Purchase Of Bombardier Parts
Meeting Date: July 10, 2002
Subject: Purchase Of Bombardier Parts
It is recommended that the Commission authorize for inventory, additional authority in the amount of $2,500,000 for the additional supply of Bombardier parts for the period ending January 2004 from Bombardier Inc. resulting in a revised upset limit of $5,500,000.
Sufficient funds have been included in the 2002 TTC Operating Budget and will be included in future Operating Budgets as appropriate. Inventory material is charged against budget at the time of issuance from Stores.
At its meeting of January 25, 2001, the Commission approved the award of a three year supply contract for the period of February 2001 to January 2004 to Bombardier Inc. of approximately 280 part types for $3,000,000 for the supply of Bombardier vehicle parts to the Commission.
The subject parts are used on the Commission’s subway, ICTS and streetcar vehicle fleet.
The Commission has added approximately 240 new part types to this contract of which the majority were for the Commission’s T1 subway vehicles. The T1 subway cars began service in 1996 and as they are coming off of warranty, the Commission will need to purchase and stock inventory necessary for the maintenance of these vehicles. The balance of parts added were for H subway cars, ICTS vehicles and streetcars. These new parts account for approximately $1,400,000. An additional $500,000 is required to cover the continued addition of parts yet to be identified and required to support and maintain the Commission’s subway, ICTS and streetcar vehicle fleet for a total of $1,900,000.
Due to lack of historical usage of new T1 parts, usage has been higher than anticipated. Based on this, staff have also reforecasted the demand to the end of the contract in January 2004 and estimate that based on anticipated increase in demand from the original forecast, an additional $600,000 will be required to the upset limit of the contract to ensure Bombardier parts availability for on-going subway, ICTS and streetcar vehicle maintenance.
Bombardier Inc. was contacted to determine if further reduction in price could be obtained. As a result of negotiations, Bombardier has agreed to waive the price increase for year three of the contract (approximately 3%) so that prices will remain firm for year two and year three. Based on anticipated expenditures, this represents a savings of approximately $53,000.
The amendment to this supply contract will result in having sufficient inventory for our operation’s maintenance needs to the end of the contract in January 2004.
June 26, 2002