Staff Summary for CR Services (v15)

8/9/2019 Staff Summary for CR Services (v15)

1/12

Staff Summary SheetBoard of Directors Meeting

TO FOR FROM:

1 GM Approva Dept!: MBTA Rai road Operations

"resenter: Bever y A! Scott# "h!D!$%t: &1'()))(*1+&

Signature

) BD,ote Su-.ect: "rocurement of /ommuter Rai Services 0RF" o! 123(1)4

Date: 5anuary 6# )+178nfo

8mp ications: 0The imp ications chec9ed -e o are invo ved in this action# are discussed -e o or in a separate enc osure# andhave -een considered in the fina recommendation!4

_____ /apita Budget ;%;; Operating Budget ;;; Transit Administrator to e%ecute the /ommuter RaiOperating Agreement# /ontract o! 123(1) -et een the Massachusetts Bay Transportation Authority 0the?MBTA?4 and @eo is /ommuter Services#


2/12


3/12

- -S aff Su!!ary Su"#$% & Pro%ur$!$n of Co!!u $r Ra'( S$r)'%$*

On No)$!"$r 22 #201 # the "roposers su-mitted their Best and Fina Offers!

I6 ! 7ABOR PRO6ISIONS AND 8ORK/ORCE PROTECTION

The a-or and emp oyment re uirements inc uded in the ne contract ere mode ed on the transition process used in )++* hen MB/R too9 over from Amtra9# and ref ect input from unions representing thecommuter rai or9force! As high ighted a-ove# the MBTA and its counse met ith rai unionrepresentatives prior to the issuance of the fina RF" to discuss a-or protections! The RF" mandates thatthe operator hire the current or9force in seniority order and that the e%isting co ective -argainingagreements remain in effect unti ne a-or agreements are negotiated!

Ender any su-se uent agreement# the operator sha # at a minimum# provide core terms of emp oymenthich re uire the operator to provide hea th and e fare -enefits that are su-stantia y e uiva ent to those

under current p ans# recogni=e seniority rights# provide continued coverage under the rai road retirementand unemp oyment system# provide vacation in accordance ith years of service in addition to accruedvacation# and provide fami y# mi itary and -ereavement eave and esta- ished ho idays!

6 ! CONTRACT EN9ANCEMENT SUMMAR:

The RF" as deve oped -ased on the MBTA s mar9et revie # its past e%perience# essons earned andindustry -est practices! 8mprovements to the e%isting contract ere made in the RF" to provide anenhanced customer e%perience# more effective management and greater operator accounta-i ity!/ustomer -enefits f o ing from the ne contract provisions i -e rea i=ed in a num-er of 9ey areasinc uding# -ut not imited to# on(time performance 0?OT"?4# vehic e re ia-i ity# c ean iness# fare co ectionand communications!

The ne contract sets the e%pectation that the operator i run trains on time ith more strin'ent performance criteria and no automatic relief ! For e%amp e# the current contract automatica y grantsoperator re ief from the OT" re uirements under the fo o ing circumstances: overcro ding on

p atforms# s ippery rai conditions caused -y eaves fa ing on the rai and disa- ed freight trains! Thene contract removes this entire ist of e%cused events# and re ief is never automatic! 8f the operator

-e ieves that an event is -eyond its contro # it must app y for re ief from the MBTA and providesupporting documentation! The MBTA# ho ever# retains the so e discretion to grant or deny re uestedre ief in each and every instance!

The ne contract does not include ANY incentive payments and# if performance standards are not met#imposes financia disincentives 0i!e!# performance fai ure payments4 on the operator! The e%istingcontract imited financia pena ties to *#+++#+++ per year! Ender the ne contract# the cei ing on

performance fai ure payments is fi%ed at '2I of the operator s profit during the first year and 3+I of theoperator s profit in su-se uent years 0ca cu ated using an assumed rate of profit of 2I4! "erformance

fai ure payments# for e%amp e# i -e imposed for ate or cance ed trains J the operator may incur a performance fai ure payment ranging from )2+ to 2#+++ per train -ased on ateness! 8n tota # the cei ing

i e%ceed 1)#+++#+++ per year under the ne contract! The ne contract places additional emphasis on vehicle station cleanliness and passen'er comfort ! Forthe first time# 2+I of the amount of financia disincentives that the operator i -e su-.ect to under thene contract i -e tied to e ements of customer satisfaction other than OT"# such as c ean iness# heatingand air conditioning# maintaining staffing eve s and customer communications!


4/12

- 3 -S aff Su!!ary Su"#$% & Pro%ur$!$n of Co!!u $r Ra'( S$r)'%$*

Other significant changes to the ne contract that provide for 'reater mana'ement control and operatoraccountability inc ude:

Maintenance provisions have -een strengthened to re uire the operator to adhere to a strict lifecyclemaintenance schedule ! The ne contract a so increases daily inspection requirements for ro ingstoc9! 8n com-ination# these enhancements are intended to improve f eet re ia-i ity and# u timate y#OT"!

The ne contract provides specific instructions on the operator s o- igations in the event of servicedisruptions inc uding: adding staff# prompt y notifying customers and the MBTA a-out the nature ande%tent of the impact on service# as e as providing a ternate transportation as necessary!

The ne contract inc udes provisions that emphasi5e environmental sustainability # ith specifico-.ectives to improve fue efficiency# reduce ater consumption# perform energy efficiency upgrades#and imp ement more stringent $nvironmenta Management System practices!

The ne contract a o s the MBTA to respond to technolo'ical advances and future innovations !The ne contract inc udes a detai ed process through hich the operator may propose amendments tothe agreement re ative to introducing innovations# cost(savings or efficiencies! /ost savings resu tingfrom those operator s suggestions that the MBTA accepts i resu t in a &+H7+ a ocation favora- e tothe MBTA! This cost sharing mechanism encourages operator innovation hi e ensuring that the

pu- ic -enefits!

The ne contract a o s the MBTA to re uire the operator to imp ement a remedial action plan if its performance fai s to meet e%pectations!

The ne contract a o s the MBTA to remove services from the contract 0e!g!# sno remova 4 as aconse uence of poor operator performance!

6I ! E6A7UATION

The "roposa s ere su-mitted on August 3# )+1* in separate parts: 0i4 the Operations and Management"roposa # and 0ii4 the Financia H"rice "roposa !

The MBTA esta- ished a comprehensive procurement eva uation process hich as approved -y theGenera Manager! The Genera Manager appointed the $va uation Organi=ation# made up of theSe ection /ommittee and supporting $va uation Teams! The Selection Committee consisted of: 0i45onathan R! Davis# Deputy Genera Manager and /hief Financia Officer 0ii4 Sean M! Mc/arthy# /hiefOperating Officer and 0iii4 Theodore 5! Basta 5r!# /hief of Strategic Business 8nitiatives! A mem-ers ofthe $va uation Organi=ation ere -ound -y strict confidentiality obli'ations and su-mitted conflicts of

interest forms!

The Se ection /ommittee eva uated a $va uation Factors set out in the Operations and Management"roposa 0detai ed -e o 4! The Se ection /ommittee eva uated each $va uation Factor set forth in theRF" as e as the overa Operations and Management "roposa ! After comp eting the Operations andManagement "roposa eva uation# the Se ection /ommittee eva uated the Financia H"rice "roposa s! TheSe ection /ommittee as supported -y $va uation Teams 0i!e!# su-.ect matter e%perts4 throughout theeva uation process! "ursuant to the RF"# hen determining -est va ue# the Operations and Management"roposa as given greater emphasis than the Financia H"rice "roposa ! $va uation of the Operations andManagement "roposa too9 p ace at a secure offsite ocation# and the Financia H"rice "roposa eva uationtoo9 p ace at the a offices of Ko and > @night


5/12


6II ! OPERATIONS AND MANAGEMENT PROPOSA7

The Operations and Management "roposa inc uded the fo o ing e even proposa areas# ca ed? &valuation 2actors #? hich ere eighted in the fo o ing order of importance:

1! Safety

)! Security# $mergency "reparedness and$mergency Response

*! Mechanica Services

7! $ngineering Services

2! Transportation Services

&! /ustomer Service

'! Management

6! 8nformation Techno ogy

3! Disadvantaged Business $nterprises

1+! $ ua $mp oyment Opportunity andother /ivi Rights "rograms

11! Mo-i i=ation

1)!

1*! Fo o ing FTA -est practices# the MBTA imp emented an ad.ectiva rating system using thefo o ing ratings: 0i4 $%ceptiona 0ii4 Good 0iii4 Accepta- e 0iv4 "otentia to BecomeAccepta- e and 0v4 Enaccepta- e! The Se ection /ommittee s consensus ratings for each$va uation Factor ere as fo o s:

17!15;/ 1+; E)a(ua 'on /a% or

1 Other /iviRights "rograms 2'! Accepta- e 26! Accepta- e

23!11 &+! Mo-i i=ation &1! Accepta- e &)! Accepta- e


6/12

- + -S aff Su!!ary Su"#$% & Pro%ur$!$n of Co!!u $r Ra'( S$r)'%$*

15;/ 1+; E)a(ua 'on /a% or

1 ! /INANCIA7=PRICE ANA7:SIS62!


7/12

- < -S aff Su!!ary Su"#$% & Pro%ur$!$n of Co!!u $r Ra'( S$r)'%$*

6&! Both "roposa s ere found to -e responsi- e# reasona- e and -a anced! Keolis* #roposal,however, included a lower overall cost for both the base term (appro;7


8/12

AgreementLear @eo is MB/R Difference I Diff!

Lear 1 *+7#1&&') **+#'12#616 )#17& 6!'ILear ) *13#'1+#')+ *7+#)&'#323 )+#22'#)*3 &!7ILear * *)'#+)*#13* *73#37)#2*) ))#313#**3 '!+ILear 7 **)#'&)#&'' *26#6)3#+32 )+& '!6ILear 2 **3#2''#))6 *&2#6*'#2+3 ))&+#)61 '!'ILear & *7'#7+3#+*1 *')#)66#&+3 )7#6'3#2'6 '!)ILear ' *27#1'3#*&3 *'2#*+)#&32 )1#1)*#*)& &!+ILear 6 *&1#212#7+7 *''#76'#11+ 12#3'1#'+& 7!7ILear 3 *'*#&26#*13 *3+#162#*&1 1)'#+7) 7!7ILear 1+ *6))*#77* 7+*#*)2#1*+ 1'#1+1#&6' 7!7ILear 11 *33#))2#72& 71)1#'&3 1'#&3*1* 7!7ILear 1) 71)#&'3#22+ 7*+#331#1&7 16#*11#&17 7!7I

3#25 #1 1#0+2 3#512 #0 3#


9/12

AgreementLear 8/$ @eo is Difference I Diff!

Lear 1 *1*#7+2#7++ *+7#1&&') 0 3#)*6#')64 ()!3ILear ) *12#))2#22' *13#'1+#')+ 7#762#1&* 1!7ILear * *)+#31)#277 *)'#+)*#13* +#&73 1!3ILear 7 **1#12)& **)#'&)#&'' 1#&+)21 +!2ILear 2 *71#'22#7&* **3#2''#))6 0 )#1'6#)*24 (+!&ILear & *2)#&2*#'+3 *7'#7+3#+*1 0 2#)77#&'64 (1!2ILear ' *&7#+6&7 *27#1'3#*&3 0 3#3+'#2324 ()!'ILear 6 *'2#6+&7* *&1#212#7+7 0 17#)31#)*34 (*!6ILear 3 *66#77&7 *'*#&26#*13 0 17#'66#1724 (*!6ILear 1+ 7+1#2)2#'') *6))*#77* 0 12#*+)#*)34 (*!6ILear 11 712#+23#676 *33#))2#72& 0 12#6*7#*3)4 (*!6ILear 1) 7)3#+&7#2+* 71)#&'3#22+ 0 1*67#32*4 (*!6I

3# 3 #0 #2 3#25 #1 1#0+2 ? 0# + #2 1@ -2!1

BAFO "rice /omparison

BAFO "rice /omparison ( @eo is v! 8/$Annua and Tota 1)(Lear /ontract /ost# 8nc uding A o ances

0 omina Do ars4

- -S aff Su!!ary Su"#$% & Pro%ur$!$n of Co!!u $r Ra'( S$r)'%$*

172!

17&!17'! On average# @eo is price is a-out '!& mi ion 0)!1I4 per year ess than the 8/$! 8n Lear

1# @eo is price is appro%imate y )!3I ess than the 8/$! This is lar'ely due to the fact that Keolis* cost proposal includes a profit of 5ero dollars for the first contract year !

176!173! As part of the costHpricing ana ysis# the Financia H"rice "roposa s ere revie ed to

identify areas of significant variance -et een the t o "roposers! The most significant variance -et een the t o "roposers 6(year -ase contract period operations and management cost as inthe 4dministration = cost cate'ory # ith MB/R s cost -eing appro%imate y 16&!) mi ion 0or

33!2I4 higher than @eo is AdministrationHKR cost category! The difference in the "roposersheadcount in the AdministrationHKR cost category# ho ever# as on y one position 011) versus11* positions4!

12+!121! The difference -et een the @eo is and MB/R Financia H"rice "roposa s for the 6(year

-ase contract in the area of profit as significant y different J ith the @eo is Financia H"rice"roposa appro%imate y 2'!& mi ion 0or ''I4 o er than MB/R s profit margin!

12)!15 ; >I ! E UA7 EMP7O:MENT OPPORTUNIT: AND DISAD6ANTAGED BUSINESS

ENTERPRISE PARTICIPATION127!122! @eo is $ ua $mp oyment Opportunity 0?$$O?4 and Disadvantaged Business $nterprise

0?DB$?4 p ans comp ied ith the RF"# and ere -oth rated 4cceptable by the SelectionCommittee !12&!12'! The DB$ participation goa for the RF" as esta- ished at 12I of the do ar va ue of the

su-contracta- e e ements! @eo is committed to an 1'!+I participation eve # and identified sevenDB$ firms# each head uartered in Massachusetts! The DB$ or9 to -e performed tota sappro%imate y *+ mi ion for the first three fu years of the ne contract! @eo is has a so

proposed to partner ith a DB$ firm to provide technica assistance to interested DB$s and tounderta9e further outreach efforts!

126!


10/12


123! The MBTA and its commuter rai operator 0and su-contractors4 are re uired to comp yith e%tensive federa and state nondiscrimination and civi rights o- igations covering $$O#

DB$ participation and other /ivi Rights a s and regu ations# inc uding the Americans ithDisa-i ities Act# Tit e ,8 and $nvironmenta 5ustice! These provisions address 9ey areasinc uding# -ut not imited to# emp oyment# promotion# demotion or transfer# recruitment orrecruitment advertising# ayoff or termination# rates of pay or other forms of compensation andse ection for training# inc uding apprenticeships# in addition to the MBTA s o n civi rights

po icies and programs that re uire nondiscrimination in a aspects of emp oyment# servicede ivery and contracting opportunities!

1&+!1&1! Additiona y# the MBTA s Dignity in the or9p ace "o icy demands# of itse f and its

contractors# that a or9 and or9(re ated activities -e conducted ith comp ete respect for thedignity of a emp oyees regard ess of race# se%# age# re igion# creed# co or# se%ua orientation#nationa origin# disa-i ity# ancestry or ,ietnam era veteran s status! These prohi-itions onharassment and discrimination are a-so ute ith respect to the operation of the MBTA scommuter rai service!

1&)! The operator is a so re uired to inc ude these re uirements in agreements ith each of itssu-contractors!

1&*!1&7! Any Operator fai ure to enforce these prohi-itions on harassment and discrimination

ou d su-.ect the Operator to serious conse uences under the contract# under state a # and under federa regu ation!

1+5;1++; >II ! /INANCIA7 IMPACT1&'!1&6! /osts for the ne contract i -e funded from the MBTA s annua Operating Budget!

@eo is Financia H"rice "roposa offers the o er cost for the eight(year contract period as e asfor a t e ve years! @eo is t e ve(year BAFO price is appro%imate y )27 mi ion ess thanMB/R s# and its eight(year BAFO price is appro%imate y 167 mi ion ess than MB/R s!

1&3!1'+! @eo is firm fi%ed price for year one of the ne contract is appro%imate y &!' mi ion

ess than the current commuter rai Budget for FL )+17# and appro%imate y 12!1 mi ion o erthan the pro.ected FL )+12 Budget!

1'1!1III ! RECOMMENDATION1< ;1'7! :he overall consensus ratin' of the Selection Committee for Keolis* %perations and

ana'ement #roposal of 8ood is hi'her than the 4cceptable ratin' assi'ned to !C ! Keolis* final 2inancial #rice #roposal (./ years, in nominal dollars) is appro;imately


11/12


)+17! Any de ay in initiating mo-i i=ation activities cou d adverse y impact the provision ofcommuter rai services!

1''!1'6! Shou d the Genera Manager determine to e%ercise any option to e%tend the term of the

contract -eyond the 6(year -ase period# the Genera Manager i notify the Board of Directorsand see9 approva !

1'3!1 0; >I6 ! COORDINATION1 1;16)! Bever y A! Scott# "h!D! J MBTA Genera Manager and Rai and Transit Administrator 16*! 5onathan R! Davis J Deputy Genera Manager and /hief Financia Officer 167! Sean M! Mc/arthy J /hief Operating Officer 162! Theodore 5! Basta# 5r! J /hief of Strategic Business 8nitiatives16&! Stephanie ea 5ohnson J MassDOT Endersecretary and Acting /hief of Diversity and

/ivi Rights

16'! Brad ey M! @es er J Senior Director of Rai > ater Transportation166! "aige A! Scott Reed J MassDOT and MBTA Genera /ounse163!13+! >6 ! ATTAC9MENTS131! Recommended ,ote


12/12


1 2; R$%o!!$n4$4 6o $1 ; January # 2013

1 3;132!13&! ,oted: To authori=e the MBTA Genera Manager and Rai > Transit Administrator to

e%ecute /ommuter Rai Operating Agreement# /ontract o! 123(1) Bet een Massachusetts BayTransportation Authority 0?MBTA?4 and @eo is /ommuter Services#

Documents

Staff Summary for CR Services (v15)