2-23-2011 Transit Bus Pre-Solicitation Conference Transcript - 3-28-11 FINAL.docx
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UNITED STATES OF AMERICA
GENERAL SERVICES ADMINISTRATION
TRANSIT BUS PRE-SOLICITATION CONFERENCE
| WEDNESDAY |
| FEBRUARY 23, 2011 |
The Conference met in the Lobby Level Conference Room, 2200 Crystal Drive, Arlington, Virginia, at 9:00 a.m., Craig D. Yokum, Contracting Officer, presiding.
PRESENT
CRAIG D. YOKUM, Contracting Officer, Automotive Acquisition Division JERRY KNOLL, Project Manager and Engineer DENISE BANKS, Director, Center of Automotive Acquisition DANIEL BUCKINGHAM, Branch Chief, Engineering CHRIS DAVIS, Branch Chief, Program Management JEFFREY MEYERS, Acting Director, Automotive Acquisition Division RUSSELL MILLER, Engineer and COTR
LYNNETTE HENDERSON, GSA
DANA MAYKISH, GSA
DONALD COMBS, Colonial Equipment Company* BARRY FITZGERALD, Colonial Equipment Company* JIM GALLAGHER, BusStuf Inc.
MARK GAMBACCINI, TwinVision Inc.
JOE GIBSON, North American Bus Industries* MARK GOTTSCHALK, Proterra Inc.* ROGER HAWKINS II, Daimler Buses North America DAVID MARCHITELLO, American Seating MATHIEU NADON, Volvo Bus ERIC REYNOLDS, Sonny Merryman, Inc.
JERRY SHEEHAN, Gillig LLC
GLENN WILDER, USSC LLC/4ONE LLC
ROBERT ZIMMERMAN, Carrier Transicold*
* Participating via telephone
| NEAL R. GROSS | |||
| COURT REPORTERS AND TRANSCRIBERS | |||
| 1323 RHODE ISLAND AVE., N.W. | |||
| (202) 234-4433 | WASHINGTON, D.C. 20005-3701 | www.nealrgross.com | |
| P-R-O-C-E-E-D-I-N-G-S | |||
| 9:03 a.m. | |||
| MR. YOKUM: Okay, we're going to start it. | |||
| Good morning, welcome to the Pre-Solicitation Conference for Transit Buses. If you were looking for another Disney ride, it's probably across the hall. And I think admission is one pint of blood, so, if you want to join that, you can do that as well. | |||
| So, welcome. First of all, I want to make some introductions of the GSA team. | |||
| I am Craig Yokum. I am the Contracting Officer handling the transit bus procurement. And with me, I have my Acting Director, Jeff Meyers, in the back. | |||
| So, we are joined on the acquisition team by our program office and engineering team as well. We have Denise Banks in the back in the blue. She's Director for the Center of Automotive Acquisition. | |||
| We have Dan Buckingham, who I met just this morning, as well, as our new Branch Chief for Engineering. | |||
| We have Russ Miller up front here, Engineer, and he will be the COTR on this procurement. | |||
| And I have Jerry Knoll up front as well, Project Manager and Engineer, and Chris Davis, as well, next to Denise, who is the Branch Chief for Program Management. And he will give us a presentation on the AutoChoice program a little later on. | |||
| First, I'd like to address a few administrative issues before we go forward. | For this conference, there's a sign-in registry. If you haven't checked off your name or signed in, in the back, please do so. You can do it at break time or at lunch time. | ||
| Please silence all your cell phones. | |||
| For this conference, we're going to present through PowerPoint slides. So those of you on the phone, please bear with us. | |||
| We will make available the PowerPoint slides and a transcription of this conference on FedBizOpps, so you will be able to, eventually, review all the material presented here for that, as well as those of you participating here as well. | |||
| And, like I said, that will be on FedBizOpps. And to access that information, it's the solicitation keyword QMAE-CY-110303-N. | |||
| Right now, the information that we have and that we're presenting here is in draft format, so we will make changes, I have a feeling. | |||
| And right now, you're free to ask whatever questions to whomever. Once we issue the solicitation, however, all questions and comments will come directly to me, please. | |||
| We will be operating today from 9:00 to 4:00, as well as tomorrow. So, what we have planned is breaks, one in the morning, one in the afternoon, maybe 15 minutes. | |||
| We have restrooms outside the hall here, women's right outside the door, and the men's a little further down, to your left. | |||
| We have a snack bar across the way, and vending machines just a little up from the snack bar. | |||
| We'll take lunch at around 12:00. We'll try to break it at a convenient moment for an hour. | |||
| Questions and answers we will take both during the presentations as well as at the end of the day. | |||
| And please state your name before asking your questions, as this is being transcribed and we want to know who said what or who asked what. | |||
| With that, I would like those participating here to introduce themselves, their name, and their company that they represent. | |||
| So I'll pass around the mic, and then we'll get those on the phone as well. | |||
| MR. KNOLL: Okay, I'm Jerry Knoll. I'm the Project Engineer and Project Manager for the Transit Bus Program. And I'll introduce Russ Miller. | |||
| MR. MILLER: Good morning, everyone. | |||
| MR. SHEEHAN: Jerry Sheehan, with Gillig. | |||
| MR. HAWKINS: Roger Hawkins, with Daimler Buses. | |||
| MR. REYNOLDS: Eric Reynolds, with Sonny Merryman Incorporated. | |||
| MR. GALLAGHER: Jim Gallagher, with BusStuf. | |||
| MR. MARCHITELLO: David Marchitello, with American Seating. | |||
| MR. MEYERS: Jeff Meyers, with GSA. | |||
| MS. MAYKISH: Dana Maykish, with GSA. | |||
| MR. DAVIS: Chris Davis, with GSA. | |||
| MS. BANKS: Good morning. Denise Banks, GSA. | |||
| MS. HENDERSON: I'm Lynnette Henderson, GSA. | |||
| MR. BUCKINGHAM: Dan Buckingham, GSA. | |||
| MR. WILDER: Glenn Wilder of USSC/4ONE. | |||
| MR. GOTTSCHALK: Mark Gottschalk, Proterra. | |||
| MR. HILL: Dale Hill, Proterra. | |||
| MR. YOKUM: Okay, those on the phone, your name and company, please? | |||
| MR. NADON: Matt Nadon, at Volvo Bus. | |||
| MR. COMBS: Don Combs and Barry Fitzgerald, with Colonial Equipment. | |||
| MR. ZIMMERMAN: Bob Zimmerman, from Carrier Transicold. | |||
| MR. GAMBACCINI: Mark Gambaccini, with TwinVision. | |||
| MR. GIBSON: Joe Gibson, with North American Bus Industries. | |||
| MR. KNOLL: Joe Gibson, with North American Bus Industries. | |||
| MR. YOKUM: That was Joe Gibson? | |||
| MR. GIBSON: Yes. | |||
| MR. KNOLL: Okay, thank you. Anybody else? | |||
| MR. YOKUM: Okay, at this point, I'll let Jerry Knoll take over, and start talking technical. | |||
| MR. KNOLL: Okay, thank you, Craig. | |||
| I think people can hear me without the microphone. Can everybody hear me okay? | |||
| MR. YOKUM: Do you have to have that for the phone? | |||
| MR. KNOLL: Can you on the phone hear me okay? | |||
| MR. GIBSON: Okay. You're right there, but not without the microphone. | |||
| MR. KNOLL: Well, I'll hold the microphone here so it might be a little bit better. | |||
| What we want to do this morning, is, first of all, explain the government's program method to some of you who are not familiar with the government automated ordering program, the way the government normally orders vehicles, so there will be some new things to learn this morning. | |||
| Chris Davis will be giving an AutoChoice demonstration a little bit later on. | |||
| But I'm going to go over the history in a few minutes. But prior to now, transit buses have been procured through our non-standard procurement program. | |||
| That means a purchase description is written, a separate solicitation is issued, and the award is made, bus is procured. | |||
| But based upon our history and what we see in the future, we want to issue a different type of contract, a different type of solicitation. It will be an IDIQ type of contract. | |||
| Craig will go over the particulars of the solicitation and the type of acquisition and the evaluation criteria, but this will give industry an opportunity to get a lot more visibility to our executive customer agencies. | |||
| We're going to demo the agency ordering process so that those of you who are not familiar with it will see what our customers see, and understand fully how your product will be featured in our automated ordering process. | |||
| We're going to do a review of the technical requirements. Now, the PDs were posted on FedBizOpps. | |||
| I want to kind of reiterate that this is not a federal standard. You can't go to the federal standards and pull up what we're going to talk about today. | I've got the purchase descriptions loaded on the screen. There's three of them. They're all very similar. I'm not going to go through them in detail. Hopefully you all who have seen them may have questions. | ||
| I'll talk about them a little bit, but for those in the transit industry, there's not anything that is surprising, and so hopefully we can go through that part fairly quickly. | |||
| We want to also encourage industry participation and feedback. This is your opportunity to let us know how we can tailor the programs and not only fit our customers' needs, but you in industry as well - our partners. | |||
| Okay, next slide. Okay, you did it. | |||
| Now, there are three types of buses that are being solicited. They're all the same length, basically the same passenger capacity, a diesel, diesel-electric hybrid and CNG. | |||
| What you don't see here right now is an all-electric bus. And the reason for that is, we have not been able to do a market research, first of all, on the new technology, electric buses that are just coming to market and being commercialized. | |||
| So our friends from Proterra, this is one thing that we will be considering in the near future. We'd be interested in talking to you and receiving some information about your commercialization, where you are in the manufacturing process and so forth, so that when we do our due diligence and our market research, you're the type of people we want to visit and learn about your product. | |||
| But right now, it's a CNG, diesel electric hybrid and clean diesel. Okay? | |||
| For those of you who don't know, GSA is a mandatory source for all vehicles. The Federal Property Management Regulation that all executive agencies are mandated to buy vehicles through GSA, and that includes the Department of Defense for non-tactical vehicles, so our customer audience is really large. | |||
| Okay, I want to talk a little bit about the Trade Agreement Act. Those in the transit bus industry are used to dealing with the Buy America Act, which I believe is a subset of the Trade Agreement Act. | |||
| But we are bound by the Trade Agreement Act, which is specific to the location of the assembly of the vehicle as opposed to content. | |||
| So, the Trade Agreement Act is what we are required to follow, not the Buy America Act. That's a little bit different for people who are used to dealing with the FTA and transit properties. | |||
| Any questions there about the Trade Agreement Act or the difference between our way of operating and the FTA? | |||
| MR. HILL: Just to clarify, what you're saying is the vehicle has to be assembled within the United States? | |||
| MR. KNOLL: No. No, it has to be assembled in a country with whom we have a trade agreement. | |||
| MR. HILL: Okay. | |||
| COURT REPORTER: Sir, could you identify yourself? | |||
| MR. HILL: Pardon? I'm sorry, Dale Hill with Proterra. | |||
| MR. KNOLL: And that's, of course those of you familiar with the Buy American Act, that's based on a certain percentage of content that it has to be American, so that's a little bit different. | |||
| Now, based on our past history with transit buses, these are what we have defined as our potential agency customers, Department of Defense, Department of Energy, Department of State, Department of the Interior, in particular the National Park Service, and GSA Fleet is our sister organization who leases vehicles to customer agencies, so, GSA Automotive, which I'm a part, and supported by procurement, buys vehicles for GSA Fleet, who, in turn, lease them. | |||
| And so we've bought transit buses for GSA Fleet that have gone to the State Department and the Marine Corps, for example. They are one of our largest customers. | |||
| Now, going over a short history, five-year history, of our transit bus procurement, all done under a non-standard program, each time an agency has a need, they enter into an agreement with us and we procure buses, write a purchase description. | |||
| It goes out for solicitation, offers are received, and so forth. There have been 22 hybrid electric vehicles put in service for the National Park Service, thirty-one compressed national gas buses in service with the National Park Service, GSA fleet for the DOD and for the State Department. | |||
| And due to the repetitive nature of the requirements, now we are to the point where we want to solicit these for our long-term programs and not have to solicit under our non-standard type program. | |||
| This is a picture of the CNG bus that was built for the Grand Canyon. This is the hybrid electric bus that went to Yosemite, and the next picture is the Fleet Bus. It looks like a rather generic bus, but it's the bus that we built or procured for Fleet to lease to the various government agencies. | |||
| MR. YOKUM: That's the diesel. | |||
| MR. KNOLL: No, that's the CNG, the CNG. | |||
| The federal executive branch agencies with potential, based on past history, to utilize the program include, but are not limited to, okay, the next slide, the National Park Service. | |||
| Now, they're interesting, because with these 393 National Parks, many of them who are dealing with an influx of visitors with cars, they're developing transportation plans that include enhancing the visitor experience by quieter vehicles, more fuel efficient vehicles, and alternate fuel vehicles. | |||
| So their goal is to eliminate the need for visitors to drive their cars around the parks, bring them from a location into the park, and then have a -- I want to call it a shuttle system that takes visitors from one point of interest to another and just relieve the congestion within the parks. | |||
| And this has been an ongoing program with the Park Service for the last eight or nine years. And that's why a lot of our business with these transit buses has been centered with Yosemite and Grand Canyon and other National Parks that are going through this evolution. | |||
| Okay, next slide. Another driver in the Department of Defense are bases that are being closed. Now, the influx of the remaining bases, influx of new civilian personnel, new military personnel, puts their transportation system under a lot of strain. | They, too, are developing transportation plans for transit buses, some of them even with their desires for the type of intelligent transportation system technology that allows the customers to know when a bus is going to be at a particular bus stop from their electronic device, smart phone, or a computer. | ||
| So they're getting quite sophisticated in their thinking in how they are going to manage the transportation around these military bases that have seen a lot of folks come in due to other bases being closed. | And of course, they're also interested in phasing out their old, inefficient technology. All the government agencies are under a mandate to improve their carbon footprint. And so, the clean diesel, CNG, hybrid electric, at some point maybe all-electric buses are certainly in their thinking. | ||
| Any questions about the federal customer agency base? | |||
| MR. YOKUM: Just a comment. I think they've closed a number of military offices here, right in Crystal City, and I think that they were talking about, parking is going to be a problem where they're moving. | |||
| MR. KNOLL: It always is. Yes, they moved -- | |||
| MR. YOKUM: So, I'm thinking -- | |||
| MR. KNOLL: And in Oklahoma, where I live, Fort Sill has had a big influx, Fort Bragg has had a big influx of people, so they're all dealing with this occurrence. | |||
| Now, I had one question asked about the difference between the FTA, federal transit properties, and the executive agencies. | |||
| The question was, can the federal transit properties buy through this program? The answer is no, with the exception of one, at least, WMATA, municipalities and transit properties, people dealing through the FTA procurement do not buy through GSA. So our customer layout, or the federal executive agencies -- and it's certainly not limited to the ones that I just described, there are literally, I guess, Chris, thousands of authorized users of AutoChoice, from the Veterans Administration to people like the Indian Health Service that we've dealt with on various projects. So the federal executive agency customer base is quite large. | |||
| Any questions about that customer base, before we go on to the next slide? Okay. | |||
| MR. GIBSON: Yes, Jerry, this is Joe Gibson. I do have a question. | |||
| MR. KNOLL: Yes, Joe? | |||
| MR. GIBSON: Can you comment on how large these particular transit bus fleets are at these various executive agencies? | |||
| I know that you cited that you recently purchased 22 electric hybrids and 31 CNG-transit-type buses in the last five years. But how big are these particular fleets, and what's the population of buses? | |||
| MR. KNOLL: Well, Joe, that's a good question. Within the National Parks Service -- | |||
| MR. YOKUM: Could you repeat the question? | |||
| MR. KNOLL: Okay, the question Joe has is, how big are the fleets that -- within our customer base. | |||
| I can't speak for the military, because you might liken them to small communities running a transit program. But some of the larger national parks have fleets of around 20 buses. That's a pretty good-sized order, and so, that's about all to my knowledge that I can say about the size of the fleets. | |||
| It's going to vary by what the agencies need. I know the State Department and the buses that we just procured for our fleet sister organization, they got one that they're operating in the DC area. The Marine Corps base Quantico got four. | |||
| And so it depends on how they're phasing out their old ones. And I can't really address the fleet size much more than that. But certainly, it's not the same size as you're talking about some of the transit properties, particularly the larger ones. It might relate to some of the smaller transit properties. Okay? | |||
| MR. GIBSON: Thank you. | |||
| MR. KNOLL: Okay, any other questions about our customer base, because for people in the transit bus industry, that's important to understand, this is a different customer base. Okay? Yes, sir? | |||
| MR. HILL: This is Dale with Proterra. A large proportion of your military buses are not transit buses, they're school buses, and a good number of your national park buses are school buses and not transit buses. | |||
| MR. KNOLL: And that's what they want to change. | |||
| MR. HILL: Okay. | |||
| MR. KNOLL: That's what they want to change. | |||
| MR. GIBSON: Jerry, could you repeat your question? | |||
| MR. KNOLL: Yes. Okay, the question was, a lot of the buses that are in government service today at military bases and elsewhere are school buses, and even in some of the customer base that I just mentioned, maybe the National Park Service. | |||
| But what they're trying to do is move from the school-bus-based platform to a transit-bus-based platform to accommodate their customers in a more comfortable and efficient manner. Okay? | |||
| MR. GIBSON: Thank you. | |||
| MR. KNOLL: Now, does that answer your question, Dale, that that's -- | |||
| MR. HILL: Yes. | |||
| MR. KNOLL: That's what I'm seeing. | |||
| MR. HILL: Yes, because you've got transit bus people here. | |||
| MR. KNOLL: Right. | |||
| MR. HILL: And if you're talking about school buses, we're wasting our time. | |||
| MR. KNOLL: That's right. No, no, this is a transit bus program. | |||
| Now, the GSA does have a bus program now on our automated ordering, AutoChoice, we call it. And they're primarily school buses, some work buses, prison buses. They don't address the needs of the transit industry. | |||
| The National Park Service, if you see like -- Russ and I have been to some of these parks where they've been developing their transportation plans, what they are replacing is not really visitor-friendly. | |||
| And so their objective is to enhance the visitor experience with more comfort, operate a bus system, transportation system, within the park that is very similar to an urban duty cycle, okay? | |||
| MR. HILL: Okay. | |||
| MR. MILLER: What the goal here is: there's practically 600,000 vehicles in the federal fleet, okay, and there's definitely not enough transit buses. | |||
| And with all the executive agencies, including the DoD on this initiative to reduce fuel -- to reduce the fuel consumption, you have to get people out of their cars, and that's what buses are all about. | |||
| And the Park Service is kind of leading that initiative to get people out of -- visitors out of their cars, so they have to have something that's enticing for them, that's going to be reliable, and something that then they'll actually want to travel on. | And that's no different than what we're seeing with the other executive agencies, whether it's internal transportation routing between buildings or whatever it is. If the transportation solution is not desirable, it won't be used. | ||
| MR. KNOLL: Good point. | |||
| Okay, next slide, please. | |||
| Now, a little bit about our program plan, as we go into the transit bus program, offerors -- we are requiring to be OEMs or authorized dealers of the OEM. The type of contract will be an indefinite delivery, indefinite quantity with base plus option years. | |||
| Multi-vendor awards are possible for each vehicle type, and we want to drill down into that a little bit. And as we get into our AutoChoice demonstration, you will see an example of what I'm talking about. But when we receive offers, Company A makes an offer on a diesel bus, Company B makes an offer on their model of the diesel bus, Company C makes their offer on a model of a diesel bus. | |||
| All three, it's possible to receive an award, unless somebody is really out of the competitive range. I'm not too concerned, myself, about that occurrence, because your market is very competitive, and so the likelihood is that for these three items, we will have multiple awards, and our customer base will see each company represented. | |||
| And we'll show you how that looks to them, and how if an award is made to your company, how it would look to our customer, how orders would be processed, and how they would flow, and you'll have a better idea of what I'm talking about. | |||
| But a multi-vendor award is possible for each vehicle type. And, as I mentioned, GSA's automated ordering program will be utilized for use in this system. | |||
| Yes? | |||
| MR. MEYERS: Jerry, you might want to clarify. Jeff Meyers. You might want to clarify -- | |||
| COURT REPORTER: Sir, could you identify yourself, for the record? | |||
| MR. MEYERS: Jeff Meyers. | |||
| MR. KNOLL: GSA. | |||
| MR. MEYERS: GSA. You might want to clarify that we are not looking right now at multiple vendor awards for the same identical product, so if two people are offering the same identical chassis, that probably would not result in a multiple award. | |||
| MR. KNOLL: Yes, that's a good point. For a particular model, and let me give you an example, and this could occur. I'm not saying that it would, but if Company A makes an offer for a model of their bus, and a dealer makes an offer on the identical model, only one award will be made, okay? | |||
| But what I anticipate is that Company A has a model they call model XYZ for a diesel bus. Company B has a model they call RQZ, okay, those are not the same -- that's still a diesel bus, just not the same model. So that's how we differentiate between a model getting one award versus the diesel bus might have several vendors represented, but only one model per vendor, okay? | |||
| And I think our example in AutoChoice will clarify what we're talking about, because people who aren't familiar -- I know some here are familiar with AutoChoice, but if you're not, this will open some eyes about how the government buys, I don't know, Denise, thousands of vehicles, many thousands of vehicles every year. | |||
| Okay. Now, benefits to industry for entering into this program. It's going to be new to some. The biggest advantage, in my estimation, to having a contract awarded, is simply the visibility to our customer base, because you are in the system, so to speak, and your product is available to be seen by everybody who is a registered AutoChoice user. And Chris, we talked yesterday about how many. Did you find out how many registered -- | |||
| MR. DAVIS: Yes, 6,400 active users. | |||
| MR. KNOLL: Okay, 6,400 active AutoChoice users -- | |||
| COURT REPORTER: Sir, could you identify yourself for the record? | |||
| MR. DAVIS: Chris Davis. | |||
| COURT REPORTER: Thank you. | |||
| MR. KNOLL: Chris Davis is GSA. | |||
| Now, you folks on the phone, did you get most of that? | |||
| MR. GIBSON: No. | |||
| MR. KNOLL: Okay, we're talking about the type of -- let's go back a slide here, just a second. | |||
| We're talking about the type of contract being an indefinite delivery, indefinite quantity type of contract with a base plus option years. I know some of you are familiar with that kind of a contract. Multi-vendor awards are possible for each vehicle type, but only one award per model. | And we're going to have an AutoChoice demonstration here in a little while that will be a little bit difficult for you people on the phone to follow. And what I would recommend, for those of you who are not familiar with it, on the phone, is we might have a follow-up phone conversation later in the week, talk a little bit more about that automated ordering system, if you so desire. | ||
| But we'll be going into that here in just a little while. Okay? | |||
| Okay, thank you. | |||
| Okay, next. | |||
| Okay, first of all, benefit to industry is that -- customer awareness. All executive agencies have knowledge of buses under contract through AutoChoice. The agencies then make business decisions relating to the make and model of bus they want to procure. | |||
| When we show you AutoChoice, you will see -- the example that we have, you will see Company A has a product, Company B, Company C, and you'll see the pricing based on the options that are selected. The customer agency then has to justify making a selection. It may not be the lowest-priced vehicle, because you'll see a price range. | |||
| They have to justify their decision based on, maybe the service offered by the company they've selected they know to be better. Maybe past performance of the company they select is known to be better. There are several criteria they can use in selecting their vehicle, not just on price alone, and we'll show you an example of that. | |||
| But they make that business decision based upon their needs and what they want to do. And then the orders are processed electronically, directly to the contractor. And that can be by fax. It can be by email. It can be by electronic data interchange. We can do it all three ways. |
So that methodology takes GSA here, procurement, out of the loop, so to speak, and these orders flow directly to the people who are awarded contracts, a very efficient way to do business.
| And then the invoicing, the invoicing for the buses is handled in much the same way as the invoicing for our non-standard program. | |
| As a matter of fact, let's go to the next slide, if you would. | |
| The buses are inspected -- there's a first production vehicle inspection, like we do now. And that's a very thorough inspection. | |
| Subsequent buses will be inspected primarily for content, once the first production vehicle is inspected. Our GSA inspector, the IOA, will sign off on the bus. We call it a Form 308. The Form 308 is submitted to GSA finance, and the contractor is paid. | |
| There's a difference here in the way that the FTA and federal transit properties pay for buses in GSA, which is an advantage under this program. | |
| FTA -- transit property will withhold some amount of payments, typically, and the bus is delivered, and once all the bugs are worked out and the customer is happy, they'll pay the remaining 20 percent or whatever the hold-back is. | |
| Under this program, once our government inspector signs that acceptance form and your invoice is submitted, you're paid within 30 days. There's no hold-back. So, from a financial standpoint, this program has some advantages over the way the industry typically is used to dealing with the FTA, and that's faster payment. | |
| Any questions? Kind of hitting this at a high level of altitude, but that's one of the differences between this program and a traditional transit bus program, under the FTA. Okay. | |
| Okay, next slide. Now, getting into a little bit about AutoChoice, which is our automotive online vehicle ordering program, allows users to configure buses and choose equipment options and submit bus orders online, check bus order status online. | |
| If it applies, they can view fuel ratings and so forth. And I don't know that there's any requirement here for that on buses, but the configuration -- in this AutoChoice demonstration, you'll see that there are minimum requirements and there are options. | |
| Now, one of the things that I've dealt with in developing these technical requirements is that transit bus manufacturers, Gillig, they've got what, they have thousands of options, thousands of options. And I recognize that. | |
| These purchase descriptions have been simplified to very few options, those that we know to be popular with our government customers and that will probably grow over time. But we are not opening the door right now to a lot of the different option scenarios that develop within the transit properties. So it's rather basic. | |
| And I want to go over those options as we get into the technical specs, so that you can kind of understand where I'm coming from. Because it's a little bit different, at least right now, because we're getting our feet wet in this, and not knowing what all of our customer base really wants. But I'll get into that a little bit later, when we get into the technical side. But right now, I believe it's time, Chris, if you want to go into the AutoChoice demonstration. | Are there any questions before Chris comes up about anything we've covered so far? Anybody on the phone have questions, or anybody out in the audience have questions? |
| If not -- yes, sir. | |
| MR. SHEEHAN: I'm Jerry Sheehan with Gillig. I'm still a little confused on the submission of bids. | |
| So, if we submit a bid for diesels and we are selected as one of the diesel choices -- | |
| MR. KNOLL: Yes. Yes. | |
| MR. SHEEHAN: -- will there be other diesel choices also available? | |
| MR. KNOLL: Could be. Yes. | |
| MR. SHEEHAN: So, it's not a one wins all? | |
| MR. KNOLL: Not necessarily. That's right. This is different. | |
| MR. SHEEHAN: What makes that choice, though, I'm confused on that. How do you make the choice? | |
| MR. KNOLL: Okay, the customer base, and let me suggest this. When we get into our demonstration here, we can go through a scenario. We're actually using a cab with a chassis as an example. The truck industry is kind of similar to the bus industry. They have a lot of options. There are a lot of players. So we've chosen one of our cab and chassis models to demonstrate how this works. And your question is a good question. | |
| The customer agency then makes a decision on which of company A, B, or C, or D, that has got a contract for the bus, which one they want to buy. And they base that either on price or past performance or on maybe they are familiar with a service or there are myriads of reasons why they would pick a bus that may not be the lowest price. |
So, this is a little different than you're used to seeing.
| MR. SHEEHAN: So, a follow up question to that would be, how do you make the decision on what diesel buses will qualify? | |||
| Let's say you get ten different bidders that submit a package that looks acceptable. Who makes that final call, who's going to be on the website for access to the customers? | |||
| MR. KNOLL: Okay, that decision, these are all evaluated from a technical and a commercial standpoint. It could be that all ten, to use your example, could be there. I don't expect there will be ten, but it could be three or four. | |||
| MR. MILLER: Yes, we want to clarify that. Russ Miller. We award at each item level, so we've got three items, okay? We already discussed this. A CNG bus, a diesel-electric hybrid, and a conventional diesel. And what we'll have when the offers come in, there's going to be offers made on specific makes and models, okay? And what we're going to show you is an example of -- when we're talking about makes and models, it will be, for example, a Gillig, that's the make, and what your model is. There will be a New Flyer. There could be potentially -- | |||
| MR. KNOLL: It can be an Orion or -- | |||
| MR. MILLER: -- there could be four or five. We know it's not going to be dozens. And what we're emphasizing is, we cannot prohibit who comes in and makes an offer. Okay? | |||
| And what you'll see here in this example is going to be kind of indicative. If a dealer comes in and bids against an OEM, okay, we'd consider that. We'll get into how we award, since Craig is going to talk about that. | |||
| Okay, so we have had situations where dealers actually will bid against an OEM, and you're going to see that for sure. | |||
| Okay? We don't know how you do business. Some manufacturers don't have dealers, they go direct. That's not our vision. That's industry's vision. | |||
| MR. HILL: Dale with Proterra. | |||
| MR. YOKUM: I think Denise actually had something. | |||
| Did you? | |||
| MS. BANKS: Yes, I just want to clarify something. | |||
| MR. KNOLL: This is Denise Banks. | |||
| MS. BANKS: This is Denise Banks with GSA Automotive. | |||
| What I wanted to share is that while there will be a variety, possibly, of different models and manufacturers, once a contractor is successful and receives a contract award, he or she has the ability to go out and promote to our fellow executive agencies that they have received a contract award, which will allow you to put yourself in their agencies and promote your product. As you will sell your product to them, it helps them make other business decisions. | |||
| So I wanted to help you understand how that basically works out. | |||
| MR. KNOLL: Okay. Any questions? | |||
| MR. HILL: Yes, you said earlier you have an interest in battery electric buses moving forward, yet there's no provision for that here. | |||
| So are we wasting our time to be here for two days, I guess is my question? | |||
| MR. KNOLL: I would say absolutely not. | |||
| MR. HILL: Or is there any way you can add an additional category? Because we're getting approached by a number of GSA customers wanting battery electric buses. | |||
| MR. KNOLL: What I would like to do, and probably outside the meeting, is talk to you about who you've been approached -- we haven't done our market research yet on this generation -- I'm calling it the latest generation of all-electric buses. I know that your product is in service. You consider it to be commercialized. | |||
| MR. HILL: Correct. | |||
| MR. KNOLL: You have competition that is also commercializing or commercialized. And what we want to do, before we can put an item and write a technical requirement for it, we need to do our due diligence and market research, and we're not ready to do that. We haven't done that yet. | |||
| So you're certainly not wasting your time, because we need to understand more about that particular type of product, the charging systems involved, the -- just the technical specifications, if you want to call it that, that go into your product, and there's others out there too. And we haven't done that, so we can't add that now. It won't be part of this solicitation. It would be a separate solicitation for electric buses. It would go -- might be in the same program, it will be handled the same way, everything that we're talking about this morning applies. | |||
| MR. HILL: Okay. | |||
| MR. KNOLL: And I realize that you have been approached, and there are folks interested in zero emission buses like you have, so, does that answer -- that may not be the answer you want to hear right now, but -- | |||
| MR. HILL: I'm just trying to see what the future holds, or how we -- | |||
| MR. KNOLL: Well, it's certainly a member of the family that we've got to consider. | |||
| MR. HILL: Yes. | |||
| MR. KNOLL: No doubt about it. | |||
| MR. HILL: Okay. | |||
| MR. KNOLL: We're just not there today, this morning. | |||
| MR. HILL: Okay. | |||
| MR. KNOLL: Okay? Okay, I want to introduce Chris Davis, who is the branch chief of our program office. | |||
| And he is going to talk a little bit about AutoChoice. And I'll just preface my introduction to him by saying that the screen you see now up here is the introductory screen that all of our customer agencies see when they first begin to procure a vehicle. | |||
| All the government federal specifications are on this page right here. So with that, I'll turn it over to Chris. | |||
| MR. DAVIS: Thank you, Jerry. It's a pleasure to be before you today. | |||
| I just want to let you know about our branch, my branch, the Program Management Branch. Basically, we act as a liaison between the vendors and the customers, so we partner with you to meet the needs of our customers. | |||
| We work surveys every year, so we want to know what our customers want and what they need, so they let us know what they want, and we work hard, we push hard, to move in that direction. | |||
| For my colleagues on the phone, I just want to say a couple of things, because I know they're not able to see this screen. | |||
| And basically what we're looking at, I just want to give you a little bit of history of what we're doing, in terms of GSA Automotive. | |||
| We have, as Jerry said earlier, a number of registered users in AutoChoice, and basically, the ones who are on the phone, basically, we have a screen that's set up. | |||
| It's our online ordering system, which our customers go into to purchase vehicles. | |||
| We try to make this as easy as possible. We make updates annually to our systems to meet the needs of the customers. We're going to go through just what our customers see and how they order vehicles. | But basically, we have 6,457 active registered customers in AutoChoice. In FY `10, we purchased 63,352 vehicles at $1.5 billion dollars. | ||
| The type of vehicles that we offer and what we're looking at now for those of you who are on the phone, we have AFVs, we have ambulances, we have buses, we have trucks, we have sedans, we have wreckers that they can order from. | |||
| And they can basically build their vehicle to specification from beginning to end and submit their orders. | |||
| We try to make this as easy as possible. This is our online ordering system. You can compare contractors. We'll go through that. | |||
| You can research vendors' performance. You can configure your vehicle to your specification. You can choose equipment options, you can choose your colors, your color options. You can see a side-by-side comparison of the vehicle models. | |||
| You can calculate your price so you'll know exactly what you'll be paying. You can submit and you can check your order status after you've submitted your vehicle, so our customers will know the order status. | |||
| And you can check the model year closeouts. Sometimes, you know, you may have a product that you're not offering anymore, and we let our customers know if that gives them an opportunity to plan and organize their vehicle purchasing for that year. | |||
| We have dedicated customer service. We have engineering services that we offer to help you walk through that vehicle to make sure that you are purchasing the vehicle that is right for you. | |||
| Our motto is “Right vehicle, Right price, Great service,” and this is what we aim to do. | |||
| We want our customers to have their best value, because it's up to them to make the best value decision on what they're going to purchase. | |||
| But, again, we are a mandatory source to the federal government, so, in order to purchase a vehicle, they must come through GSA -- for non-tactical. | |||
| We leverage the government's buying power of more than $1 billion in vehicles, in automotive products, annually, at a significant savings. | |||
| So let's go in and let's just look, let's purchase a vehicle. Basically, our customers will come in and they'll see the screen, as you see to the left. | |||
| You can -- you have compare prices, and we won't go through all of it, but it's a lot of different menus that they have to choose from. | |||
| They can -- from our customer agencies, they can actually prepare reports for -- okay, I have a little marker. They can make reports -- that's not it, actually, but they can see how much they purchased, you know, types of vehicles they are buying and what they're doing. | |||
| But we're going to go in now and we're going to purchase a vehicle. You see our categories, for basically, view our selection. | |||
| You're selecting an alternative fuel vehicle, and you'd know what that fuel vehicle was. You could go in and purchase from there. But we're going to go to the Medium and Heavy. | |||
| MR. KNOLL: Medium and Heavy cab and chassis. | |||
| MR. DAVIS: Medium and Heavy cab and chassis, and you'll click there, and you'll see all the Medium and Heavy cabin chassis by item numbers. Basically, this is a model, and we call them our standard item numbers. | |||
| We're going to click on Item 513, which will show you the minimum requirements of the vehicles. | |||
| MR. KNOLL: And you'll notice that there are four makes listed there. | |||
| Okay, go ahead. I'm just going to point out, this particular page, and what -- for a contract that's awarded under this program, this page, I will enter the data, because you don't have access to some of the programs necessary to do this. | |||
| So what you're seeing here, the data will be entered. This is the minimum standard requirements. We have another options page, but there are four: Kenworth, Ford, International, HINO. So there's four manufacturers represented here on this one item. | |||
| Go ahead. | |||
| MR. DAVIS: Okay, so you see the four manufacturers, and you'll see the type of engine. So basically, this is the minimum requirements. | |||
| I guess you can go over it, but it's the minimum requirements that is regulated for this particular vehicle. Transmission, brakes, front axle, on down, electrical, fuel, exterior, the doors, the radios, all the way down. | |||
| Once you've read through that, you will continue, our customers will continue, and basically, this will bring them to the options page. | |||
| From here, they can select the options -- let's just select some options for the types of engines. | |||
| MR. KNOLL: Yes, go ahead, and select a YD54, just for example. | |||
| MR. DAVIS: Okay. So click on that. And as you see here, from your transmission all the way down. | |||
| So basically, they make a decision, a best value decision on their needs for their agency. | |||
| And if for some reason, your option is not there, they have an opportunity to click on that box right there, which is additional requirements, AREQ. | |||
| And what happens, that order will kick out to our engineering services, and for instance, if someone wanted something that they're not seeing on our page, it will kick out -- it will select AREQ, that order will kick out to our engineers, and they will work with the manufacturers in terms of getting a price or if that option is available for them to purchase. | |||
| MR. MILLER: Chris? Russ Miller, I'd like to just expand upon what we just showed you with the options here. | |||
| We automated our Medium and Heavy truck program about five years ago into this system. And you can see, there's a lot -- it looks like there's a lot of options. Okay? These are the most common types of features that our customers are asking for as options, and literally, in this industry, for a cab chassis, every chassis manufacturer apparently has anywhere between five and ten thousand options. | |||
| It's not cost-effective for us, as the government, and for industry to be burdened with offering pricing and configurations on all those options when they're very low opportunity that they're going to be ordered. So we picked the sweet spot. | |||
| So you can kind of see the maturity here. This is a real good example, not to be intimidated. | |||
| I mean, there are a lot of options, but it's really insignificant in the scheme of what's available on the market. | |||
| And that's where Chris is going to expand upon the description of these AREQs where we get, there's something out there commercially available, we don't have it under contract, we have a mechanism for the customers to order. | |||
| MR. GIBSON: Can we ask them to speak up? | |||
| MR. YOKUM: Speak up. | |||
| MR. MILLER: Okay. | |||
| MR. KNOLL: Yes, he couldn't hear. | He was talking about number of options, for those of you on the phone, that we have on the screen, and for those on the phone, what I think I will do, and it's not in the slide program now, but I'm going to take a screenshot of the live presentation that Chris is doing so that I can include those in the slide presentation. | ||
| We're live on the internet right now, but I'll take a screenshot and put it into the PowerPoint presentation so you will see the same thing that we're seeing here. | |||
| But what Russ was saying was that a number of years ago, we put the medium and heavy trucks into our choice program. | |||
| We thought that would be difficult because of all the myriads of options that the medium and heavy truck industry has, but we boiled it down to what was really the sweet spot, the most popular options that had the highest take rates, and it's not as onerous as we thought. It's working very well. | |||
| The transit bus industry is somewhat similar, thousands of options, but it's even simpler, the options that I have in the purchase descriptions are not nearly this large at this time. | |||
| What I anticipate is that if a customer has a need for something that I don't have listed as an option but they know the transit industry has it, it will come through as an AREQ and we will handle it that way. | |||
| And then if it's something that we want to add as an option, as a true option, we'll do that. So we can accommodate people who want something that I don't have as an option in that way. | |||
| For the bus manufacturer, that means that when you get this solicitation, you will quote -- you will make an offer on your bus, and an offer on the options that are listed, because you'll see they're all priced out. | |||
| So we build the price of the bus for the customer on the base vehicle that meets the minimum requirements to a vehicle that has a number of options. | |||
| And so, Chris, let's do that. | |||
| MR. DAVIS: Okay. So, if we see options that are not listed and that comes through as an AREQ and constantly comes through, eventually, they become part of the package. Everybody with me right now? Any questions? | |||
| Okay. So we'll go down, delivery, export. So, let's say, for instance, no AREQs, everybody clicked on their options, now we can compare prices. | |||
| So, now what we see is a side-by-side comparison of the vehicles that are offered. | |||
| MR. KNOLL: Now, Jerry, this is kind of in to your question here. These -- let me, excuse me a second. These four companies have been awarded contracts: F750, HINO, Navistar. Some of them are dealers, there's one OEM there. | |||
| There's their pricing. The customer sees it, everybody sees it. This price is the base price plus the options that were selected. | |||
| Go ahead and page down just a little bit there, Chris. These were the options. | |||
| See, here, this screen the customer sees with each make. And there are pictures if they're available, so they'll see what the vehicle looks like. | |||
| And if an option's not available, for instance, if option CC is not available on the HINO, well, that's not available. That might be a reason why I, as a customer, might select an International, a Navistar. | |||
| But you see the pricing, the price breaks down to the base vehicle,the added options, and GSA surcharge, that's how we get paid for doing our job. And then the selling price to the agency, they see right down there. | |||
| And so that is what the world sees on AutoChoice. | |||
| Yes, Jerry? | |||
| MR. SHEEHAN: Jerry Sheehan, with Gillig. A follow-up. So you're saying that there's an award supplied to each of these vendors. | |||
| The award is only that they're an acceptable component? There's really truly no award until the customer selects the product. | |||
| MR. KNOLL: There's no order. That's right. | |||
| MR. SHEEHAN: Right. So, okay, so that's -- I understand. | |||
| MR. KNOLL: You have the award -- | |||
| MR. SHEEHAN: So again -- so we're at least a viable supplier on a contract -- | |||
| MR. KNOLL: Right. | |||
| MR. SHEEHAN: -- but that doesn't assure us of anything. | |||
| MR. KNOLL: That's right. And that's important to understand. | |||
| MR. SHEEHAN: Okay. That's exactly what I wanted to understand. | |||
| MR. KNOLL: That's right. | |||
| MR. SHEEHAN: All right. | |||
| MR. KNOLL: That's right. | |||
| MR. SHEEHAN: So, if our pricing is $20,000, $30,000 higher than the other guy, it's not a consideration of price, is what I'm hearing? | |||
| MR. KNOLL: It is. The agency -- let me see -- the agency, I am the Forest Service. I want to buy this cab and chassis. I've got a choice between a $54,900 truck and a $71,000 truck. | |||
| I don't have to choose the $55,000 truck. I've got to justify if I want the more expensive one -- why I chose that. | |||
| And, like I said, it might be based on a number of factors that I'll put in my record in case I'm audited why I chose the more expensive truck. | |||
| MR. SHEEHAN: Okay. | |||
| MR. KNOLL: It might be that Kenworth has a service dealer three blocks from where this truck is domiciled. It might be that Navistar, I've dealt with them, they have a good service history, this is a critical application, I'm rolling that into my decision. It may be that Carter Chevrolet has offered the HINO for that line item, it doesn't have the diesel option, so I don't want that. | |||
| MR. SHEEHAN: Okay. | |||
| MR. KNOLL: But yes, to answer your question, and for those on the phone, the question was, you're seeing four different manufacturers. | |||
| Because you have the award does not guarantee that you're going to get an order, but it does mean you're in the game. And if you're not in the game, if you're not in the game, when this solicitation is closed and awards are made, you're not going to be in the game for a long time. | |||
| That's the leverage or the incentive for playing in the game. Because, unlike our non-standard program where we have a bona fide order for x number of vehicles before we can issue a solicitation, this is what I would call betting on to come, based on the past history and the conversations that GSAs had with our agency customers who are waiting for this kind of program to appear. |
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