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Car-Sharing: Where and How It Succeeds Chapter 7. Procurement and Monitoring 7.1 Introduction This chapter discusses different approaches for partner organizations seeking to procure car-sharing services or formalize their support. It also describes ways in which partners can evaluate the contribution of car-sharing towards their goals for the program, and introduce appropriate performance monitoring systems. The discussion is primarily based on the partner interviews and Operators' Workshop described in Chapters 5 and 6. This material will be most relevant to partners who provide sub- stantial amounts of financial and in-kind support. The greater the partner contribution, the greater the need for formal procurement, contractual and monitoring procedures. In contrast, most partners require little more than an informal understanding with the car-shar- ing operator. While they may wish to monitor the program, these needs can often be satisfied with readily available membership and fleet growth data. 7.2Procuring Car-Sharing In many cases, partner organizations do not need to be concerned with "procuring" car-sharing. As discussed in Chapter 5, most part- nerships are informal in nature and are set up through the operator's initiative in approaching potential partners. The City of Boston, for example, has not issued a Request for Propos- als (RFP), since it does not wish to be in the business of regulating car-sharing, according to City staff. At the City of Chicago, staff feels that such a step is unnecessary; even if future competition arises fol- lowing the entry of additional operators into the local market, they plan to work with any or all of the competing firms. Metro North staff considers that an RFP was not needed because its partnership with Zipcar was a demonstration project, and because they could not find any competing operators in the New York region. In other instances, however, a procurement process whether formal or informal does make sense or is required by an agency's proce- dures. Alternatively, the procurement process allows the partner to Page 7-1

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Chapter 7 Procurement and Monitoring take the initiative and establish the partnership, either in an existing car- sharing community or through bringing the concept to a new region. The following sections summarize several of the procurement approaches that have been used by car-sharing partners in North America, including RFPs, Memoranda of Understanding (MOUs), contracts and informal bid- ding. In general, RFPs or similarly formal processes are important if there is a large amount of support offered by the partner. Normally, however, a more informal process is appropriate. In most communities with car-shar- ing, there is only a single operator, meaning that the issue of procurement is never raised. The partner simply works with the incumbent operator. Requests for Proposals Requests for Proposals for car-sharing services have been issued in several main contexts: Where the partner organization is offering financial support, park- ing or similar assistance. Examples include Cambridge, MA, and the Washington Area Metropolitan Transit Authority (WMATA). The University of Wisconsin did not issue an RFP for the first car on its campus, but decided that one was necessary for the second car due to the amount of subsidy being considered. Note, how- ever, that this practice is the exception rather than the rule; most partners do not issue an RFP prior to granting support. To bring car-sharing to a new community. This can be a more pe- ripheral location within a region that already has car-sharing, such as Stanford University in the San Francisco Bay Area. In Seattle and San Diego, meanwhile, the RFP was the original impetus to start car-sharing in the region. For large-scale memberships or fleet management services. The City of Philadelphia, for example, issued an RFP as part of its fleet reduction program, discussed in Chapter 5. Even though the city already had an incumbent operator PhillyCarShare, which was ultimately selected it decided to use a competitive process. With less success, RFPs have also been used in attempt to broaden competi- tion. For example, King County Metro was eager to receive bids from the rental car industry when it began its procurement process in 1999. To date, rental firms have either declined to submit proposals (as in the case of King County Metro), or have not been selected. In Europe, however, rental firms such as Avis are active providers of car-sharing. Operators suggest that RFPs be as specific as possible regarding the overall goals of the issuing agency, and the types of support that are on offer. In this Page September 2005 7-2

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Car-Sharing: Where and How It Succeeds way, the RFP can help set out the partner's expectations for the program. For example, is serving low-income populations a priority for the partner, or does the partner want to see the most rapid growth possible? What outside funding sources may be available? In turn, this will shape which organiza- tions respond to the RFP, and help frame their proposals. Appendix D provides excerpts from sample RFPs from selected agencies. Note that WMATA and King County Metro have released two RFPs, with the second issued after the first contract expired. Exclusivity Some partners such as King County Metro and Stanford University have opted to select a single operator, while others will grant support to all qualifying operators. With WMATA's first RFP, a single operator, Flexcar, was selected, and staff suggests that this was the right decision given that only one responder was willing to abide by the agency's strict criteria. Fol- lowing WMATA's second RFP, a second car-sharing company, Zipcar, was also selected. While the current contracting arrangements with Flexcar and Zipcar entitle each company to parking spaces at particular stations that do not overlap, staff report that WMATA would be amenable to permitting more than one operator in a station parking facility in the future. Note that in many cases, exclusivity is a moot issue as only one bid is re- ceived. This was the experience of the San Diego Association of Governments (SANDAG) and with the 1999 RFP from King County Metro. Scope of Services The scope of services in an RFP is often extensive, specifying detailed requirements on vehicles, maintenance, technology and administration. Others, such as Stanford University's (Exhibit 7-1), are much simpler. The overall intent, however, is to make it clear that the vendor will provide a full, turnkey service, taking responsibility for all vehicle and customer service issues. The following are some items often included: Locations. The RFP might specify locations where services are required (e.g. King County Metro) or describe places where the partner is willing to provide parking (e.g. WMATA). Technology. Most RFPs simply describe the type of systems required, such as 24-hour reservations by Internet and phone, and secure vehicle access, rather than mandating a particular technol- ogy. Page 7-3

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Chapter 7 Procurement and Monitoring Vehicles. Requirements might include the type of vehicles (such as hybrids), age, amenities, and accessibility. For example, WMATA's RFP specified the provision of hand controls for users with disabilities, and the contract requires these to be fitted following a request from a mem- ber. (In practice, none have been forthcoming.) Maintenance and cleaning. This might include the provision of road- side assistance, and adherence to maintenance and cleaning schedules. Reporting and evaluation. The scope may specify the types of infor- mation required by the partner, and the frequency of reporting. Administration. This might include meetings, presentations, and points of contact. Exhibit 7-1 Stanford University RFP Stanford's RFP provides one of the most concise descriptions of the services requested. Objective The objective of the program is to provide vehicles at a reasonable per-hour and/or mileage cost to students, staff, faculty, and campus departments for personal and business related purposes. This program will support the university's effort to reduce the number of commute vehicle trips to Stanford University, reduce the demand for parking spaces, and encourage use of transportation alternatives such as mass transit, biking, car and van pooling, etc. Program Description The vendor shall establish and manage a car sharing program serving the campus community consisting of students, staff, and faculty as well as campus departments. Services to be Provided The vendor shall be responsible for a full turnkey car-sharing program for the Stanford University community including the day-to-day operations of the program. This will include, but not be limited to: 1. Providing an on-line 24/7 reservation system that can be accessed by the campus community, maintenance of the vehicles, billing, membership reservations, and the coordination of all aspects of the program to assure the communication and collaboration necessary for a successful program 2. Providing service representatives to deal with questions and/or customer needs 3. Managing appropriate staff persons and consultants, including engineers and IT personnel, who maintain and upgrade the technology 4. Maintaining a database of member and reservation information for billing and reporting purposes 5. Providing a variety of vehicle types 6. Providing a quarterly report to the university to include utilization information Services Desired Stanford University would like to see this program made available to all members of its community, including students 18 years of age and older. Page September 2005 7-4

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Car-Sharing: Where and How It Succeeds Evaluation Criteria Evaluation criteria are in most respects similar to those that agencies use for other projects, and focus on the proposers' experience and qualifications, costs, the approach to the scope of services, and participation by Disadvan- taged Business Enterprises. Some important issues for evaluating car-shar- ing proposals specifically, which may or may not form part of the formal evaluation criteria, include: Business plan. The partner will want to judge the realism of the business plan, and the understanding of the local market. Cost. In the context of car-sharing, this generally applies to the fees that operators propose to charge members, and the realism of the budget. Locations. WMATA, for example, wanted to see operators serve a variety of neighborhoods in the District of Columbia, Virginia and Maryland, rather than cherry picking the most favorable locations. The agency's evaluation criteria also considered the methodology for selecting locations. Innovation. SANDAG, for example, asked to see technologically advanced infrastructure and innovative programs, particularly those that integrated with transit. Barriers to specific user groups. For example, Stanford Univer- sity wanted to ensure access for 18 year olds, while WMATA was keen that credit checks or deposits did not pose a barrier for low- income users. In Philadelphia, flexibility is cited as one reason for selecting PhillyCarShare to partially replace the City's vehicle fleet. The RFP was not a typical one, as the type of service was known but could not be quantified for example, the number of trips and vehicles needed was highly uncertain. Moreover, the City did not want to replace vehicles on a one-for-one basis, but rather engineer a shift to transit and use of employees' private cars, as well as car- sharing. King County Metro, meanwhile, was keen to negotiate a partnership, rather than a standard vendor agreement. While the selected firm would be respon- sible for operations, Metro wanted to solicit a firm that would welcome input, and treat the growth and development of car-sharing as a partnership. Page 7-5

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Chapter 7 Procurement and Monitoring Contracts While few partner organizations have issued RFPs, a greater number have signed contracts with the operator. In most cases, the main purpose is simply to formalize an understanding. For example, the contract might specify: The number and location of parking spaces that an operator may occupy, and arrangements should the parking be temporarily un- available The amount of financial support or parking charges Rates charged by an operator, including any discounted rates of- fered to specific user groups (e.g. university affiliates) Vehicle condition Requirements for liability insurance, and for the operator to in- demnify the partner (see text below) Operational issues, such as prohibitions on cleaning or maintain- ing vehicles on the partner organization's property Reporting and evaluation requirements (discussed in the second part of this chapter) Insurance requirements vary considerably between different partners. For example, in addition to its general liability requirements that apply to all contractors, WMATA requires operators to add the agency as an additional insured, hold it harmless, and provide coverage of $2 million for bodily injury and property damage (combined single limit). The Town of Brookline re- quires $1 million in automobile and general liability insurance. Seattle, on the other hand, simply requires that "Flexcar will not hold the City responsible for any loss, theft or injury to Flexcar or its customers that may result from the use of an on-street car-share parking space provided by the City." For business members that purchase memberships, the contract will specify the rates, times and conditions of usage. Dedicated vehicles will usually war- rant more complex contracts. For example, the City of Berkeley's contract with City CarShare covers many specific issues, including criteria for adding vehicles, marketing activities, customer service and costs. Where an RFP has been issued, the contract will generally incorporate the scope of services. Contracts may also be necessary where a partner orga- nization passes through funding received from federal or other external grants, such as the Congestion Mitigation Air Quality and Job Access Re- verse Commute grants, respectively administered by the City of Chicago and King County Metro. Page September 2005 7-6

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Car-Sharing: Where and How It Succeeds Examples of partner organizations that have formal contracts with car-shar- ing operators include the City of Berkeley, University of Pennsylvania, Equity Office, WMATA and City of Chicago. Many operators have boilerplate con- tracts that are used for parking and other simple agreements. Some sample contracts are provided in Appendix D. Other Approaches Several other approaches have also been used to procure car-sharing, such as: Informal bidding. Operators might be asked to submit a propos- al and/or attend an interview, but without the issuance of a formal RFP. This approach has been used by developers where they have a choice of operators for example, by JBG in Washington, DC where Flexcar and Zipcar compete, and by Forest City in Denver, where there was no incumbent operator. Exchange of letters. This can serve to formalize an understanding in cases where no binding commitment is required. This approach was used by the Philadelphia Parking Authority, which has its own umbrella coverage and does not need a contract to address liability issues. Memorandum of Understanding. A good example is provided by San Francisco developers, who often sign an MOU with City CarShare regarding the incorporation of car-sharing into a proj- ect. In turn, this provides evidence to the Planning Commission regarding the developer's intent. It is important to stress, however, that perhaps the majority of partnerships are highly informal. Partners such as Arlington County, VA; Brookline, MA; and the Massachusetts Institute of Technology have no formal contract or procurement process at all. Staff at Arlington, for example, did not believe that this was needed, and the informal nature of the process helped the program get started extremely quickly within four months. The Town of Brookline, which provides free on-street parking for Zipcar, wanted to avoid the administrative effort and retain the flexibility to cease support at any time. The Town considers Zipcar a "tenant at will." However, staff sug- gests that a contract will probably be necessary should they begin to charge Zipcar for the parking. Page 7-7