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Ohio Department of Transportation 1 Elements of a Successful Proposal Office of Transit Ohio Department of Transportation June 28, 2007.

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Presentation on theme: "Ohio Department of Transportation 1 Elements of a Successful Proposal Office of Transit Ohio Department of Transportation June 28, 2007."— Presentation transcript:

1 Ohio Department of Transportation 1 Elements of a Successful Proposal Office of Transit Ohio Department of Transportation June 28, 2007

2 Ohio Department of Transportation 2 Why Submit a Proposal? Maximize Use of Existing Resources Expand Revenue Base and Spread Fixed Costs Generate Local Match Become Viable Player in Local Community ?

3 Ohio Department of Transportation 3 How Do We Let Agencies Know We Are Interested? Networking –Normal interactions with agencies –Speeches to community groups Attendance at Pre-Bid Meetings Participation in Community Groups Working through Board Members and Government Officials Newspaper Articles

4 Ohio Department of Transportation 4 Self Assessment: Can We Do It? Legal Restrictions Service Area, Type of Service, Funding Program Limitations Vehicles Number, Type, Utilization Facilities Size, Capability Staff Number, Capability, Flexibility Type of Service Is It New or More of the Same? ?

5 Ohio Department of Transportation 5 Self Assessment: Do We Want to Do It? Agency Mission Board Direction Management –Interest –Capability Local Political Realities ?

6 Ohio Department of Transportation 6 What are the Keys to Successful Proposing? Understanding the Solicitation Preparing a Good Response Developing a Good Business Plan Planning for Start-Up and Operation

7 Ohio Department of Transportation 7 Understanding the Solicitation

8 Ohio Department of Transportation 8 Understanding the Solicitation Understand the Environment Reading the Solicitation

9 Ohio Department of Transportation 9 Key Transportation Actors Transportation Agency –Director –Board Local Governments Ohio Department of Transportation Federal Transit Administration Potential Contractors –Private –Human Service Agencies

10 Ohio Department of Transportation 10 Labor May Also Be An Important Actor Be Aware of What You May be Inheriting: –Existing employees –Wages and fringe benefits –Past employees practices

11 Ohio Department of Transportation 11 Key Laws and Regulations Ohio Revised Code ODOT Review Schedule Federal Transit Administration

12 Ohio Department of Transportation 12 The Public Process is Slow! Everything is a Process Publicly-Funded Agencies Cannot Make Snap Decisions –They are not allowed to! Conclusion: Follow the Rules!

13 Ohio Department of Transportation 13 ODOT Review Schedule

14 Ohio Department of Transportation 14 ODOT Review Schedule (Contd)

15 Ohio Department of Transportation 15 Federal Transit Administration Many Required Contract Clauses Outlines in FTA Circular C

16 Ohio Department of Transportation 16 Typical Procurement Methods Invitation for Bid (IFB) Request for Proposals (RFP) Multi-Step Strategies

17 Ohio Department of Transportation 17 Invitation for Bid (IFB) Requires Complete and Comprehensive Specifications Involves Two or More Responsive and Responsible Bidders Award Based on Price (Low Bid)

18 Ohio Department of Transportation 18 IFB Requires High Degree of Agency Certainty High Risk for Contractors Since Few Agencies Can Do This Well! Contractor Must Be Proactive to Seek Clarification at the Beginning of the Process

19 Ohio Department of Transportation 19 Request for Proposals (RFP) Prefer General Description of Service Specifications May Need Oral/Written Discussions With Prospective Contractors Award Based on Comparative Evaluation of Price, Quality, Contractual Factors –Primary factor need not be price Preferable Approach Due to Increased Flexibility and Opportunity for Creative Responses

20 Ohio Department of Transportation 20 IFB and RFP Steps Invitation for Bid (IFB) Invitation for Bids Bidder Submissions Bid Evaluation and Award Request for Proposal (RFP) Request for Proposal Proposer Submissions Technical Evaluation Additional Negotiations Cost Evaluation Composite Evaluation and Award

21 Ohio Department of Transportation 21 Multi-Step Strategies Pre-Qualify Responsible/Responsive Bidders Invite/Evaluate Different Technical Approaches Conduct Discussions to Select Best Technical Approaches Award Contract to Lowest and Best Contractor in Accordance with Sealed Bid Process Incorporates RFP Flexibility into IFB Process

22 Ohio Department of Transportation 22 Multi-Step Strategy Steps Two-Step Invitation for Bid Bid Evaluation and Award Request for Qualifications (RFQ) Request for Qualifications Biddor Submissions Qualifications Evaluation and Selection Invitation for Technical Bids Bidder Submissions Technical Evaluation Request for Pricing Bid IFB Process or Two-Step IFB Process Bid Evaluation and Award

23 Ohio Department of Transportation 23 Considerations By Procurement Method: IFB, RFP and Multi-Step

24 Ohio Department of Transportation 24 Considerations By Procurement Method: IFB, RFP and Multi-Step (Contd)

25 Ohio Department of Transportation 25 Typical Solicitation Outline Cover Page Overview of Contracting Agency Statement of Need Service Specifications Contractor Qualifications Contract Mechanics Agency Protections Required Clauses Evaluation Methodology Format of Submission

26 Ohio Department of Transportation 26 Service Specifications Start-Up Date and Performance Period Service, Routes, and Operating Hours Fare Collection and Recordkeeping Required Vehicle Maintenance Performance Reporting Capital Items Can You Do It and What Will It Cost You?

27 Ohio Department of Transportation 27 Service, Routes, and Operating Hours Issues Make Sure You Know Definitions Understand the Service Profile of Demand –Time of Day –Day of Week Are There Service Guarantees? –Minimums? –Maximums?

28 Ohio Department of Transportation 28 Vehicle Requirements Should Be Reviewed Carefully! Vehicles Provided by Contractor –Do you have the vehicles? –Where and how quickly can you get them? –Can you meet safety and other requirements? Vehicles Provided by Public Agency –What are the condition of the vehicles? –When will you take possession? –Will you have to supplement the fleet? Contingency Plan –You need one !

29 Ohio Department of Transportation 29 Contractor Qualifications Proposed Personnel Experience –The firm as a whole –Proposed personnel Total professional experience Experience with firm Financial Capability –Agency wants to make sure you are viable Cash Flow Adequate working capital Capital Funding of vehicles and facilities

30 Ohio Department of Transportation 30 Contract Mechanics Contract Length Amendment Process Reporting Requirements Payments

31 Ohio Department of Transportation 31 Contract Length Options Single Year –Does not address high start-up cost factors Start-up operations costs Equipment amortization Transition costs from prior contractor –Avoid if equipment acquisition is required or other longer-range opportunities are available Multi-Year –Addresses high start-up cost factors –Should address how service changes are handled

32 Ohio Department of Transportation 32 Multi-Year Contracts Are Most Common Often Structured as Minimum Time Frame Plus One-Year Renewals –e.g., Three years plus two one-year renewals Maximum Contract Length Limited by Federal, State, and Local Regulations

33 Ohio Department of Transportation 33 Typical Amendment Issues Changes (±) in Required Service –Amount –Vehicles required Changes in Commodity Prices –Insurance –Fuel New Government Requirements

34 Ohio Department of Transportation 34 Monthly Contractor Reports: Keep Them Informed! Operations –Revenue/total hours and miles, missed trips, schedule performance Passengers and Fare Revenue Financial Results Accident and Safety Information Maintenance Activities –Preventive maintenance inspections, warranty work, major repairs Driver/Mechanic Training Activities Anticipated Issues for Coming Month

35 Ohio Department of Transportation 35 Basic Payment Options: Fixed Price Price set for performance period Contractor assumes risk for cost and service increases Conclusion: Avoid if Possible

36 Ohio Department of Transportation 36 Basic Payment Options: Fixed Unit Price Most Common Price tied to output measures –Service provided revenue/total hours (miles) –Passengers served –Contractor preference: 1) total 2) revenue 3) passengers Contractor assumes risk for cost increases –Also ridership if price based on passengers carried Conclusion: Reasonable, But Do Your Homework If Based on Passengers

37 Ohio Department of Transportation 37 Basic Payment Options: Cost Plus Fixed Fee Accounts for allowable changes in contractor costs Agency assumes risk for cost increases Conclusion: Good Approach, But Few Agencies Willing to Take These Risks

38 Ohio Department of Transportation 38 Pass-Throughs Can Reduce Contractor Risk and Cost Approach –Agency agrees to pay exact cost for specified items regardless of increases Fuel and Insurance Common Pass-Throughs Risk: Need to Specify How Costs Can Be Disallowed Other Option is to Provide Items Directly –e.g., fuel at agency fueling island Conclusion: Discuss with Agency Before and During Solicitation

39 Ohio Department of Transportation 39 Payment Terms Key To Cash Flow Key Provisions –Required invoicing format –Invoice approval process –Payment timeline Guarantee is desired

40 Ohio Department of Transportation 40 Agency Protections Insurance Bonding Key Personnel –Approval of replacements Subcontractors –Approval of replacements Agency Provided Equipment and Assets –Required maintenance program –Required maintenance records

41 Ohio Department of Transportation 41 Objectives of Bond Requirements Agency Protection –Assures contractor will enter into contract (bid bond) –Guarantees service performance will meet terms of contract (performance bond) Credit/Financial Screen

42 Ohio Department of Transportation 42 Performance Alternatives Holdbacks (1-5%) Penalties and Incentives Post Cash

43 Ohio Department of Transportation 43 Incentives Must be: –Important –Measurable –Reasonable –Under contractor control Conclusion: Do Not Count Your Chickens Before They Hatch! Generally Do Not Include in Your Budget

44 Ohio Department of Transportation 44 Penalties Must be: –Important –Measurable –Reasonable –Under contractor control Should Be Proportional to Offense Conclusion: Count Your Chickens Before They Hatch! Include in Your Budget (Things Do Happen Even in the Best Systems)

45 Ohio Department of Transportation 45 Why So Many Contract Clauses? Public Safety Good Public Fund Stewardship Employee Protections ?

46 Ohio Department of Transportation 46 Required Contract Clauses (Standing in the Agencys Shoes) FTA Circular C ODOT Rural Transit Program Manual The Key Clauses Are Covered Next

47 Ohio Department of Transportation Remedies for Breach of Contract Available Remedies to the Grantee if Contractor Violates or Breeches Contract Terms –Administrative –Contractual –Legal Remedies Provision for Appropriate Sanctions and Penalties Ideally, We Should Never Get This Far

48 Ohio Department of Transportation Contract Termination (>$10,000) Conditions Under Which the Grantee May Terminate the Contract for: –Default: Contractor fails to comply with terms of the contract –Convenience: Contractor cannot comply due to circumstances beyond contractors control

49 Ohio Department of Transportation Equal Employment Opportunity (>$10,000) Contractor Agrees to Take Positive Action to Insure that Persons Employed or Seeking Employment Are Treated Without Bias Regarding: –Race –Religion –Color –Sex –National origin Contractor Required to Conspicuously Post Notices

50 Ohio Department of Transportation Contract Work Hours and Safety Standards Act Contractor Must Pay Overtime (1.5 x wage rate) to Laborers and Mechanics for Work Exceeding 8 Hours per Day Prohibits Requiring Workers to Work in Unsanitary, Hazardous, or Dangerous Conditions as Defined by Secretary of Labor Applies to: –Construction contracts > $2,000 –Other contracts > $2,500

51 Ohio Department of Transportation Access to Contractors Records Provisions Cover Access to the Contractors: –Books – Papers –Documents – Records Access Granted to: –Grantee –ODOT –FTA –Comptroller General –Authorized agents Materials Must Be Maintained for 3 Years

52 Ohio Department of Transportation Disadvantaged Business Enterprise Contractor Will Take Affirmative Steps Whenever Possible to Use DBEs as Sources of Supplies, Equipment, Construction, and Services Selected Affirmative Steps –Place qualified DBEs on solicitation lists –Assure that DBEs are solicited when they are potential sources –Divide projects into small tasks suitable for DBEs –Establish procurement schedules that encourage DBE participation Make Sure You Know Agency Requirements

53 Ohio Department of Transportation Buy America Steel, Cement, and Manufactured Products Used in FTA-Supported Projects Must Be Produced in US. FTA Can Make Special Exceptions

54 Ohio Department of Transportation Title VI Civil Rights Act of 1964 Non-Discrimination –Selection and Retention of Contractors –Procurement of Materials and Leases of Equipment –Employment Practices Provide Access to Records Compliance with Regulations Requirements Pass Through to Subcontractors

55 Ohio Department of Transportation Americans with Disabilities Act Service Provided by Contractor Must Meet All Requirements for Grantee (Standing in the Agencys Shoes) –Complimentary service –Vehicle accessibility –Public information –Telecommunications

56 Ohio Department of Transportation Drug and Alcohol Testing Comply with Federal Requirements –49 CFR Parts 655 and 40 –Drug Free Workforce Act 49 CFR Part 29, Subpart F

57 Ohio Department of Transportation Selected Other Contract Clauses Lobbying No Government Obligation to Third Parties Program Fraud and False or Fraudulent Statements and Related Acts Government-wide Debarment and Suspension Non-Procurement

58 Ohio Department of Transportation 58 Evaluation Methodology Depends on Procurement Method –IFB Assessment of Responsive and Responsible –RFP Assessment of Cost and Non-Cost Factors Evaluation Objectives –Objective –Quantifiable Conclusions –Need to write your proposal to cover criteria –Need to state obvious facts about yourself

59 Ohio Department of Transportation 59 Common RFP Evaluation Factors Cost Proposed Technical Approach –Service Delivery Approach –Maintenance Plan –Transition/Start-Up Plan Proposed Personnel Experience

60 Ohio Department of Transportation 60 RFP Factors Often Weighted to Aid Contractor Selection Scoring of Bobs Contracting, Inc. by Barry Bonds, Reviewer Conclusion: Write Proposal in View of Point Emphasis

61 Ohio Department of Transportation 61 Preparing a Good Response

62 Ohio Department of Transportation 62 Keys for Writing a Good Proposal Demonstrate that You Know: –The services to be provided –The local operating environment Know Your Competitive Strengths and Weaknesses –Who are your likely competitors –What sets you apart from them Demonstrate that You Will Provide Value

63 Ohio Department of Transportation 63 Pre-Bid Meetings Can Help You Develop a Responsive Proposal Typical Agenda –Agency overview –Project objectives –Key project information –Agency contact for questions –Contractor questions

64 Ohio Department of Transportation 64 Suggestions for Pre-Bid Meetings DO Ask Clarification Questions DO NOT Ask Questions that Reveal Your Approach USE the Meeting to Size Up Your Competition DO NOT USE the Meeting to Reveal Your Proposed Team USE the Meeting to Establish a Good Relationship with the Agency

65 Ohio Department of Transportation 65 Write for Someone Who Does Not Know You Describe the Services Provided by Your Company Describe Your Experience and Knowledge of the Local Community Highlight Your Accomplishments –Toot Your Own Horn!

66 Ohio Department of Transportation 66 Identify and Write to Members of the Agency Evaluation Team Sometimes the Members are Identified in the Solicitation If not, Ask Who They Are

67 Ohio Department of Transportation 67 Follow All of the Rules! Order of Presentation Due Dates Number of Copies Size Pages, Fonts, Tabs, Margins Signatures/Legal Forms Attachments

68 Ohio Department of Transportation 68 Remember the Agencys Procurement Requirements Treat All Prospective Sources Equally Maintain An Arms-Length Procurement Relationship Do Not Accidentally Put Your Agency Friends in a Bad Position

69 Ohio Department of Transportation 69 Recourse: Partnering Meet and Discuss Objectives –Keep agency informed about operations –Address issues before they escalate into big problems –Focus on solutions and lessons learned Recommend Weekly Meetings

70 Ohio Department of Transportation 70 Award and Start-Up Agency Responsibilities Contractor Responsibilities

71 Ohio Department of Transportation 71 Agency Responsibilities Agency Should Designate Points of Contact –Contract Manager Changes/amendments, recordkeeping, respond to inquiries –Service Manager Operations issues, monitor performance, initial invoice review, initiate contract changes, assist contractor

72 Ohio Department of Transportation 72 Contractor Responsibilities Start-up Plan Hiring and Training of Personnel Procurement of Equipment Communication with Former Contractor(s) Vehicle Repair

73 Ohio Department of Transportation 73 Understanding of Your Costs Fixed Costs Do Not Vary with the Amount of Service Provided (e.g., Administrative Salaries) Variable Costs Change Relative to the Amount of Service Provided (e.g., Drivers Wages) Fixed Variable Total Output (Hours/Miles) Cost

74 Ohio Department of Transportation 74 Example of Expense Assignment

75 Ohio Department of Transportation 75 Example of Unit Cost Calculation

76 Ohio Department of Transportation 76 Three Estimates of Contract Costs Fully Allocated (Highest) –All costs (variable + fixed) Reallocated Fixed Costs –Variable costs –Fixed costs (spread over more service) Incremental Costs (Lowest) –Variable costs only

77 Ohio Department of Transportation 77 Sample Problem The transit system wishes to start a new service between a small town and the county government center. What should you charge for this service? Estimated Annual Operating Data for the New Service. Hours = 6,120 Miles = 153,000

78 Ohio Department of Transportation 78 Sample Problem: Fully Allocated Cost All Costs Increase with New Service

79 Ohio Department of Transportation 79 Sample Problem: Incremental Cost Only Variable Costs Increase with New Service

80 Ohio Department of Transportation 80 Sample Problem: Reallocated Fixed Costs Only Variable Costs Increase with New Service Reallocate Fixed Costs Across Existing and New Service

81 Ohio Department of Transportation 81 Sample Problem: Reallocated Fixed Cost All Costs Increase with New Service

82 Ohio Department of Transportation 82 Sample Problem: Summary of Three Approaches

83 Ohio Department of Transportation 83 Business Plan – Non-cost Components Staffing – Drivers –Part-time –Full-time –Overtime Dispatchers Supervisor Coverage –Scheduled –On-call Management Team Support –Local –Corporate Financial Manager –Budget –Cash Handling –Fare/Revenue Collection Procedures –Expenses Recordkeeping/ Reporting

84 Ohio Department of Transportation 84 Startup / Transition Plan Timeline – Work Backwards From Startup Date Understand Interrelationships Between Tasks Be Thorough Incorporate Contingencies Commit Necessary Resources –Staff Hours –Revenue Outlays –Vehicles –Facilities Be Prepared to Mobilize Quickly

85 Ohio Department of Transportation 85 Startup Plan Components Staffing –Recruiting –Hiring –Drug Testing –Training Vehicles –Purchase/Lease –Inspections –Preventative Maintenance –Repairs to Minimum Standard

86 Ohio Department of Transportation 86 Startup Plan Components (Contd) Administration –Recordkeeping –Accounting/Bookkeeping Procedures –Personnel Policies/Procedures –Telephone Lines / Internet Procurement –Inventory –Maintenance Consumables –Equipment –Supplies –Brochures/Ride Guides

87 Ohio Department of Transportation 87 Startup Plan Components (Contd) Operations –Service Design and Characteristics –Driver Manifests/Schedules –Scheduling/Dispatching Procedures In Place –Obtain Necessary Information From Former Contractor – Check for Accuracy/Efficiency


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