Merced County bus contracts will be put out for bids

The fuel, maintenance and operations contracts for Merced County’s bus system will be opened to a competitive bidding process, the Merced County Association of Governments decided in a majority vote earlier this month.

The action comes after county leaders publicly criticized the decision to put the contracts out to bid rather than doing the work in-house, saying the potential loss of the maintenance work, done by Merced County since 2010, would result in a loss of six mechanic jobs.

The county provides the maintenance and fuel, and an outside vendor has the operations contract.

The decision to put all three contracts out to bid passed by an 8-2 vote last week with Supervisor John Pedrozo and Livingston City Councilman Arturo Sicairos casting the dissenting votes. Sicairos was filling in for Livingston Mayor Rodrigo Espinoza on the MCAG’s governing board.

If county leaders fail to put out to bid the three contracts in a “full and open competition,” the county could lose $4.5 million in funding from the Federal Transit Administration to support its transit system, The Bus. According to the FTA, all contracts exceeding $100,000 must go through a competitive bidding process, but Merced County was not doing that.

The new requirement stems from changes to existing FTA oversight guidelines and new regulations, according to MCAG spokeswoman Stacie Dabbs.

The bidding documents for the fuel, maintenance and operations contracts will be combined into one Request for Proposal, according to MCAG. Bidders will have the option to bid on any or all of the services.

According to MCAG documents, Merced County is paying more per mile for its bus maintenance costs than other similar size transit agencies, such as Kings County, San Luis Obispo and the city of Visalia. Maintenance costs are calculated by the total miles traveled, Dabbs said.

For The Bus, maintenance is costing about 90 cents per mile for paratransit and about 88 cents per mile for fixed route buses. The agency should be spending up to 80 cents per mile for maintenance costs, according to federal mandates.

“We’re trending upward for our maintenance costs, and we have to get our maintenance costs per mile down to 80 cents,” Dabbs said. “We need to bring that number down because I think that’s a red flag the FTA has been picking up in our review processes.”

The bus maintenance contract provides 70 percent of the workload of mechanics at Merced County’s heavy equipment yard. County officials estimated six people would lose their jobs if another provider is awarded the contract.

Dabbs said the Request for Proposal for the contract could ask bidders to hire any displaced Merced County employees, if they meet the minimum qualifications.

The Bus’ fuel agreement is also held by Merced County, though no formal or written contract exists. The fleet of 80 buses makes up 60 percent of diesel fuel sales at the county’s facility, according to Merced County Public Works Director Dana Hertfelder.

The Transit Joint Powers Authority of Merced County, which oversees bus services, spends $1.2 million per year on fuel, according to documents.

Hertfelder doesn’t expect an immediate negative impact from losing the fuel agreement, but he said it could have long-term effects when the county rebids its contract with the fuel supplier.

“It could (impact us) because we’ll be buying less gallons of gas,” Hertfelder said in a previous interview. “The more the (gas) volume, the better the prices you get.”

The operations contract for The Bus, which includes drivers, supervision and insurance, is not held by Merced County. Dabbs said Merced Transportation Co. is the operations vendor.

The contract for all three services would be for five years, Dabbs said.

This story was originally published November 17, 2014 at 9:48 PM with the headline "Merced County bus contracts will be put out for bids."