increasing fleet utilization and identifying an optimal fleet size and composition that includes:
eliminating or re-assigning underutilized vehicles; exploring opportunities to rent specialized
equipment; not replacing vehicles; utilizing mileage reimbursement; rotating vehicles, and
placing underutilized vehicles and equipment in a centralized motor pool.
In response in FY 2010 and FY 2011 Public Works surveyed the utilization of the City’s light-
duty/transport vehicle fleet, identified underutilized vehicles, and made recommendations for
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their disposition to the Fleet Review Committee (FRC). The FRC was formed in response to
another of the audit recommendations, and provides executive oversight to fleet-related
activities. The FRC consists of the Assistant City Manager, Director of Administrative Services,
and Director of Public Works.
After reviewing the staff recommendations, the FRC met with representatives from the affected
departments so that they could provide additional information regarding the utilization of
vehicles recommended for elimination. Over the last two years, the FRC has successfully
reduced the transport fleet by 10%, and further recommended that 14 vehicles be removed
from direct assignment and assigned to the centralized motor pool. An additional two (2)
vehicles were voluntarily consigned by the Utilities Department. Another fleet utilization study
is currently being conducted as part of the FY 2012 budget process.
Complete Implementation of a Centralized Citywide Vehicle and Equipment Pool
Public Works had already begun the implementation of a centralized citywide vehicle pool prior
to the audit. The centerpiece of the vehicle pool program is an automated pool vehicle
reservation system that is currently testing at the Municipal Services Center (MSC). This system
will be expanded to another location within the MSC, to the Utilities Department’s Elwell Court
location, and to the Civic Center. The equipment needed to outfit these locations is currently
on order and scheduled for installation in January 2012. Vehicle users will be oriented to the
new reservation system immediately thereafter, and staff expects full implementation to be
completed by March 2012. Initially, vehicles and equipment that are currently assigned to
these vehicle pool locations will be integrated into the automated system. Later, Public Works
will work with vehicle pool users to determine their needs and develop an optimal mix of
vehicles and equipment for each pool location.
Leasing and Potential Outsourcing of Light-Duty/Transport Vehicles
During the implementation of the audit recommendations, staff determined that fleet
efficiency could be further increased, and fleet costs further reduced, through leasing and
potentially completely outsourcing the maintenance and management of light-duty/ transport
vehicles. This determination was made based on the following factors:
Reduced Depreciation Costs and the Elimination of Replacement Charges
Currently, these vehicles are purchased, kept on average ten years, and then properly disposed
through an auction firm. Over this period, they experience a great deal of wear and tear, and
vehicles are fully depreciated with residual values being generally very low. Over the same
period, replacement charges are collected from departments to fund the purchase of the next
replacement vehicle. In a lease, depreciation costs are expensed over a much shorter period
(typically three to five years), and the residual value of the vehicle is much higher, since it will
be newer and in better condition at the time of disposal. Since the vehicle will not be replaced
through a purchase a capital expenditure is avoided. The lease payments will generally be
lower than the replacement charge since the lease payment is based on the value of the
current vehicle (less the higher residual value), while the replacement charge is based on the
cost of the future vehicle (less a much lower residual value).
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Reduced Operation and Maintenance Costs
Under the current system of outright purchase and ownership of fleet assets, vehicles are
typically kept for extended periods of time. Due to the City’s small service area and the low
mileage accumulation of most vehicles, it is not financially prudent to replace them on a more
frequent basis. These extended replacement cycles have several drawbacks. First, these older
vehicles are less efficient and more polluting than newer vehicles. Second, as they reach the
end of their economic life, these vehicles generate major maintenance and repair expenses that
would not be experienced by vehicles that are cycled at three to five year intervals.
Beyond the basic leasing of light duty fleet vehicles, there are other cost-saving alternatives
that should be explored. Staff has included, in the attached scope of services, a requirement
that proposers submit proposals for maintenance services and potentially full management of
the City’s light-duty/transport fleet.
The City’s overall fleet is diverse, and contains a wide variety of complex equipment that
requires a high skill level in order to maintain and repair. Much of this work is not easily
outsourced. However, a majority of the work performed on light-duty/transport vehicles is
routine in nature, and does not require highly skilled technicians to perform it. This will be
even more the case if vehicles are leased and replaced on a more frequent basis. Because of
this, the maintenance and repair of light duty vehicles might be better outsourced, so highly-
skilled staff could focus on the maintenance and repair of more complex and demanding
vehicles and equipment. This will result in improved scheduling, decreased vehicle downtime,
and better response to client departments.
Outsourcing the maintenance of light-duty vehicles by itself might not be a cost-effective
solution, unless the maintenance contractor was willing to pick up and deliver the vehicles.
Vehicle transport is very expensive and time consuming to perform with in-house staff. To
address that the attached scope of services also includes a requirement that proposers submit
proposals for the full management of vehicles that are leased.
Align Future Fleet Replacements with the City’s Sustainability Goals
As mentioned previously, light duty vehicles are typically kept for 10 years. Given the current
pace of technological change, this replacement interval inhibits the City’s ability to take
advantage of improvements in fuel efficiency, emissions, and safety. Through leasing,
replacement intervals can be decreased significantly, allowing the City to leverage changing
technology. The attached scope of services also requires the proposal of alternatively fueled
vehicles;including hybrids, compressed natural gas, and plug-in electrics.
Potential Consequences of Vehicle Leasing
While leasing and full management of light-duty/transport vehicles will reduce maintenance
demand, it will also increase the staff time required to manage the vehicles. In a lease, it is
imperative that the maximum residual value be attained at the time of turn-in, in order that the
City is not required to pay the difference between the Reduced Book Value and the proceeds
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realized from the sale of the vehicle. Since most of the leased vehicles will be assigned to a
centralized pool, careful monitoring and management will be required in order to insure that
the vehicles are kept in good condition so that maximum residual value is attained.
Implementation of the Leasing Program
If staff is successful in entering into a contract for the leasing and management of light-
duty/transport vehicles, the initial focus will be to lease a sufficient number of vehicles to
replace those in the centralized vehicle pool. This will occur after consultation with vehicle
users, as mentioned previously. As other replacement needs arise, leasing will be considered as
an alternative to ownership. Other scenarios, where leasing may be appropriate would be the
acquisition of sedans for Police Investigative Services and light trucks and vans used by field
technicians and supervisors.
Timeline
Upon approval of the attached scope of services, staff expects to issue a Request for Proposals
for the Leasing, Maintenance, and Management of Light-Duty and Transport Vehicles in early
2012.
Resource Impact
This recommendation may significantly reduce the cost of operating the City’s fleet.
Policy Implications
This recommendation does not represent a change to existing policy. The City’s Policies and
Procedures 4-1 (Buildings and Equipment) will be revised to reflect the new requirements
imposed by leasing, as well as the reduced replacement intervals for light-duty vehicle classes.
Attachments:
·-a:Fleet Leasing RFP (revised 111811)(PDF)
Prepared By:Keith LaHaie, Fleet Manager
Department Head:J. Michael Sartor, Interim Director
City Manager Approval: ____________________________________
James Keene, City Manager
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1.0 PURPOSE OF THIS RFP
1.1 The City is currently seeking ways to reduce the costs of owning and operating its light-
duty motor vehicle fleet. Methods under consideration include vehicle leasing rather than
outright purchase; outsourcing the maintenance and management of light-duty vehicles,
or a combination thereof.
1.2 Through this RFP, the City will seek proposals for the leasing, maintenance, and
management (as defined in the “Program Scope of Services” section), of up to one
hundred fifty (150) vehicles over a five (5) year period. The City reserves the right to
order any amount of leased vehicles and additional services it deems in the best interest
of the City.
1.3 The Contract that results from this RFP will consist of a one (1) year initial period, with
four optional one (1) year renewal periods. All vehicles ordered under this contract are
expected to remain in use by the City for three (3) to five (5) years. The Contractor’s
responsibilities under this Contract will cease when the last vehicle leased under this
Contract is sold and the end-of-lease balance is reconciled.
1.4 This RFP establishes a general scope and terms of services that should form the basis of
each proposal.
2.0 VEHICLE USAGE
Vehicles leased under this contract will be used by City employees to conduct official City
business. All vehicle operators will be appropriately licensed, with a satisfactory driving record.
Some vehicles leased under this contract will be used by law enforcement personnel; however,
the vehicles will not be used for routine patrols or pursuit duty. Vehicles leased for law
enforcement will be used primarily by investigators and administrative staff.
The City will use and operate, and permit the use and operation of each vehicle in a careful
manner and in compliance with all requirements of any governmental authority having jurisdiction,
as applicable.
The City will maintain responsibility for paying all fines and other liens that might be incurred
against a vehicle leased under this contract, and will hold the Contractor harmless from and
against any and all such fines, assessments, fees, charges, expenses, penalties and forfeitures
incurred in connection with the use of a leased vehicle.
3.0 PROGRAM SCOPE OF SERVICES:
The City requires vehicles on a lease basis satisfying the specifications described in this section
and may potentially require the additional services described in this section on an “as needed”
basis. Proposers are expected to submit proposals that address all portions of this section. If a
Proposer is unable to satisfy every element of this section but chooses to submit a proposal
anyway, it must clearly identify the element(s) it is unable to satisfy and the reason it cannot meet
the requirement. The City will review any exceptions taken but, at its sole discretion, may
determine the proposal not responsive to the City’s requirements and remove it from further
consideration.
3.1 OPTION 1 - Vehicle Leasing:
3.1.1 The City intends to award a multiple-year lease contract that will allow ordering to
occur throughout a one (1) year period with annual renewals for up to four (4)
additional years upon mutual agreement with the successful proposer
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(Contractor) and the City. Vehicles will be ordered via a service order under this
Contract, and at prices applicable to the ordering period current at the time the
purchase is made.
3.1.2 Prices for future ordering periods will be presented to the City by the Contractor
near the beginning of each ordering period. The City will accept or reject future
order period pricing through an amendment to the original Contract. Proposers
will submit pricing for the first ordering period in response to this RFP.
3.1.3 Proposals will include a criteria for determining year-over-year price increases or
decreases, whether a discount from Manufacturer’s Suggested Retail Price
(MSRP), dealer cost plus markup, or pricing indexed to the appropriate Federal
General Services Administration (GSA) Pricing Schedule.
3.2 OPTION 2 – Vehicle Leasing and Maintenance Services:
3.2.1 Leasing vehicles and replacing them on a not to exceed five-year schedule will
reduce the City’s operating costs. Additionally, the City is interested in further
reducing the cost of maintaining its light-duty fleet through the outsourcing of
maintenance services. Proposals for maintenance services will be comprehensive,
and will include all manufacturer-required maintenance, as well as recalls, warranty
and non-warranty repairs. Details and additional requirements are outlined in item
?? below.
3.3 OPTION 3 – Vehicle Leasing, Maintenance Services and Management Services:
3.3.1 The provision of management services will result in the Contractor being
completely responsible for the leased vehicles, with the exception of fueling and
daily inspections. This responsibility will include maintenance scheduling, vehicle
transportation, 24/7 roadside assistance, guaranteed loaner vehicles, and risk
management services.
3.4 Additional Services:
3.4.1 Additional Services may include, but are not limited to:
Short-term vehicle rentals
4.0 DECISION TO AWARD
The City, at its sole discretion, will determine the approach that is most cost effective, and
best meets the needs of the City. The City will either award a single contract to a
provider that can provide all services requested in this proposal; or to multiple vendors
that can demonstrate an effective and efficient partnership pertaining to the delivery of
services under this contract. Lease arrangements with a duration of more than one (1)
year will be subject to availability of appropriations.
5.0 VEHICLE LEASING
5.1 General Requirements:
The City is requiring all Contractors to use the following lease parameters for evaluation
purposes. Upon award, the City will negotiate with the successful Contractor the
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appropriate lease parameters the City deems necessary for each individual vehicle
leased.
5.1.1 The following represents the City’s requirements for a lease:
36, 48 or 60 month Open or Closed-Ended Lease with no mileage
restrictions.
For Open-Ended Leases, Vehicles must be depreciated at 1.5% per
month with a 10% Residual Book Value.
List all other applicable fees and charges.
5.2 Lease Termination:
Contractor must supply End of Term Balance and and Estimated Resale Value within 30
days of the termination of any lease.
5.3 Vehicle Disposal:
Contractor will be responsible for the disposal of all leased vehicles. Vehicles will be sold
within 90 days of consigment to the Contractor. Contractor will supply City with at least
two of the highest bids for the vehicles within 30 days after vehicle is returned by City.
5.4 Reconciliation:
Vehicle sales proceeds received by the Contractor will be used to reconcile the remaining
Reduced Book Value and any other charges remaining on the lease. Any proceeds
remaining after the lease is reconciled will be returned to the City. Any deficits remaining
will be paid by the City.
5.5 Lease Extension:
In the case of 36 and 48-month leases, the City, at its discretion, may desire to extend
the lease term for an additional period of time that mutually agreeable to the City and the
Contractor. In no case will the total lease term exceed 60 months. Requests for
extension of a lease will be submitted 30 days prior to the expiration of lease termination.
Contractor will make adjustments, if any, to the lease payments, and will re-submit the
Reduced Book Value for the end of the new lease term.
5.6 Lease Cost:
Pricing will remain firm for the duration of the contract period and for the length of any
lease entered into during the contract period. The lease payment will include all costs
and fees; all of which will be itemized on the payment invoice.
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6.0 VEHICLE SELECTION
6.1 Vehicles provided under lease will be of the current or upcoming model year, as
determined by the effective date of the lease. The City reserves the right to select
vehicles based on departmental needs and overall cost-effectiveness. Contractor will
offer a minimum number of vehicle selections in each vehicle class, as shown below:
Number of Selections
Vehicle Type/Class Domestic Import
Compact Sedan (conventional) 2 2
Compact Sedan (hybrid) 2 2
Compact Sedan (CNG) 1
Mid-size Sedan (conventional) 3 3
Mid-size Sedan (hybrid) 2 2
Compact Passenger Van 2 2
Compact Cargo Van 2
Full-size Passenger Van (8-Pass, 9,000 GVW) 2
Full-size Cargo Van (9,000 GVW) 2
Compact Pickup Truck 2
Full-size Pickup Truck (6,000 GVW) 2
Full-size Pickup Truck (8,600 GVW) 2
Chassis/Cab (9,000 – 15,000 GVW) 2
The above list is not meant to be all-inclusive. The City reserves the right to select
vehicles not listed above as business needs arise.
7.0 MINIMUM VEHICLE SPECIFICATIONS
All vehicles proposed must include the following features, whether standard or optional:
Air bags (driver, passenger, side curtain)
Air conditioning
AM/FM stereo radio, with auxiliary input
Automatic transmission
Cloth seats (except cargo vans, pickups and chassis/cabs)
Color-keyed carpeting with front and rear floor mats (sedans only)
Intermittent wipers
Power brakes, with anti-lock system
Power door locks
Power steering
Power windows
Rear window defroster
Remote keyless entry (four keyfobs will be provided)
Spare tire with jack
Tilt steering column
Tinted glass
Tire pressure monitoring system (TPMS)
Trailer towing package (pickup trucks only)
All vehicles must meet California emissions standards
Vehicles that include proximity keys and push-button start features
are not acceptable.
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The above requirements represent minimum specifications for the purpose of preparing a
proposal. Additional features and options may be selected at the time of vehicle order.
7.1 Vehicle Color:
The City will be able to select any standard color from the vehicle manufacturer’s
selection at no additional charge.
8.0 VEHICLE MODIFICATIONS AND UPFITTING
8.1 Some of the vehicles ordered through this contract will be modified after delivery. These
modifications will be performed by the City or its Contractors, and will include, but are not
limited to:
The installation of decals and logos
The installation of emergency lighting
The installation of two-way radio equipment and mobile computers
The installation of fuel management hardware and telematics
equipment.
8.2 Proposers will need to disclose:
Any limitations on the installation of aftermarket equipment
The extent of repairs required (if any) after the equipment is removed
8.3 Some of the vehicles (particularly cargo vans and pickup trucks) will be be ordered
already upfitted with custom racks, shelves, bed liners and liftgates. Proposers will need
to disclose:
The process by which upfitting is accomplished
The availability of upfit components and services
Any limitations on upfitting
How the cost of upfitting is determined and incorporated into the
lease payment.
Whether upfit components will need to be removed at the termination
of the lease.
9.0 VEHICLE DELIVERY/TURN-IN
Vehicles ordered under this contract will be delivered within ninety (90) calendar days
after the placement of an order. All vehicles will be delivered complete and ready to
place into service, with the exception of modifications to be performed by the City or its
Contractors. Vehicles will be delivered to:
City of Palo Alto
Attn: Equipment Management
3201 East Bayshore Road
Palo Alto, CA 94303
9.1 Equipment Management will be notified at least 24 hours in advance of each delivery.
9.2 All pre-delivery vehicle servicing will be performed in accordance with recognized
industry standards.
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9.3 Vehicle Turn-In:
Vehicles ready for turn-in will be picked up by the service provider prior to the termination
of the lease. Contractor will provide seven (7) calendar days of advance notice prior to
picking up vehicles.
10.0 VEHICLE DAMAGE
10.1 Definitions:
At a minimum, the following definitions will apply to this contract.
10.1.1 Normal wear and tear is defined as dents, dings, paint chips, or scratches three
inches (3”) or less in size, pitted (but not cracked) windshields, and interior wear
such as soiled carpets and seats normally incurred by a motor vehicle used in
both rural and metropolitan areas over a period of 36 to 60 months. Small chips,
scratches and holes resulting from vehicle upfitting will be considered “normal
wear and tear.”
10.1.2 Excess wear and tear is defined as dents, dings, paint chips, or scratches more
than three inches (3”) in size, cracked or punctured bumpers, chipped or cracked
windshields, interior holes, burns, rips, tears, or stains requiring heavy cleaning
or replacement of fabric, interior damage such as gouged steering wheels or
dashboards, missing equipment, and any exterior or interior damage attributable
to collision, as well as mechanical repairs not covered by the contracted
maintenance program.
10.1.3 A Total Loss Vehicle is defined as a vehicle that the estimated cost to repair the
vehicle is equal to at least 80 percent of the retail market value of the vehicle
prior to the damage as determined by using NADAGuides at
www.nadaguides.com.
10.2 The City, at its discretion, may be willing to incorporate into the contract a more detailed
catalog of damage descriptions and a schedule of damage allowances and charges.
This catalog and the associated schedule(s) should be based on a common industry
standard, such as the “General Motors Daily Rental Guaranteed Residual Program Turn-
In Standards and Procedures.”
10.3 Vehicle Damage Repair Due to Accidents:
10.3.1 If Option 1 (Lease Only) or Option 2 (Lease and Maintenance) is selected by the
City, the City will be responsible for repairing all vehicle damage due to
accidents.
10.3.2 If Option 3 (Full Management) is selected by the City, the Contractor will be
responsible for repairing vehicle accident damage, except in cases where
another party is at fault and has accepted responsibility. The cost of the damage
will be covered by an insurance policy with comprehensive and collision
coverage; the only cost to the City will be for the insurance deductible. In cases
where vehicle damage is caused by another party and that party assumes
responsibility, the Contractor will arrange to have the vehicle repaired and will
seek reimbursement from the other party’s insurance carrier.
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10.4 Vehicle Damage Resulting in a Total Loss Vehicle:
10.4.1 If Option 1 (Lease Only) or Option 2 (Lease and Maintenance) is selected by the
City, the City will be responsible for covering the loss. The Contractor shall
submit an invoice to the City for any vehicle determined to be a Total Loss
Vehicle. The amount of the invoice shall be equal to 80 percent of the retail
market value of the vehicle prior to the damage as determined by use of
NADAGuides at www.nadaguides.com.
In cases where vehicle damage is caused by another party and that party
assumes responsibility, the City will seek reimbursement from the other party’s
insurance carrier.
10.4.2 If Option 3 (Full Management) is selected by the City, the Contractor will be
responsible for covering the loss. The reimbursement the Contractor receives
from insurance payments will satisfy any amount due from the City, and the City
will not be liable to the Contractor for any additional cost as a result of the
damage to the Total Loss Vehicle, other than that of any deductible owed by the
City.
10.4.3 In cases where vehicle damage is caused by another party and that party
assumes responsibility, the Contractor will seek reimbursement from the other
party’s insurance carrier.
10.4.4 In the event that the other party’s insurance company does not accept full
responsibility, the Contractor will be responsible for covering any deficits
remaining, other than that of any deductible owed by the City.
10.5 Vehicle Damage Resulting from Excess Wear and Tear:
(Applies to all Options) - When the City returns a vehicle to the Contractor at the end of
the vehicle’s lease period, an assessment for excess wear and tear shall be made at the
time the vehicle is returned. If excess wear and tear damage exists, the Contractor shall
submit an invoice to the City for the excess wear and tear damage. The invoiced repair
amounts shall be obtained from a reputable industry guide such as the “Mitchell Collision
Estimating and Reference Guide.” Excess wear and tear must be fully documented,
including clear photographic evidence of the damage. For any individual damage
estimate that is greater than $3,000, the Contractor will provide the City with repair
estimates from no less than three (3) repair facilities.
10.6 Stolen Vehicles:
If Option 1 (Lease Only) or Option 2 (Lease and Maintenance) is selected by the City, the
City will be assume responsibility if a vehicle is stolen while in its control. The City will be
liable to pay the Contractor 80 percent of the retail market value of the vehicles as
determined by use of NADA Guides at www.nadaguides.com.
If Option 3 (Full Management) is selected by the City, the Contractor will be responsible
for replacing the vehicle with a equivalent model within 30 days of the initial stolen vehicle
report. The extent of the City’s responsibility in this case will relate to the difference
between the vehicle’s replacement value and the cost of the new vehicles, plus any
deductible owed.
If the vehicle stolen vehicle is recovered subsequent to the delivery of the replacement
vehicle, the City may choose to continue or cancel the lease of the recovered vehicle, at
its discretion.
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11.0 VEHICLE REGISTRATION
With the exception of vehicles leased for law enforcement use, the Contractor will register all
vehicles with the Department of Motor Vehicles. Temporary registration documents will be
installed on each vehicle prior to delivery. EXEMPT license plates and registrations will be
provided within 30 days of delivery. The City’s business address will be shown on all documents:
City of Palo Alto
Attn: Equipment Management
P.O. Box 10250, Palo Alto CA 94303.
In the case of vehicles leased for law enforcement use (typically administrative and investigator
vehicles), the City will be responsible for obtaining confidential registrations.
12.0 MAINTENANCE, WARRANTY AND REPAIR SERVICES
12.1 When Option 1 is selected, the City will be responsible for performing all required
maintenance and repairs, including arranging for warranty and recall repairs.
12.2 When Option 2 is selected, Contractor will perform all manufacturer-required
maintenance (with the exception of the items listed in item below) at manufacturer-
prescribed intervals. Maintenance intervals will be selected to insure the continuation of
warranty coverage. In no case will maintenance intervals will not exceed 5,000 miles or
one (1) year, whichever comes first. The Contractor will be required to monitor vehicle
usage, and will schedule maintenance appointments through Equipment Management.
The City will be responsible for transporting vehicles to and from service providers.
12.2.1 Under this Option, the City will maintain responsibility for maintenance tasks that
would typically be considered the duty of the vehicle operator, such as:
Periodic visual inspections
Fluid level checks
Replenishment of windshield washer fluid
Tire inflation
12.2.2 The maximum allowable round-trip distance to any maintenance service provider
will be 30 miles.
12.2.3 If a vehicle requires repair, but due to time, distance, emergency or other
constraints, the Contractor is unable to perform the repairs; the City reserves the
right to have the repairs performed at a facility of its own choosing at customary
and reasonable rates, and the Contractor will reimburse the City in full for its
cost.
12.3 When Option 3 is selected, Contractor will provide all maintenance sevices required
under Option 2, in addition to:
The scheduling of all maintenance, recalls, warranty work and
repairs, including direct coordination with vehicle users.
Transportation of vehicles to and from service providers
Provision of loaner vehicles when a vehicle is out of service for
repair more than 24 consecutive hours.
24/7 roadside assistance and towing.
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12.4 The City will be responsible for the replacement of any cracked or damaged windshields,
regardless of which Option is chosen.
12.5 Proposals must disclose the process by which loaner vehicles are obtained, and must list
all exclusions or alternatives to the requirements listed above.
12.6 Warranty Coverage:
All vehicles proposed will be covered by a 36-month, 36,000 mile bumper-to-bumper
warranty. Proposers will disclose additionally available bumper-to-bumper coverage in
the proposal. All powertrain warranty coverage will extend for the duration of the lease
period.
12.7 The Contractor will be liable for pursuing claims under the California Song-Beverly
Consumer Warranty Act and the “Lemon Law” provisions contained therein.
12.8 Maintenance Reporting:
12.8.1 When Option 2 or 3 are selected, the Contractor will provide electronic copies of
all maintenance invoices and service reports, so that the City may document
maintenance work and verify that maintenance is being performed in accordance
with Contract requirements.
12.8.2 Additional reporting may be required during the Contract period. Proposers
should disclose details of reports that have proven to be useful to other fleet
clients.
12.8.3 City-Provided Data:
When Option 2 or 3 are selected, the City will provide the Contractor monthly
meter reading reports via electronic format.
13.0 INSURANCE AND ACCIDENT SERVICES:
13.1 Insurance Coverage:
The City is self-insured for liability and loss, and may, at its discretion, purchase
comprehensive and collision coverage for vehicles leased under Option 1 and Option 2.
13.2 Contractor-Provided Comprehensive Coverage for Damage and Loss:
13.2.1 If Option 3 is selected (Full Management), the Contractor will provide an
insurance policy covering the repairs of all damage to any vehicle caused by a
City employee or third party, or the total loss of any vehicle due to theft or
damage. The insurance policy will include a $500 deductible per occurrence.
13.2.2 Proposals will include a full description of the insurance coverage to be provided,
including coverage limits, exclusions, and the cost and availability of optional
coverage items.
13.3 City policy prescribes a process for documenting vehicle accidents and damage;
however, under Option 3, the Contractor will be responsible for all handling administrative
details for all vehicle accident reports, repairs, and insurance processes including, but not
limited to:
Towing arrangements
Car/van rental arrangements
Appraisals and photographs
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Claims recovery assistance
Coordination of subrogation and loss recovery
Third party physical damage claims
Reporting associated with accident, repair, subrogation claims, recoveries
and legal proceedings involving physical damage to the vehicles, and
Accident activity reports
13.4 Within 14 calendar days of a vehicle damage repair, the Contractor will provide a detailed
report an/or invoice copy showing an itemized list of repair tasks performed, and the total
cost of the repair.
14.0 PROJECT ORGANIZATION AND MANAGEMENT
In addition to project staffing requirements outlined previously in this document, the
Contractor will establish and maintain an organizational structure which will allow local
management of this Contract. Documentation supporting the Contractor’s ability to
service the Contract will be included with the proposal.
15.0 INVOICING AND PAYMENTS
15.1 The Contractor will submit invoice(s) monthly; showing payments due for all vehicle(s)
and services provided during the previous month.
15.2 Vehicles that are in the City’s possession for the entire month will be invoiced at the full
monthly amount shown in the Contract. Vehicles that are in the City’s possession for less
than a full month will be invoiced at a pro-rata amount based on the number of days the
vehicle was in the City’s possession. A “month” will be defined as thirty (30) days for the
purposes of this calculation.
15.3 Payments will not accrue until the City accepts delivery of the vehicle, and will cease
upon return of the vehicle to the Contractor.
16.0 QUALITY CONTROL/INSPECTIONS
16.1 It is assumed that the Contractor would desire to inspect vehicles leased under this
Contract on a periodic basis, such as annually. Under Option 1 and Option 2, these
inspections would occur at a mutually agreed-upon interval; preferably by scheduling the
inspections so that a portion of the leased fleet is inspected each quarter, in order to
minimize the impact of coordination and out-of-service time.
16.2 Under Option 3, the Contractor would bear full responsibility for conducting these
inspections, which should occur during routine maintenance servicing.
16.3 Proposers should disclose inspection processes that have proven beneficial in other
contracting efforts.
17.0 DISPUTE RESOLUTION AND MEDIATION
17.1 As disputes may occur over the course of any contract, a mutually-agreed upon dispute
resolution and mediation process will be included in the final contract. Proposers should
disclose the dispute resolution and mediation processes that have proven effective and
beneficial in other contracting efforts.
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18.0 COMMUNICATIONS
18.1 It is assumed that the Contractor will be in communication with staff from Equipment
Management (and other City departments, if Option 3 is selected) on a continuous basis,
via e-mail or telephone. However, it may be beneficial for the City and Contractor to
communicate more formally, such as through regular meetings, conducted on a mutually-
agreed upon schedule. The purpose of these meetings would be to review progress on
the contract, discuss areas of improvement, and plan for upcoming acquisitions and
disposals.
18.2 Proposers should disclose the communications practices that have proven beneficial in
other contracting efforts.
EVALUATION AND SELECTION FACTORS
Selection of vehicles proposed and conformance to specifications
Quality of services offered
Past performance
Cost-effectiveness
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