CONSTRUCTION COMMITTEE

FEBRUARY 20, 2002

PROJECT:      VEHICLE ACQUISITION PROJECT

CONTRACT:   EO350, PROFESSIONAL SERVICES

ADMINISTRATION/MANAGEMENT IN SUPPORT

OF CONTRACT NO. P2000 (LACAR)

LTK ENGINEERING SERVICES

ACTION:           CONTRACT MODIFICATION IN THE AMOUNT OF $300,000 AND AN INCREASE IN THE AUTHORIZATION FOR EXPENDITURE IN THE AMOUNT OF $300,000

RECOMMENDATION

A.   Authorize the Chief Executive Officer to negotiate and execute Change Order No. 7.00 to Contract No. E0350, Professional Services Administration Management in Support of Contract No. P2000, Los Angeles Standard Car, with LTK Engineering Services (LTK) to extend the contract for an additional four (4) months commencing January 1, 2002 through April 30, 2002 to provide continuing administration, design review and testing services for the P2000 vehicles, in the amount of $300,000, increasing the Total Contract Value from $13,808,735 to $14,108,735; and

B.         Approve an increase in the Authorization for Expenditure (AFE) to Contract No. EO350, to provide funding to extend the contract for the additional four (4) months, in the amount of $300,000, increasing the current EO350 contract AFE amount from $13,808,735 to $14,108,735.

Within Construction Committee authority:  Yes        No        N/A

BACKGROUND

On July 28, 1993, the Metro Board awarded Contract No. EO350 to LTK.  The scope of work consisted of administration, design review, testing, and inspection services for the P2000 contract with Siemens Transportation Systems, Inc. (Siemens) for the design, manufacture, and delivery of Light Rail Vehicles.  The Contract was issued to LTK in June 1994, in the amount of $6,512,994 for four (4) years.  It was revised in June 1995, to increase the value by $4,918,147 to $11,431,141 and extend the period of performance for an additional two (2) years.  Prior to this request, the contract was last increased in June 2000 by the Board, by $2,377,594 to $13,808,735, which extended the period of performance through December 31, 2001.  This contract is a locally funded contract and therefore is not subject to the Federal guidelines limiting a contract to five years.

The P2000 contract with Siemens for the delivery of 52 Light Rail Vehicles is over three (3) years behind schedule.  The vehicles were scheduled to be delivered at a rate of two (2) per month, starting in October 1996 and completed in October 1998.  However, as of December 31, 2001, only 26 vehicles have been delivered and conditionally accepted. 

LTK has continued to administer the Siemens activities during Siemens schedule delays.  For the past 1 1/2 years, Siemens’ activity has required constant active oversight on a daily basis to assure that the vehicles adhered to the specifications and were suitable for revenue service.  Delivery by Siemens and acceptance by the Metro continue to be critical, due to the need to make them available for service on the Pasadena Gold Line.

Current scheduling projections indicate P2000 completion to occur approximately December 2002, with contract closeout extending through September 2003.  A normal response would be to extend LTK’s contract to cover the required services.  Recently, however, as an offshoot of the planning for the new upcoming P2550 car procurement, the Metro has considered performing some of the tasks normally provided by the LTK consultant.  In addition, new Metro management has expressed a desire to reduce costs and reliance on consultants.  Since our major goal of placing 26 of the P2000 cars into revenue service has been accomplished, it appeared that this might be a good point in time to implement that concept.  However, identifying those tasks to be performed by the Metro took longer than anticipated.

Several discussions were held with LTK and internally, to arrive at a mutually agreeable Statement of Work.  In addition, LTK’s overall effort was re-assessed and reduced.  As a result, the LTK proposal originally estimated at $2,934,611, was reduced by more than 50%.

Meanwhile, LTK has informed us that they will exhaust their current funding shortly.  Board authorization is required to extend LTK’s contract through April 30, 2002.  This will allow Metro the required time to finalize the scope of work and complete negotiations for the reduction of LTK’s current level of effort. 

FINANCIAL IMPACT

Original Contract Award       $6,512,994

Current Cumulative Contract Value    $13,808,735

                     This Action             $300,000

New Cumulative contract Value    $14,108,735

Funds for this action are included in the 800150 LA Rail Car project budget.  The amount required for these services during Fiscal Year 2002 is included in the FY02 budget.  This recommended action will increase the EO350 contract value of $13,808,735 by $300,000 to $14,108,735, and this action does not impact the Fiscal Year Budget or the Sources of Funds, either in the fiscal year or over the life of the project.

Potential for Cost Recovery:   Yes          No         N/A

*Costs may be recoverable under provisions of the Siemens’ Contract No. P2000 if it is determined that this delay is because all or in part to the actions or inactions of Siemens.

ALTERNATIVES CONSIDERED

The Metro Board may reject this change and the request for an AFE increase, rebid the balance of technical services required to manage the P2000 contract, or perform this work with Metro personnel.

Re-bidding the P2000 car consultant contract will incur additional administrative costs.  This will result in service disruption because the solicitation process for a new contract cannot be completed before the current authorized funding is expected to be expended.  In fact, the re-bidding process would take an estimated 5-6 months, during which time, the Metro would have to oversee/administer Siemens’ activities.  Transition from LTK to the Metro or another consultant, would impact Siemens’ progress on the P2000 contract and potentially be a basis for a delay claim.

Performing the work in-house would require hiring permanent staff with the expertise to perform the services currently being provided by LTK. Not approving this change will impact critical work overseeing the vehicle contract because of the time required to hire permanent staff, the learning curve, and the time to train new staff.  Additionally, if the administrative, design review, testing, and technical services provided by LTK should cease, the Metro does not have the required technical skills on staff to provide the required oversight.  Staff does not recommend these alternatives.

ATTACHMENTS

Attachment 1:      Contract Value Status Summary

Attachment A:     Procurement Summary

Attachment A-1:   Procurement History

Attachment A-2:   List of Subcontractors

Prepared By:   Nick Brown, Director System Engineering

                       Tom Butler, Contract Administrator

___________________________

Dennis S. Mori

Interim Executive Officer, Construction

____________________________

Roger Snoble

Chief Executive Officer