Memorandum

City of Lawrence

City Manager’s Office

TO:	Tom Markus, City Manager
FROM:	Robert A. Nugent, Transit Administrator
CC:	Diane Stoddard, Assistant City Manager Casey Toomay, Assistant City Manager Brandon McGuire, Assistant to the City Manager
DATE:	October 25, 2018 (updated 11-5-18)
RE:	RFP #R1813 – Contracted Transportation Services for City of Lawrence and University of Kansas

BACKGROUND INFORMATION:

The City is currently under contract with MV Transportation, Inc. to provide services that include both the operation of public transit service and the maintenance of vehicles in support of the service. Likewise, the University of Kansas is also currently under contract with MV Transportation, Inc. to provide similar services. Both the City and University contracts began January 1, 2014 and will expire on December 31, 2018. Due to Federal funding requirements for this type of service a competitive procurement process is required on a regular basis.

Due to these requirements and the success of our coordination efforts, the City and University, once again, utilized a joint procurement process seeking a third party contractor to provide these services that will begin on January 1, 2019 and expire on December 31, 2023.

In order to develop an RFP for the future contract, staff from the City and University worked together over the last year. This was necessary in order to develop a Scope of Work that fully addressed the complexities of the services provided and the differences due to Federal and State regulatory requirements. A concise coordinated RFP (#R1813) was issued in July 2018 and companies were solicited nationwide to submit a proposal.

Two companies participated in the mandatory pre-proposal conference, held in late July 2018. Both companies submitted proposals, one by MV Transportation, Inc. (current transportation service provider for the City and University) and another by First Transit, Inc.

A Procurement Negotiating Committee (PNC) representing both the City of Lawrence and University of Kansas evaluated the proposals. In all, five key areas were considered by the PNC. These areas, listed in order of their importance, included the following:

Cost (30%)

· Monthly recurring rate (fixed rate)

· Service hour rate (variable rate)

· Technology rate

Quality of Proposal (25%)

Level and understanding of the requirements
Deliverables and technical approach
Description and explanation of the services that will be provided
Control procedures, reporting methods, customer service and follow up
Clarity of document

Quality of Proposed Personnel (25%)

· Relative experience of proposed management staff

· Qualifications of proposed management staff

Commensurate Experience (10%)

· Comparable projects within the company

· Demonstrated quality of performance with other contracts

· Years of experience in the industry

· References

Company Resources and Support (10%)

· Corporate experience and expertise in various operational elements

· Availability of resources to support local operations

MV Transportation’s cost proposal was less than First Transit; however, the PNC scored First Transit higher on the remaining four evaluation elements. The PNC unanimously recommends that First Transit, Inc. be the contracted transportation service provider to operate City and University transit services for the next five years beginning January 1, 2019 and expiring December 31, 2023. On October 17, 2018, a notice was sent to MV and First Transit regarding the PNC’s recommendations.

First Transit’s proposed rates for this contract are as follows:

Contract Period	Rate Per Revenue Hour (Variable)	Rate Per Service Month (Fixed)	Rate Per Month (Technology)
01/01/2019 to 12/31/2019	$41.06	$123,418.62	$22,522.55
01/01/2020 to 12/31/2020	$42.68	$126,186.48	$22,522.55
01/01/2021 to 12/31/2021	$42.93	$128,612.22	$22,522.55
01/01/2022 to 12/31/2022	$44.35	$131,561.94	$22,522.55
01/01/2023 to 12/31/2023	$46.00	$134,648.11	$22,522.55

A side-by-side comparison of each candidate’s cost proposals is not practical due to the complex variables in the cost proposals and the fact that the final contracted costs are negotiated. The cost proposals submitted in the candidates’ response to the RFP provide a starting place for city staff and the selected contractor to negotiate the final rates. The negotiated rates reached with First Transit are market competitive and manageable within the Transit Fund five-year financial forecast.

It is the intention of First Transit to provide employment to as many current MV employees as is willing to make the transition. To accomplish this and to aid the transition First Transit, Inc. has already started working with City and University to provide information to current MV Transportation employees about future employment with First Transit. As of October 30^th, approximately 60% of the current employees have submitted applications to First Transit. If this contract is approved, First Transit staff will begin an accelerated on-site hiring process.

If approved the City and University will negotiate separate contracts with First Transit, Inc. The City contract will incorporate by reference the RFP, the proposal and addenda.

Note:

Due to the age of the devices currently being used to provide real time information, all hardware on the entire transit City fleet must be replaced. This change is necessary in order to continue providing this critical amenity to our patrons regardless of the contracted provider. With the upcoming purchase of this hardware, the City and University will own the hardware and will not have to depend on a contractor to provide the hardware. The cost of this upgrade is anticipated to be $135,000.

RECOMMENDATION:

Staff believes that First Transit, Inc. best meets the City’s public transportation needs based on the evaluation of the PNC and criteria outlined in RFP R1813.

REQUESTED ACTION:

Concur with staff recommendation regarding the selection of First Transit, Inc. as the vendor for contracted transportation services beginning January 1, 2019 and authorize the City Manager to proceed with negotiations in support of this contract.