BOARD MEETING DATE: March 2, 2007
AGENDA NO. 11

Issue Solicitations and Award Contracts under Phases I & II of FY 2006-07 AB 2766 Discretionary Fund Work Program and Modify FY 2004-05 Contract Award

SYNOPSIS:

At its February 15, 2007 meeting, the MSRC approved the release of two solicitations providing $1 million to implement the Off-Road Vehicle Diesel Emission Control System Demonstration Program under Phase I of the FY 2006-07 Work Program. The RFQ will qualify diesel emission control manufacturers and the Program Announcement will allow off-road fleets to participate in the demonstration program. The MSRC also approved contract awards for the purchase or repower of urban transit buses with advanced low-emission heavy-duty natural gas engines meeting 0.2 gram NOx 2010 standards. Under Phase II, the MSRC approved release of a Program Announcement for the purchase or repower of refuse trucks with natural gas engines meeting 0.2 gram NOx 2010 standards. Finally, the MSRC approved a contract modification for a FY 2004-05 award. The MSRC seeks AQMD Board approval to issue solicitations and award contracts under Phases I & II of the FY 2006-07 AB 2766 Discretionary Fund Work Program as well as the FY 2004-05 contract modification. (Review: Mobile Source Air Pollution Reduction Review Committee, February 15, 2007)

RECOMMENDED ACTIONS:

1. Approve the issuance of the Program Announcement (#PA2007-11) for the Off-Road Diesel Construction Equipment Retrofit Demonstration Program, providing funding up to $1 million under Phase I of FY  2006‑ 07 Work Program, as described in this letter;
2. Approve the issuance of the Request for Qualifications (#Q2007-08) for the Off-Road Diesel Construction Equipment Retrofit Demonstration Program, to qualify manufacturers to participate in the above demonstration, as described in this letter;
3. Approve the award of four contracts totaling $3.34 million (using $2 million from funding originally allocated to this Program and an additional $1.34 million in unallocated funds) as part of the Advanced Low-Emission Urban Transit Bus Engine Program under Phase I of FY 2006-07 AB 2766 Discretionary Fund Work Program, as described in this letter and as follows:

1. A contract with City of Los Angeles World Airports in an amount not to exceed $420,000 for up to 21 new natural gas shuttles;
2. A contract with City of Los Angeles Department of Transportation in an amount not to exceed $2,040,000 for up to 102 new natural gas buses;
3. A contract with Orange County Transportation Authority in an amount not to exceed $800,000 for up to 40 new natural gas buses; and
4. A contract with Palos Verdes Transit in an amount not to exceed $80,000 for up to 4 bus repowers.

4. Approve the issuance of the Program Announcement (#PA2007-10) for Incentives for the Purchase of Advanced Low-Emission Heavy-Duty Natural Gas Engines for Solid Waste Collection Vehicle Operators, providing funding up to $1.728 million under Phase II of FY  2006‑ 07 Work Program, as described in this letter;
5. Approve modification to City of Long Beach’s pending contract, #PT05058, to provide funding for 8 or more NOx and PM particulate reduction devices in an amount not to exceed $144,000, reimbursing only the incremental cost above mandated requirements;
6. Authorize MSRC the authority to adjust contract awards up to five percent, as necessary; and
7. Authorize the Chairman of the Board to execute new or modified contracts under FYs 2004-05 and 2006-07 AB 2766 Discretionary Fund Work Programs, as described above and within this letter.

Gwenn Norton-Perry
Chair, MSRC

Background

In September 1990 Assembly Bill 2766 was signed into law (Health & Safety Code Sections 44220-44247) authorizing the imposition of an annual $4 motor vehicle registration fee to fund the implementation of programs exclusively to reduce air pollution from motor vehicles. AB 2766 provides that 30 percent of the annual $4 vehicle registration fee subvened to the AQMD be placed into an account to be allocated pursuant to a work program developed and adopted by the MSRC and approved by the AQMD Governing Board.  

The MSRC’s FY 2006-07 AB 2766 Discretionary Fund Work Program was broken into two phases. Phase I included a set aside of $1 million to implement an Off-Road Vehicle Diesel Emission Control System Demonstration Program. This “Showcase Program,” which is in partnership with CARB, is intended to demonstrate on-road or new emission control systems that will earn CARB verification for use on off-road construction equipment as well as achieve significant near-term emission reductions from off-road construction equipment. The MSRC considered two solicitations to implement this Showcase Program at its February 15, 2007 meeting. Further details are described below in the Proposals section.

On October 6, 2006, the MSRC released a Program Announcement (#PA2007-06) providing $2 million in incentives for the purchase of advanced low-emission heavy-duty natural gas engines for urban transit bus operators. For each engine certified to the 2007 optional 0.2 gram NOx per brake horsepower-hour standard, which will be the standard in 2010, the MSRC would provide $20,000 for qualifying bus engines on a first-come, first-served basis. Four applications were received by the PA closing date of January 19, 2007. At its February  15, 2007 meeting, the MSRC considered its Technical Advisory Committee’s recommendations on the four applications. Further details are described below in the Proposals section.

Based on the response of the above program, at its January 18, 2007 meeting, the MSRC directed its Technical Advisory Committee to develop a new solicitation under Phase II of the FY 2006-07 Work Program intended to provide incentives towards the purchase or repower of refuse collection vehicles with engines meeting 2010 standards. At its February 15, 2007 meeting, the MSRC considered a Program Announcement providing $1.728 million for incentives towards the purchase of advanced low-emission heavy-duty natural gas engines certified to the 2007 optional 0.2 gram NOx per brake horsepower hour standard for solid waste collection vehicle operators. Further details are described below in the Proposals section.

In the MSRC’s FY 2004-05 Work Program funding was provided to retrofit heavy-duty vehicles with aftertreatment devices. Devices reducing particulates were eligible for $8,500 per retrofit whereas devices reducing both particulates and NOx were eligible for $18,000 per retrofit. The City of Long Beach was awarded $144,000 to install 8 devices reducing particulate and NOx. At its February 15, 2007 meeting, the MSRC considered a contract modification request from the City of Long Beach. Further details are described below in the Proposals section.

Outreach for New Solicitations

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFQ and PAs and inviting bids will be published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers to leverage the most cost-effective method of outreach to the entire South Coast Basin.

Additionally, potential bidders may be notified utilizing AQMD’s own electronic listing of certified minority vendors.  Notice of the RFQ and PAs will be mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, the State of California Contracts Register website, and placed on the Internet at AQMD’s Web site (http://www.aqmd.gov/ where it can be viewed by making menu selections “Inside AQMD”/“Employment and Business Opportunities”/“Business Opportunities” or by going directly to http://www.aqmd.gov/rfp/index.html).  Information is also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

All three solicitations will also be placed on the MSRC's website at http://www.cleantransportationfunding.org/, and targeted mailings to fleets and retrofit device manufacturers will be done to the extent possible. Additional outreach to such groups as the Construction Industry Air Quality Coalition will also be conducted for the Showcase Program.

Outreach for Closed Solicitation

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the Program Announcement #PA2007-06 and inviting bids was published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers to leverage the most cost-effective method of outreach to the entire South Coast Basin.

Additionally, potential bidders may have been notified utilizing the Los Angeles County MTA Directory of Certified Firms, the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; and AQMD’s own electronic listing of certified minority vendors.  Notice of the RFP/RFQ was mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, and placed on the Internet at AQMD’s Web site (http://www.aqmd.gov/).  Information was also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724. Program Announcement #PA2007-06 was also placed on the MSRC's website at http://www.cleantransportationfunding.org/.

Bidders' Conferences

A Bidders’ Conference will be conducted for the Showcase Program on Thursday, March  22, 2007, in Conference Room CC6, at 1:00 p.m. for RFQ2007-08 and at 2:00 p.m. for PA2007-11. The MSRC is conducting another Bidders’ Conference for PA2007-10 on Wednesday, March 21, 2007, at 1:30 p.m. in Conference Room CC2.

A Bidders’ Conference for #PA2007-06 was conducted on Wednesday, November 1, 2006, at 1:30 p.m. in Conference Room CC2.

Proposal Evaluation and Panel Composition

Proposals received for the solicitations (further outlined under the Proposals section) were (or will be) evaluated by members of the MSRC-TAC, which consists of a diverse group of individuals appointed by participating members as prescribed in the Health & Safety Code.

Proposals

At its February 15, 2007 meeting, the MSRC considered several recommendations from its Technical Advisory Committee and took unanimous action as detailed further below.

As mentioned in the Background section, as part of its Phase I FY 2006-07 Work Program, the MSRC set aside $1 million to implement an Off-Road Vehicle Diesel Emission Control System Demonstration Program. The Showcase Program, which is in partnership with CARB, is intended to demonstrate currently verified on-road or new emission control systems on off-road construction equipment with the goal of earning CARB verification as well as achieve significant near-term emission reductions from off-road construction equipment. The MSRC unanimously approved the release of two solicitations to implement this Showcase Program. The RFQ (#Q2007-08) will qualify diesel emission control manufacturers, and the Program Announcement (#PA2007-11) will allow off-road fleets to participate in the demonstration program. The PA has an application period from April 3, 2007 through June 29, 2007, and the RFQ, March 2, 2007 through May 31, 2007. Eligible fleets will receive funding up to 100% of the cost of purchasing and installing the retrofit devices. Funding is limited to a  maximum of $200,000 per entity to ensure broad participation. Periodic device monitoring will be conducted by CARB at no cost to the participating construction equipment owner. CARB along with the MSRC will endeavor to match retrofit devices from manufacturers deemed qualified through the RFQ with owners and their off-road equipment.

As also mentioned in the Background section, the MSRC released a $2 million Program Announcement (#PA2007-06) on October 6, 2006, providing incentives toward the purchase of advanced low-emission heavy-duty natural gas engines for urban transit bus operators. The Program provided $20,000 on a first-come, first-served basis for bus engines certified to the 2007 optional 0.2 gram NOx per brake horsepower-hour standard, which will be the standard in 2010. Four applications were received by the PA closing date of January 19, 2007. At its February 15, 2007 meeting, the MSRC unanimously awarded full funding totaling $3.34 million (using $2 million from funding originally allocated to this Program and an additional $1.34 million in unallocated funds) as part of the Advanced Low-Emission Urban Transit Bus Engine Program under Phase I of FY 2006-07 AB 2766 Discretionary Fund Work Program. Details of the contract awards are as follows:

1. A contract with City of Los Angeles World Airports in an amount not to exceed $420,000 for up to 21 new natural gas shuttles;
2. A contract with City of Los Angeles Department of Transportation in an amount not to exceed $2,040,000 for up to 102 new natural gas buses;
3. A contract with Orange County Transportation Authority in an amount not to exceed $800,000 for up to 40 new natural gas buses; and
4. A contract with Palos Verdes Transit in an amount not to exceed $80,000 for up to 4 bus repowers.

Under the Phase II FY 2006-07 Work Program, as also mentioned in the Background section, the MSRC decided to expand the above program to offer incentives for refuse collection engines meeting the 2010 standard. At its February 15, 2007 meeting, the MSRC unanimously approved release of a Program Announcement (#PA2007-10) providing $1.728 million towards the purchase or repower of advanced low-emission heavy-duty natural gas engines certified to the 2007 optional 0.2 gram NOx per brake horsepower hour standard for solid waste collection vehicle operators. The Program Announcement application period is April 3, 2007, through June 29, 2007. There is a geographic minimum of $256,000 per county and funds will be awarded on a first-come, first-served basis. Applications received the first day will be considered equal and funding will be pro-rated if first-day applications exceed the funding target. If each county does not request their full geographic minimum by the closing date, the funds can be used for applications from other counties on a first-come, first-served basis.

Finally, as noted in the Background section, the MSRC’s FY 2004-05 Work Program included funding to retrofit heavy-duty vehicles with aftertreatment devices. Devices reducing particulates were eligible for $8,500 per retrofit whereas devices reducing both particulates and NOx were eligible for $18,000 per retrofit. The City of Long Beach was awarded $144,000 to install 8 devices reducing both particulate and NOx, but has not yet executed its contract. The MSRC’s Program required that applicants must demonstrate that the proposed deployment of diesel exhaust retrofit devices is beyond mandated obligations. Although the City has identified solid waste collection vehicles for retrofit, state regulation now requires that these vehicles be retrofitted with particulate reduction devices by December 31, 2007. The MSRC’s practice has been to allow work to be performed up to one year before it is required by regulation. The City requested that the MSRC determine that installing aftertreatment devices reducing both particulates and NOx is above and beyond the regulation, which only requires aftertreatment devices reducing particulates. At its February 15, 2007 meeting, the MSRC considered the request, but determined they would not fund the portion of the project which is legally mandated. The MSRC unanimously agreed to reimburse the incremental cost of the devices, calculated on a per-device basis as the actual installed cost of each device, not to exceed $18,000, minus $8,500, which is the cost of the mandated device. In anticipation of this decision, the City had asked the MSRC to allow them to install more than 8 aftertreatment devices up to the original award of $144,000. The MSRC unanimously approved this request.

In some cases the full amount requested in an application or proposal is not recommended for funding or the proposed scope of work has been modified. This is consistent with the MSRC's administrative policies, which allow the MSRC to approve a portion of a proposer’s scope of work and/or funding request. In those cases where the proposed funding level or scope of work has been modified by the MSRC, and the proposer cannot perform the project as approved, the MSRC may rescind the funding commitment and retain the funds in the Discretionary Fund for future work programs.

The MSRC respectfully requests the AQMD Board’s approval of the above solicitations and contract awards under Phases I & II of the FY 2006-07 Work Program and the modification of the FY 2004-05 contract award. The MSRC also requests authority to adjust the funds allocated to each project specified in this Board letter by up to five percent of the project’s recommended funding. The Board has granted this authority to the MSRC for all past work programs. Finally, the MSRC requests the Board authorize the AQMD Chairman of the Board the authority to execute all agreements described in this letter.

Resource Impacts

The AQMD acts as fiscal administrator for the AB 2766 Discretionary Fund Program (Health & Safety Code Section 44243). Money received for this program is recorded in a special revenue fund (Fund 23) and the contracts will be drawn from this fund. These contracts will have no fiscal impact on the AQMD’s operational budget.

Attachments (EXE 1,527kb)

1. #PA2007-11: Off-Road Diesel Construction Equipment Retrofit Demonstration Program
2. #Q2007-08:  Off-Road Diesel Construction Equipment Retrofit Demonstration Program
3. #PA2007-10:  Incentives for the Purchase of Advanced Low-Emission Heavy-Duty Natural Gas Engines for Solid Waste Collection Vehicle Operators