Template revised April 12, 2018.
COMMISSION
AGENDA MEMORANDUM
Item No.
6f
ACTION ITEM
Date of Meeting
January 8, 2019
DATE: November 30, 2018
TO: Stephen P. Metruck, Executive Director
FROM: Stuart Mathews, Director, Aviation Maintenance
Benny Austin, Senior Maintenance Manager, Facilities, Fleet, Systems and Grounds
SUBJECT: Procurement of Cobus Factory Original Equipment Manufacturer (OEM) Parts
Amount of this request:
$0
Total maximum estimated Contract cost:
$500,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute a contract for the
purchase of Original Equipment Manufacturer (OEM) Cobus parts for maintenance and repair
of the Cobus fleet at Seattle-Tacoma International Airport. The contract will be structured as a
one-year agreement with up to four one-year renewal options. Only contracting authority is
being requested at this time. There is no budget request associated with this authorization and
any necessary costs are in 2019 budget and future operating budgets.
EXECUTIVE SUMMARY
The Port of Seattle currently has a fleet of nine Cobus 3000 buses and is in the process of
procuring four more buses of the same model to support hardstand operations. The Port of
Seattle purchases Original Equipment Manufacturer (OEM) parts directly from the Cobus
manufacturer in Wiesbaden, Germany. We anticipate these costs to level out at approximately
$90,000 to $100,000 per year after all thirteen busses are in service. In an effort to reduce
processing time for the ordering of essential parts, Aviation Maintenance is requesting the
creation of an open vendor contract to eliminate the need to issue purchase orders for routine
purchases.
JUSTIFICATION
Aviation Maintenance currently maintains nine Cobuses with another four Cobuses on order.
Cobuses are produced in Europe and require support through Cobus Industries. Cobuses are
critical to hardstand operations which are anticipated to grow to almost one million passengers
for 2019. With the large passenger volume increase, the need for bus availability is anticipated
to increase. Engaging in this contract will help the repair process by allowing the Aviation
Maintenance Distribution Center to order parts directly from Cobus industries. Many of the
major component parts for these buses are not available from any third-party replacement part
COMMISSION AGENDA – Action Item No. _6f_ Page 2 of 3
Meeting Date: January 8, 2019
Template revised September 22, 2016; format updates October 19, 2016.
vendor and must be purchased from the Original Equipment Manufacturer (OEM). Currently we
procure parts utilizing direct purchase orders, which are time consuming and can extend the
lead time for components necessary to keep the Cobus fleet at a high level of operational
readiness. This contract will simplify the parts ordering process and reduce the processing time
for orders from 14 days to 3 days, which helps busses in operation rather than in shop waiting
for parts.
DETAILS
Original Equipment Manufacturer (OEM) parts are necessary to ensure compliance with
warranties, compatibility with existing equipment and to maintain equipment properly.
Aviation Maintenance uses alternative parts when there are no warranty/compatibility issues
with existing equipment, which is cost effective and makes business sense. Consumable parts
such as light bulbs are available from other vendors and this contract would not normally be
utilized for these types of parts.
Scope of Work
This contract is for the purchase of Original Equipment Manufacturer (OEM) Cobus parts to
support the maintenance of the Cobus fleet used for SeaTac Airport Hardstand Operations.
Contract Issuance
2019 Quarter 1
Potential Contract Extension Execution
2020 Quarter 1
Schedule
This contract is not replacing any current contracts. The Port will pursue negotiating the
contract with Cobus Industries in as expeditious manner as possible.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Do not execute a contract for Cobus OEM parts. Continue to purchase parts
using direct buy purchase orders as needed.
Cost Implications: $500,000 over 5 years. Expenditure is the same for both contracting
methods.
Pros:
(1) No contract negotiations are required, freeing procurement resources to perform
other work.
Cons:
(1) Potential for extended down time of buses supporting hardstand passenger loading
and unloading when unique, non-stock bus components and repair parts items are
required. This will potentially reduce fleet availability and negatively impact
processing times.
COMMISSION AGENDA – Action Item No. _6f_ Page 3 of 3
Meeting Date: January 8, 2019
Template revised September 22, 2016; format updates October 19, 2016.
This is not the recommended alternative.
Alternative 2 – Authorization to execute a new contract for the purchase of Cobus OEM parts.
Cost Implications: $500,000 over 5 years. Expenditure is the same for both contracting
methods.
Pros:
(1) Reduce the potential down-time for Cobus buses when non-stock parts are required.
(2) Aviation Maintenance purchaser would be able to engage directly with the vendor
which decreases the time it takes to order parts and improves our ability to ensure the
right parts get ordered.
(3) Potential for better pricing than the list price we pay with one-off direct buy purchase
orders.
Cons:
(1) Requires the time of CPO resources to negotiate the contract requirements for this
contract. These resources would not be available for other activities.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
The 2019 operating Aviation Maintenance baseline budget includes $100,000 for Cobus OEM
parts. The future annual contract amounts will be included in annual operating budgets. The
expenses relating to maintaining the Cobus fleet are recovered from the airlines through
charges to the Sea-Tac Airline Consortium, which runs the hardstand bus operations.
Future Revenues and Expenses (Total cost of ownership)
Expenses under this contract are fully recovered from the airlines through chargers to the Sea-
Tac Airline Consortium.
ATTACHMENTS TO THIS REQUEST
None
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None
