CONSTRUCTION COMMITTEE

CONSTRUCTION COMMITTEE

APRIL 17, 2002

PROJECT: VEHICLE ACQUISITION PROJECT

CONTRACT: E0350, PROFESSIONAL SERVICES

ADMINISTRATION/MANAGEMENT IN SUPPORT OF

CONTRACT NO. P2000 LTK ENGINEERING SERVICES

ACTION: CONTRACT MODIFICATION IN THE AMOUNT

OF $1,033,129 AND AN INCREASE IN THE

AUTHORIZATION FOR EXPENDITURE IN THE

AMOUNT OF $1,033,129

RECOMMENDATION

A. Authorize the Chief Executive Officer to execute Change Order No. 8.00 to Contract No. E0350, Professional Services Administration/ Management in Support of Contract No. P2000, Los Angeles Standard Light Rail Vehicle, with LTK Engineering Services (LTK) to extend the contract for an additional seventeen months through September 30, 2003, to provide continuing administration, design review and testing services for the P2000 vehicles, in the increased amount of $1,033,129, increasing the Total Contract Value from $14,136,766 to $15,169,895; and

B. Approve an increase in the Authorization for Expenditure (AFE) to Contract No. E0350, to provide funding to extend the contract for the additional seventeen months, in the amount of $1,033,129 increasing the current E0350 contract AFE amount from $14,136,766 to $15,169,895

Within Construction Committee authority: Yes No N/A

BACKGROUND

On July 28, 1993, the Metro Board awarded Contract No. E0350 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 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 years. Subsequently, the contract value was 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.

Several months before the December 31, 2001 expiration date, LTK submitted a cost proposal for the continued oversight of Siemens through September 30, 2003. A normal response would have been 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 car consultants. 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. Identifying tasks to be performed by the Metro took longer than anticipated, however, 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%.

To allow Staff additional time to finalize the revised scope of work and complete negotiations, the Board approved a funding increase of $300,0000 and a time extension from December 31, 2001 to April 30, 2002, at the February Board meeting. Final negotiations with LTK for the reduced scope of work were completed in March 26, 2002.

The funding of $125,000 for this service is included in the FY 02 budget in cost center 8510, Construction Contracts under Project 800150, LA Rail Car. Since this is a multi-year contract, the cost center manager and Executive Officer will be accountable for budgeting the cost in future years, including any option exercised. In FY 01, $1,688,873 have been expended on the line item. In FY 02 July 1, 2001 through February 28, 2002, $1,464,024 have been expended on this line item.

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

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.