Agenda Item 8-D
Action Item
To:
Chairman Cook and the VRE Operations Board
From:
Doug Allen
Date:
April 17, 2015
Re:
Authorization to Amend the Contract for Fare
Collections Equipment and Software Maintenance
Recommendation:
The Operations Board is asked to authorize the Chief Executive Officer to execute a
contract amendment with Scheidt & Bachmann for maintenance of the Fare
Collections system equipment and software. The term of the amendment is an
additional year with two option years to be executed at the discretion of the Chief
Executive Officer. The cost is $660,480 per year plus a $20,000 contingency per year
for inventory replacement. An estimated escalation of 3.1% per year based on the
Producer Price Index (PPI) will be added for the option-years. The total amount of
this amendment is $2,103,499, bringing the total contract authorization amount
from $9,827,417 (October 2002 through June 2015) to $11,930,916.
Background:
In June of 2000, the VRE Operations Board authorized a contract with Scheidt &
Bachmann (S&B) for the design and delivery of a new fare collection system. The
initial contract included four years of preventive maintenance and repair support.
In October of 2002, the system was accepted and the four year term for
maintenance services began. The contract has been amended and modified over the
past nine years as the technology and requirements by the Payment Card Industry
(PCI) have changed.
Because of the proprietary nature of the fare collection system and warranty
considerations, S&B is the only vendor option to perform the ongoing system
maintenance work and extension of their contract is required.
The scope of the agreement will continue to provide two, full-time technicians to
service the system. This allows VRE to have on-site technical support from 5 am
until 7 pm on each service day, resulting in same day turnaround on down
equipment, 98%+ system reliability, and same day resolution of passenger issues.
More than 90% of their time is spent in the field.
Pricing:
Fare Collection Maintenance Pricing
Scheidt & Bachmann Fare Collections Equipment and Software Maintenance
Period
Base
Option
1
Option
2
Duration
Contract
Amount
Estimated
Escalation (3.1%)
Discretionary
Inventory
Total by
Period
7/1/2015 6/30/2016
1 year
660,480
-
20,000
680,480
7/1/2016 6/30/2017
1 year
660,480
20,475
20,000
700,955
7/1/2017 6/30/2018
1 Year
680,955
21,110
20,000
722,064
2,001,915
41,584
60,000
2,103,499
Start
End
The base annual maintenance fee for preventative and remedial maintenance
effective July 1, 2015, is $578,900. That amount is derived from the 2012
amendment pricing of $530,000 with an annual escalation of 3.1% based on the
Producer Price Index (PPI).
This agreement will also include a fee for software maintenance and security which
covers general updates and patches to the VRE fare collection application as well as
updates that are necessary to maintain PCI compliance. The software maintenance
fee also includes any fare changes that become necessary. The annual software
maintenance fee is $81,580.
The total annual price for the maintenance and software services provided by S&B is
$660,480 ($578,900 maintenance + $81,580 software). The agreement will be for
one additional year and two option years. Option year pricing includes an escalation
of the cost on July 1 of each year, beginning in July 2016, based on the change in the
PPI. For the purposes of the Operations Board authorization, a 3.1% escalation rate
is assumed for the annual PPI based adjustment. The actual rate will be determined
each year based on PPI fluctuation.
In addition to S&B maintenance services, a discretionary allowance of $20,000 per
year for spare parts inventory restocking and contingency is required. Under the
2
maintenance agreement, VRE is required to maintain a spare parts inventory at a
pre-defined, minimum level. This allowance provides for restocking parts as the
inventory is depleted throughout the year. While it is not anticipated that the full
allowance will be used, it is included to address unforeseen events.
Fiscal Impact:
The FY 2016 Operating budget includes $850,000 for Fare Collection Maintenance,
which will cover the $680,480 authorized under this amendment. Funding for Fare
Collection Maintenance will be included in subsequent years’ budgets.
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Virginia Railway Express
Operations Board
Resolution
8D-04-2015
Authorization to Amend the Contract for Fare Collections
Equipment and Software Maintenance
WHEREAS, on June 16, 2000, the VRE Operations Board authorized a contract with
Scheidt & Bachmann for the delivery of a new fare collection system; and,
WHEREAS, on October 31, 2002, the system was accepted and maintenance support
began; and,
WHEREAS, the current maintenance agreement is set to expire on June 30, 2015;
and,
WHEREAS, this proposed extension continues the support of two full-time
technicians, while also including a software support module which has become
necessary due to increasingly stringent requirements for data security and
compliance with the Payment Card Industry (PCI) standards;
NOW, THEREFORE, BE IT RESOLVED THAT, the VRE Operations Board does
hereby authorize the Chief Executive Officer to execute a contract amendment with
Scheidt & Bachmann for the maintenance of the Fare Collections system equipment
and software in the amount of $660,480 per year with a $20,000 contingency per
year for inventory replacement and estimated escalation of 3.1% per year based on
the Produce Price Index (PPI). The term of the agreement is for an additional year
with two option years to be executed at the discretion of the Chief Executive Officer.
The total amount of the agreement is $2,103,499, bringing the total contract
authorization amount from $9,827,417 to $11,930,916.
Approved this 17th day of April 2015
______________________________
John C. Cook
Chairman
____________________________
Paul Smedberg
Secretary
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