BRIEFING PAPER

FIVE YEAR ARTICULATED BUS SUPPLY CONTRACT[1]

Metro is entering a 5-year contract to purchase up to 500 articulated buses covering replacement and growth needs. This includes buses for Transit Now and Rapid Ride BRT. It also includes options for an additional 200 units if needed. This is the largest articulated bus order ever placed in North American bus history. A majority of the buses, but not all, will be hybrid-electric drive.

This contract is referred to as a Five-Year ID/IQ contract for buses.

  • ID = indefinite delivery dates
  • IQ = indefinite quantity

The Federal Transit Administration[2] encourages this type of contracting for rolling stock.

Indefinite Delivery: during the five year window of the agreement KCM can order buses for deliveries that fall beyond five years.

  • In determining the requirement for vehicles, the FTA looks at the date a vehicle is needed and then backs out the delivery lead-time.
  • If, after backing out the vendor’s delivery lead-time, the order placement date falls inside the five-year window, then those vehicles can be ordered under this agreement.

Indefinite Quantity: there is no limit to quantity in the contract.

  • KCM has provided the vendor with a low-end number based on the most current planning estimate from the long-range fleet plan.
  • 360 units is the low-end number.
  • Low-end numbers did not assume Transit Now (100) or Viaduct mitigation (75).
  • 500 units is a realistic upper-end number.

Pricing of Vehicles in Future Years

  • Pricing is based on our initial order of 20 buses.
  • Vendors are protected with price escalation language for all orders in future years using the Producer Price Index.
  • Each future order stands “on its own” and is subject to a rigorous Cost & Price analysis and a Market Analysis to determine the price offered is the most advantageous to the County.
  • The FTA regulates fair pricing and compliance.

Termination for Convenience

  • FTA funded bus procurements contain a “termination for convenience” clause.
  • KCM can terminate the contract at any time without cause.
  • County’s obligation is to pay the vendor only for costs incurred for buses delivered and work in process.

[1] Prepared by Jim Boon, April 26, 2007

[2] Refer to FTA Circular 4220 Procurement Bible for Grant Recipients