SP_REQ-10700-00029042_Off the Lot Fleet Vehicle Procurements_Approved.pdf

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REQUEST FOR SPECIAL PROCUREMENT No. REQ-10700-00029042

PART A. Requesting Agency must complete Items 1 through 13.

1. Requesting Agency Name: Oregon Department of Administrative Services, Procurement Services (“DAS

PS”), on behalf of DAS Enterprise Asset Management (“EAM”) Fleet and Parking Services (“FPS”)

2. Date of Request: November 21, 2022 3. Agency Number:107090

4. Agency Contact Name: Melissa Esser 5. Phone: 971-283-4439

6. Type of Request: X Class Special Procurement _____ Contract-specific Special Procurement

7. Time Period Requested: From: January 1, 2023 To: June 30, 2024

8. Total Estimated Cost: $5,000,000

9. Title: Supplies and/or Services to be Acquired:

Light, Medium and Heavy Fleet Vehicles, unused, in-stock (a.k.a. off the lot) for the following brands:

Toyota, Ford, Chevrolet, Chrysler, Greenpower, Jeep, Dodge, Ram, Freightliner, GMC, Honda, Hyundai, International, Isuzu, Peterbilt, Kia, Mitsubishi, Nissan and Subaru.

10. Request, Background, Current Need, and Proposed Contracting Procedure:

a. Request:

DAS PS, on behalf of EAM FPS, is requesting approval of this Special Procurement (“SP”) REQ-10700- 00029042 to provide specific agencies the ability to procure in-stock, off-the-lot unused vehicles on an as-needed basis.

Fleet Vehicle procurements will be made from those contractors currently holding statewide Fleet

Vehicle Price Agreements (collectively “PA Holders”) when availability exists.

Fleet Vehicle procurements will only be made outside of the statewide Fleet Vehicle Price Agreements (collectively “the PAs”) from dealerships not currently holding PAs, when availability does not exist.

o Procurements will be limited to unused vehicles of the same Brands currently available on the PAs.

o Procurements will not be limited to current model year.

State agencies that may procure light fleet vehicles such as pickups, sedans, mini vans and Sport Utility Vehicles (collectively “Light Fleet Agencies”) include:

DAS, EAM FPS Oregon Military Department (“OMD”)

Oregon Dept. of Agriculture (“ODA”) Oregon State Police (“OSP”)

Oregon Dept. of Forestry (“ODF”) Oregon Dept. of Transportation (“ODOT”)

Oregon Liquor Control Commission (“OLCC”) Oregon Travel Information Council (“OTIC”)

Oregon Lottery (“OL”)

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State agencies that may procure medium and heavy fleet vehicles such as Chevrolet Silverado, Ford Freightliner and International trucks (collectively “Medium/Heavy Fleet Agencies”) include:

Oregon Dept. of Corrections (“ODOC”)

Oregon Dept. of Fish and Wildlife (“ODFW”)

Oregon Dept. of Parks and Recreation (“ODPR”)

b. Background:

November 24, 2020, DAS PS issued Request for Proposals (“RFP”) #DASPS-2295-20 on the Oregon Procurement Information Network (“ORPIN), the state’s eProcurement system of record at that time, which sought to award multiple PAs for fleet vehicles. Several timely submitted proposals were received and evaluated in accordance with the evaluation criteria set out in the RFP. Twenty-two (22) awards were issued based on vehicle brands including:

Chevrolet Isuzu

Chrysler Jeep

Dodge Kia

Ford Mitsubishi

Freightliner Nissan

GMC Peterbilt

Greenpower Ram

Honda Subaru

Hyundai Toyota

International

The PAs are in place for the procurement of unused, current model year vehicle brands and are heavily utilized by both state agencies and Oregon Cooperative Procurement Program (“ORCPP”) members.

ORCPP eligible entities (members) include:

Units of local government – cities, counties, school districts, etc.

Special districts – fire, water, vector control, health, etc.

Oregon universities and community colleges

Qualified rehabilitation facilities

American Indian Tribes and agencies of American Indian Tribes

Certain qualifying, public benefit corporations

State agencies not subject to Oregon Revised Statutes (“ORS”) 279A.050 and Oregon Administrative Rules (“OARs”) such as: OL, OTIC, Treasury, and Secretary of State.

State agencies rely on vehicles of various types to successfully carry out their missions as set out in statute.

Currently, there is a major, worldwide vehicle supply shortage due in large part to the shortage of semiconductor chips and other commodities needed for the manufacturing of new vehicles. As a result, EAM FPS and other state agencies with fleets have experienced multiple problems acquiring new vehicles such as:

vehicle ordering windows closing within minutes of opening;

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Following are some specific examples of vehicle procurement difficulties EAM FPS has experienced in the last few years:

Chevrolet canceled 74 out of 110 ¾-ton and 1-ton trucks that were ordered.

Ford canceled 70 model year 2022 ½-ton trucks that were ordered in December 2021 and instructed EAM FPS to reorder 2023 models. This means the 70 trucks will arrive a year or more past the original order date and at a 13% price increase.

Toyota canceled 210 of the 250 mixed vehicle types ordered for the current model year due to the manufacturer rationing vehicles across its customer base, predicated on what it can produce.

Order banks are used by manufacturers to identify when dealerships can submit government orders for vehicles to be manufactured. Many 2022 and 2023 order banks opened but, due to demand and extended lead times for delivery, closed within days. PA Holders have also been compelled to cancel orders made within the order bank due to manufacturing cut offs for certain brands and models. This has – and continues to - make it difficult to predict which orders will actually get delivered.

Vehicle supply issues are predicted to improve mid to late 2024 or early 2025. Meanwhile, the Oregon Legislature approved close to 3,000 additional positions in state agencies over the past two budget cycles, which increases the need for state vehicles. With the backlog of unfulfilled vehicle orders and hiring actively progressing, agencies with fleets are unable to procure vehicles in sufficient quantities for new staff. Additionally, replacements for current end-of-life vehicles have been delayed, resulting in increased maintenance costs for older and/or higher mileage vehicles.

c. Current Need:

While agencies continue to prioritize work, adjust vehicle deployment across existing resources, and use alternative vehicle sources such as short-term rentals and private mileage reimbursements, obtaining new state-owned vehicles is still the most viable and cost-effective way to manage state business travel.

Agencies that need vehicles for continuing operations or to support new assignments or programs at the direction of the Governor or Legislature must be able to immediately procure new vehicles from any PA Holder or (non-contracted) dealership when available stock has been located.

d. Proposed Contracting Procedure:

1. As required by OAR 125-247-0287, DAS PS, on behalf of EAM FPS, will issue a public notice (“Notice”) of the approved SP on OregonBuys, the State’s current eProcurement system of record, for a period of seven (7) calendar days.

2. The Notice will include provisions that any affected party may protest the approval of the SP.

3. DAS PS, working with EAM FPS, will respond to and resolve all protest(s), if any.

4. If no protests to this SP are received or sustained, the agencies set out in section 10.a above, or DAS PS on behalf of EAM FPS, may pursue the Alternative Procurement Procedures set out in bulleted items 5.a and 5.b below, as necessary.

5. Proposed Alternative Procurement Procedures:

If vehicle inventory does not exist under the PAs, then Light Fleet Agencies and Medium/Heavy Fleet

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Agencies may acquire Fleet Vehicles using Step 1 or Step 2 set out below.

Regardless of dollar value (Step 1 or Step 2), all Light Fleet Agencies and Medium/Heavy Fleet Agencies will comply with Statewide Policy #107-009-0030, Business Equity, Inclusion and Engagement in Public Procurement, the procedure set out in Statewide Procedure #107-009- 0030_PR, and all applicable law.

a. Step 1: Procurements Under $250,000

i. Once a vehicle(s) is located, a Light Fleet Agency or Medium/Heavy Fleet Agency may immediately issue one of the following ordering instruments:

Special Procurement Purchase Order Contract (“SPPOC”), in substantially the form attached hereto as “SP_Attachment-1”.

Purchaser Order (“PO”) through OregonBuys and attach the terms and conditions from the SPPOC.

ii. Prior to issuing a SPPOC or PO, and Pursuant to OAR 137-045-0015, Light Fleet Agencies or Medium/Heavy Fleet Agencies will work with Oregon Department of Justice (“DOJ”) and obtain legal sufficiency approval for the terms and conditions submitted with the SPPOC or PO for procurements between $150,000 and $250,000.

iii. In compliance with Statewide Policy #107-009-0030, any Light Fleet Agency or Medium/Heavy Fleet Agency using this SP is required to post the award in OregonBuys or the Electronic Procurement System approved by the State Chief Procurement Officer

(“CPO”).

iv. Light Fleet Agencies and Medium/Heavy Fleet Agencies will adhere to the ‘Under $250,000 Process’ set out in the Buyers Guide for Procuring Unused Off-the-Lot Vehicles, attached hereto as “SP_Attachment-2”.

b. Step 2: Procurements Over $250,000

i. For Fleet Vehicle procurements over $250,000, Light Fleet Agencies and Medium/Heavy Agencies will work directly with DAS PS.

ii. DAS PS will engage DOJ and obtain legal sufficiency approval for the terms and conditions accompanying the SPPOC or PO.

iii. In compliance with Statewide Policy #107-009-0030, any Light Fleet Agency or Medium/Heavy Fleet Agency using this SP is required to post the award in OregonBuys or the Electronic Procurement System approved by the State CPO.

iv. Light Fleet Agencies and Medium/Heavy Fleet Agencies will adhere to the ‘Over $250,000 Process’ set out in the Buyers Guide for Procuring Unused Off-the-Lot Vehicles (SP_Attachment-2).

11. Justification for use of Special Procurement: Describe the circumstances that justify the use of a Special Procurement. Attach relevant documentation.

The backlog of vehicles, in the context of supply and demand, caused by 2020 and 2021 COVID related shutdowns and supply chain shortages, along with global conflicts, are continuing to cause severe availability issues for the next year or more.

PA Holders are unable to provide the vehicles requested by state fleet agencies in the required timeframes.

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Light Fleet Agencies and Medium/Heavy Fleet Agencies need a procurement process through which vehicles that are most vital for continued services and operations can be quickly acquired as they become available on the open market.

The current PAs enable procurement of unused, current model year vehicles from PA Holders’ local lots. However, availability from these lots may not include current model year vehicles. This SP will enable procurement of unused vehicles from a previous model year.

12. Findings to Satisfy the Required Standards: This proposed special procurement:

X (a) will be unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts because:

This SP will still require state agencies to first seek procurement through the Fleet Vehicle PAs.

If vehicles are not available from PA Holders, this SP will actually increase competition by providing the opportunity for state fleet agencies to engage more dealerships regarding potential sales.

The Proposed Alternative Procurement Procedures set out in Section 10.d above may also help PA Holders to obtain additional vehicle inventory. Lost sales to state fleet agencies may open opportunities for PA Holders and manufacturers to engage in productive conversations that lead to increased vehicle shipments and availability.

and

(b)(i) will result in substantial cost savings to the contracting agency or to the public because:

or

X (b)(ii) will otherwise substantially promote the public interest in a manner that could not practicably be realized by complying with the requirements of ORS 279B.055, 279B.060, 279B.065, or 279B.070, or any rules adopted thereunder because:

Agencies are spending substantial additional funds repairing end-of-life vehicles to keep them running instead of replacing them, renting at high costs for substitute vehicles, and reimbursing private mileage to employees where a less costly state vehicle cannot be provided.

Vehicles are vital to successful delivery of state government services to Oregonians including public safety, child welfare and natural resource management. Having state vehicles available for staff to use ensures the continuation of these vital services. The short, 18-month term requested in this SP will potentially provide more opportunities for Light Fleet Agencies and Medium/Heavy Fleet Agencies to acquire new, off-the-lot vehicles needed to carry out their duties.

13. Signature: The actual signature of the Agency Head or designee (e.g., Designated Procurement Officer) is not required on the Request if it is submitted through OregonBuys. Agency may elect to attach a signed Request.

Signature: e.g. Electronically in OregonBuys _________________ Type Name: Date:

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PART B. The Department of Administrative Services completes Part B.

STATUTORY AND RULE AUTHORITY:

ORS 279B.085(2) states the Director of the Department of Administrative Services may approve a special procurement if the Director finds that a written request submitted under ORS 279B.085(4) demonstrates that the use of a special procurement as described in the request, or an alternative procedure prescribed by the Director will:

(a) Be unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts; and

(b)(A) Result in substantial cost savings to the contracting agency or to the public; or

(B) Otherwise substantially promote the public interest in a manner that could not practicably be realized by complying with requirements that are applicable under ORS 279B.055, 279B.060, 279B.065 or 279B.070 or under any rules adopted thereunder.

OAR 125-246-0170 delegates the authority of the Director of the Department of Administrative Services to approve special procurements to the State Chief Procurement Officer. OAR 125-247-0285 through 125- 247-0288 implement ORS 279B.085.

OAR 125-247-0700(2) Protests and Judicial Review of Special Procurements designates the State Chief Procurement Officer as the Contract Review Authority.

FINDINGS: The findings are accepted, adopted, and incorporated by reference herein.

CONDITIONS OF APPROVAL:

1. Notice Period. The Authorized Agency shall post the Public Notice on ORPIN. The Special Procurement may not be used until after the completion of the seven (7) day notice period required pursuant to OAR 125-247-0287(4), and either:

a. No Written protests are received by the Contract Review Authority, State Chief Procurement Officer, from an Affected Person in response to the notice, or

b. If any protest is received during the notice period, then not until:

i. the State Chief Procurement Officer or delegate issues a written disposition of the protest in accordance with ORS 279B.400 and OAR 125-247-0700 and OAR 137-047-0700, and

ii. confirms in writing the first possible date of use of the Special Procurement.

2. ORS 279A.165 Requirements. Agency shall comply with the requirements of ORS 279A.165 and OAR 125-247-0287(12) regarding a report about this Special Procurement. Agency shall use a form and follow the instructions provided by the State Chief Procurement Officer or delegate.

APPROVED:

Kelly Mix, State Chief Procurement Officer Date Department of Administrative Services