BOARD MEETING DATE: October 3, 2008
AGENDA NO. 15

PROPOSAL:

Approve Contract Modifications under FY 2006-07 AB 2766 Discretionary Fund Work Program

SYNOPSIS:

The MSRC approved multiple modifications under the FY 2006-07 AB 2766 Discretionary Fund Work Program. These modifications augmented funds for four previously awarded contracts demonstrating retrofits on off-road vehicles. The MSRC seeks AQMD Board approval of these modifications under the FY 2006-07 Work Program.

COMMITTEE:

Mobile Source Air Pollution Reduction Review, September 18, 2008, Recommended for Approval

RECOMMENDED ACTIONS:

1. Approve augmentations totaling $58,480, using unallocated funds, and modifications of four contracts under the Off-Road Diesel Construction Equipment Retrofit “Showcase” Program as part of the FY 2006-07 Work Program, as described in this letter and as follows:
   1. Augmentation of contract with Dan Copp Crushing in an amount not to exceed $29,000 as part of the FY 2006-07 Work Program, which combined with the original $44,600 award will result in a combined award amount not to exceed $73,600 to purchase, install, demonstrate and evaluate diesel emission control systems on off-road diesel construction equipment;
   2. Augmentation of contract with Reed Thomas Company in an amount not to exceed $14,300 as part of the FY 2006-07 Work Program, which combined with the original $334,310 award would result in a total award not to exceed $348,610 to purchase, install, demonstrate and evaluate diesel emission control systems on off-road diesel construction equipment;
   3. Augmentation of contract with Sukut Equipment in an amount not to exceed $2,180 as part of the FY 2006-07 Work Program, which combined with previous awards totaling $24,720 would result in a total award not to exceed $26,900 to purchase, install, demonstrate and evaluate diesel emission control systems on off-road diesel construction equipment;
   4. Augmentation of contract with Griffith Company in an amount not to exceed $13,000 as part of the FY 2006-07 Work Program, which combined with previous awards totaling $220,740 award would result in a total award not to exceed $233,740 to purchase, install, demonstrate and evaluate diesel emission control systems on off-road diesel construction equipment;
2. Authorize MSRC the authority to adjust contract awards up to five percent, as necessary and previously granted in prior work programs; and
3. Authorize the Chairman of the Board to execute new and modified contracts under FY 2006-07 AB 2766 Discretionary Fund Work Programs, as described above and within this letter.
    

Barry R. Wallerstein, D.Env.
Executive Officer

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 Board.

As an element of their FY 2006-07 Work Program, the MSRC awarded $3,641,013 to 18 fleets for 198 off-road vehicles to participate in the joint MSRC/California Air Resources Board Showcase Program, with each vehicle demonstrating one of 30 participating after-treatment devices. The goals of the Showcase Program are to reduce the public’s exposure to diesel exhaust particulate and encourage the verification of diesel retrofit devices for off-road construction equipment. Based on updated information, the original cost estimates for devices and the suitability of devices for particular vehicles have changed; thus necessitating the following: Some retrofit devices are being withdrawn from participation by their manufacturers; vehicles matched with these devices had to be re-matched with other devices. In other cases, manufacturers have determined based on operational, safety and other concerns that a particular vehicle is not workable with the matched device, necessitating re-match of that vehicle with a different device. Several awards have been determined to be significantly lower than costs for the retrofit of larger engines which require larger, or in some cases two, devices. As a result of the re-matching and award/cost differences, existing contracts require modifications and the amounts awarded to some of the participating fleets are not sufficient to cover the anticipated costs of their retrofits. On September 18, 2008, the MSRC considered options for addressing these developments. Further details are described below in the Proposals section.
 

Proposals

As stated in the Background section, MSRC staff determined that the amounts awarded to some of the fleets participating in the Off-Road Diesel Construction Equipment Retrofit “Showcase” Program are not sufficient to cover the anticipated cost of the retrofit of their participating vehicles. On September 18, 2008, the MSRC considered options to address this issue and recommendations from its MSRC-TAC. The MSRC unanimously approved augmentations totaling $58,480, from unallocated funds, for four contracts. At this time the MSRC requests approval of the following four award/contract augmentations for participation in the “Showcase” Program through the purchase, installation, demonstration and evaluation of diesel emission control systems on off-road diesel construction equipment, as an element of the FY 2006-07 Work Program:

1. Augmentation and modification of contract with Dan Copp Crushing in an amount not to exceed $29,000 as part of the FY 2006-07 Work Program, which combined with the original $44,600 award will result in a combined award amount not to exceed $73,600 to purchase, install, demonstrate and evaluate diesel emission control systems on off-road diesel construction equipment;
2. Augmentation and modification of contract with Reed Thomas Company in an amount not to exceed $14,300 as part of the FY 2006-07 Work Program, which combined with the original $334,310 award would result in a total award not to exceed $348,610 to purchase, install, demonstrate and evaluate diesel emission control systems on off-road diesel construction equipment;
3. Augmentation and modification of contract with Sukut Equipment in an amount not to exceed $2,180 as part of the FY 2006-07 Work Program, which combined with previous awards totaling $27,720 would result in a total award not to exceed $26,900 to purchase, install, demonstrate and evaluate diesel emission control systems on off-road diesel construction equipment;
4. Augmentation and modification of contract with Griffith Company in an amount not to exceed $13,000 as part of the FY 2006-07 Work Program, which combined with previous awards totaling $220,740 award would result in a total award not to exceed $233,740 to purchase, install, demonstrate and evaluate diesel emission control systems on off-road diesel construction equipment.
    

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.