AGENDA ITEM 10-B
INFORMATION ITEM
TO:
CHAIRMAN MILDE AND THE VRE OPERATIONS BOARD
FROM:
DALE ZEHNER
DATE:
SEPTEMBER 17, 2010
RE:
INITIATION OF NEW PASSENGER CAR PROCUREMENT
In April of 2004, the Operations Board authorized the issuance of an RFP for the
procurement of 11 bi-level cab cars with an option for an additional 50 bi-level
railcars. In October 2004, Sumitomo Corporation of North America was awarded
the contract and in March 2005, the Operations Board exercised the option for the
full 50 railcars. All 61 cars were delivered by September 2008.
In March 2008, the Operations Board authorized the issuance of an RFP for the
procurement of ten additional bi-level railcars. Sumitomo Corporation of North
America was the sole bidder and was awarded the contract in October 2008. The
ten railcars were delivered in February 2010.
Currently, VRE’s railcar fleet includes 71 bi-level Gallery railcars, as noted above,
and 30 Pullman Gallery railcars. The Pullman railcars were previously operated
by Chicago-Metra and were built between 1956 and 1969. VRE planned to
operate the Pullman railcars through CY 2011 without performing a major
overhaul. However, through aggressive preventative maintenance, VRE projects
this timeline can be extended to no later than the end of CY 2013. As such, with
an expected delivery time of two years, a procurement for new railcars must be
initiated at this time.
At the time of the original new railcar procurement in 2004, VRE’s fleet
management plan required 77 railcars for daily service, including spares. By
2010, this requirement increased to 91 cars, including spares. If new railcars
were ordered, the fleet requirement would drop to 85 units, including spares, due
to a lower spare ratio requirement with new equipment. However, if the new train
proposed in the six-year plan were to be added, the requirement would again
increase to 91 units. The projected number of passenger cars required for daily
VRE service by 2020 is expected to reach 120 units, including spares.
Given funding challenges, a procurement could be developed to procure five
railcars, with an option for 45 additional units over a five year contract term.
Assuming no additional service, the first 15 would replace the Pullman railcars
currently in VRE service. The additional 35 would only be executed after
Operations Board approval for specific capacity and/or line expansion projects.
As procurement guidelines allow for equipment contracts to span five years, this
approach would allow fleet continuity if additional equipment needs and funding
are identified.
This procurement approach mirrors the original railcar and locomotive purchases.
In addition, this procurement allows VRE to commence replacement of the
existing Pullman railcars prior to needing a major overhaul and inspection.
Under the CEO’s delegated authority, a task order to VRE’s mechanical
engineering consultant, STV, will be issued to update the previous railcar
procurement to reflect current specifications as desired by VRE. This task order
will be under $50,000.
Work will also be initiated with VRE’s financial advisors to develop various funding
opportunities. These options will include grant funding, government loans or other
debt financing, and/or include a financing mechanism in this procurement. The
cost of this work is also not expected to exceed $50,000. Once these tasks have
been completed, VRE staff will return to the Operations Board with a funding plan
and a request to issue a solicitation.
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