Commercial Vehicles Acquisition and Management - March Pt1

Acquisition and Management of Commercial Vehicles

London local authori es spend £70M each year on commercial vehicles and

associated parts. With the addi on of maintenance and repairs, the total

business is valued at about £100M. The report, Acquisi on and Management

of Commercial Vehicles – A New Approach for London published in May

2009, iden fied that cashable savings of around 10% could be made from

taking a more joined up approach with London authori es:

• agreeing core specifica ons for vehicle ranges

• introducing three year forward planning schedules for vehicle replacement

• brigading their future requirement

• deploying collabora ve purchasing arrangements which support a com-

plete range of acquisi on methods (e.g. outright purchase /leasing)

News for the project March 2011

Will Tuckley Chief Execu ve

London Borough of Bexley

Project Sponsor “… those responsible for

fleet management or vehicle

opera ons in your borough

should pursue the opportu-

ni es for savings by par ci-

pa ng fully in the efforts to

agree common specifica-

ons and resource sharing.”

Part 1 of 2 in March for More news and dates

What is this project?

Commercial fleet represents a significant expenditure for many local authorities whether run in-house or part of an outsourcing arrangement. It covers the acquisi-tion, management, and disposal of vehicles such as refuse freighters, panel vans and derivatives, sweepers, mini buses and the running of workshops and fleet manage-ment. Full details [here]

What are the benefits?

Introduce London-wide procurement for commercial vehicles

Core specifications for vehicle types

Ability to standardise in product ranges

Use of e-Auctions from next generation framework contracts to acquire new fleet

More viable units for private sector involvement or the use of shared services

Shared workshop facilities and sale of surplus capacity, releasing capital resource

Potential for double shifts

Vehicle sharing

Shared higher standard transport management

Help eliminate widespread waste by establishing excellent transport policy

Route planning and reduction of dead leg mileage

Develop and drive through better data standards to optimise vehicle utilisation

Collaboration on fleet associated skills training

Options to work cross sector with NHS and Police / Fire and Rescue

Draw back revenue and cost from external transport-using contractors

London Local Authorities Commercial Vehicle Survey Transtech Consultancy Services This report was commissioned by Capital Ambition’s project board for the Acquisition and Management of Com-mercial Vehicles. Its findings and conclusions are helping to drive the project forward. Here’s some info: All bar two London local authorities took part with over 90% participating fully, showing their commitment to the Project and belief in the outcomes. As a consequence the interpretations which have now been possible have considerable authority. The report contains details of over 5,100 commercial vehicles in the fleets of the 31 Lon-don boroughs which responded (an exceptional return). It was estimated that the capital value of directly operat-ed vehicles at current replacement costs is over £200 million. However, if all 33 boroughs took into account the vehicles which are in use on their behalf and over which they have influence then this would mean a total popula-tion of over 16,000 vehicles, and the capital value would be in the order of £600 million. The report predicts that each year, based on the very modest savings of 5% that could be expected by standardising and combining pur-chases of replacement vehicles, on the directly operated vehicles there would be savings of £1 million and on the full 16,000 vehicle fleet this would reduce prices by £3 million. 9 named Boroughs identified as having an immi-nent replacement demand of 717 vehicles within the next 12 months would spend up to £15.8m. 5% saving on this figure would be almost £800,000. Some of the key findings that emerged from this report were: ● Some councils appear to decide on their own fleet needs without having knowledge of, or taking account of, the most cost-effective methods of acquisition or continuing management. This seems to have resulted in a num-ber of boroughs being unable to identify exactly what they operate, or when or how they either acquired or will replace vehicles. As well as being a probable cause of wasted money, it exposes the council potential significant risk with respect to its statutory obligations for the operation of vehicles and duty of care to its employees. ● There appears to be little evidence for shared fleets or resources across London, even though the scope for this has long been recognised. The close proximity of expensive workshop facilities in the boroughs was demon-strated, and by detailing capacities it was possible to speculate on the viability and benefits for sharing. Much work is presently underway with the boroughs for sharing workshops, operating centres, routes, fleet operation computer systems, etc. These efforts must be supported and encouraged so that the greatest benefit can be ob-tained from collaboration. ● London local authorities would be replacing up to 600 vehicles including commercial vans, mini-buses and sweepers in 2011/12. These and other vehicles such as refuse freighters lend themselves to standardisation and purchase via e-Auctions. The benefits of this approach are significant and the professional advice that we are re-ceiving suggests that an e-Auction on that scale, as well as offering other forms of efficiency, would reduce unit costs to a level that no individual authority or fleet outsourcing provider would be able to match.

The report is available now [here]

ALTO has been established for more than thirty years as the forum for the senior transport officers from the Boroughs. Transport Officers from the thirty-two London Boroughs and the Corpo-ration of London, together with the GLC and ILEA, created ALTO as a body to share experiences and problems and to pursue common aims. It exercises significant influence over the future of transport in London. The Fleet and Transport managers in the 33 Boroughs have enormously wide responsibilities to ensure that vehicles are available to deliver the essential services, and every service requiring mobility. Depots, fuel, maintenance, repairs, legal-ity, buses, cleansing, congestion… These, and more, all come under the purview of ALTO members. No Borough could op-erate without their professional expertise. ALTO is partnering the project for Acquisition and Manage-ment for Commercial Vehicles, its members playing key roles in the support of its development and success. It was ALTO members who provided the extensive data for the explora-tion and analysis for the fleets of the London Boroughs.

Benefits of using e-auctions When managed well, e-auctions help to deliver very com-petitive contracts, which are both commercially sustaina-ble and provide high quality goods and services. Additional benefits from using e-auctions are: Transparency to all parties It is a legally compliant process The process discipline supports high quality procurement

execution Suppliers have clear visibility of selection criteria and

competitive pricing levels The potential to condition and shape the marketplace. Can e-auctions work when there are multiple organisations? Yes. E-auctions are being used within government to bring together multiple participants, or stakeholders, who wish to buy similar goods or services. By grouping to-gether they are able to benefit from each other’s skills and experience, go to market with more business and ultimately get a better deal. To cater for specific differ-ences of require-ments within a par-ticular category, e-auctions will divide goods or services into ‘lots’, allowing the bespoke require-ments to be met, whilst still benefiting from being in a grouped e-auction. What does "committed" vol-ume mean? Committed volume is the best estimat-ed forecast of the volume of the good or service that a participant requires. It is important that it is as accurate as possible so that the market has good visibility of likely demand; however during the procure-ment it is made clear to suppliers that it is a forecast, and so may change.

Can I withdraw from an e-auction once the procurement has started? Participants can withdraw from the e-auction, and in some cases right up to 48 hours before the e-auction is held. The peri-od of time when withdrawals can happen should be agreed by the e-auction team and is the time required to inform the suppliers of any changes in the volumes - as this may have an impact on their bid. Conversely, additional participants can join the e-auction. Again, the particular e-auction will determine the time period for ‘late joiners’, often up to 48hrs before the e-auction event to allow for suppliers to be fully informed. Joining an e-auction at this late stage means there is no oppor-tunity for the additional participants to alter the specification of what is being procured.

and

all a

bout

them

How eAuctions work eAuctions are also referred to as reverse auctions in which suppli-ers offer progressively lower bids in order to win a contract; these have been used by procurement specialists since 1995. E-auctions are different from con-ventional tendering processes as they are conducted online and allow bidders to see the most competitive bid, and to re-bid in response. Bidders are all pre-qualified and quality scores are typically built into the auction process as bid weightings. Bid-ding may last a few minutes, or many hours.

eAuctions for this project are being

prepared

Are you joining in?

Phil Keymer – Project Manager 

01872 580238     07528 230955  ca‐[email protected] 

Phil has extensive

transport experience

as a senior manager

in London Local Au-

thori es and in a

range of other indus-

tries. His crossover

working with partner

authori es, legislators and contractors is very

broad. For 15 years as Secretary of the Associa-

on of London Transport Officers he influenced

legisla on on CCT and co-wrote the main guid-

ance for the London Boroughs group on vehicle

maintenance. He was twice a Council Member

for the interna onally renowned Ins tute of

Road Transport Engineers. He maintains an

extensive network of colleagues in Local Govern-

ment and in the contrac ng world.

Best Prac ce Guide on Vehicle Acquisi on

Fleet Audits Ltd was appointed by the Project Board

to produce this guide as advice and guidance mainly

for decision-makers who do not have specific ex-

per se in transport or fleet management.

This Guide was developed to support and

assist a wide range of public sector/ Local

Authority decision-makers in respect of vehi-

cle acquisi on. Vehicles form an important

part of the expenditure and func onality of

most organisa ons and the range of vehicle

types and acquisi on op ons must be consid-

ered carefully to op mise expenditure, effi-

ciency and flexibility of opera on.

Vehicle use is also an important part of the

environmental footprint of an organisa on

and careful vehicle selec on is an essen al

part of mee ng green and emissions targets.

The full guide will be available shortly.

A large propor on of London

Boroughs have already com-

mi ed their full support to this

enterprise. If you haven’t con-

firmed your par cipa on yet,

our Customer Services Repre-

senta ves would like to hear

from you. Soon.

Needy customers for best prac ce acquisi on