Part 1 of 3 - Applying Project Management to Rail Transit Rolling Stock Projects

 

This article was started with a simple question and answer to a posted article on Converting the Design-Bid-Build Contract Model for Design Build Delivery in the rail transit domain – see https://www.linkedin.com/pulse/converting-design-bid-build-contract-model-design-build-hattenrath/.  Or  https://www.projectmanagement.com/blog-post/47557/Converting-the-Design-Bid-Build-Contract-Model-for-Design-Build-Delivery

Q1.      (October 2018-Ward) Thanks for sharing your insight on Project Management. Just curious if you can share your experiences with rolling stock acquisition. Is the methodology the same for these projects compared to fixed assets like station, signal projects, etc?

A1.      (October 2018-Hattenrath)  Many of the published articles can be applied to rolling stock projects, which are most similar to contracts for fixed assets such as rail signal systems and train movement operation centers.   But rolling stock projects have more stakeholders and normally involve heavy customer outreach and focus groups for customizing the travel compartment to meet the target commuter travel experience, comfort, and environment.   Rail commuters, like air travelers, are expecting amenities that will make their on-board time equally suitable for sleeping, working, socializing, enjoying a movie or video game on a computer, or using a smart-phone feature while connected to on-board power or wifi network.

This article is collaboration between Lamont Ward, Senior Electrical Engineer at National Railroad Passenger Corporation (Amtrak), and Henry Hattenrath, Senior Technical Consultant – Parsons Transportation Group.   In a Q&A format, it covers items in the rolling stock contract acquisition and the Buyer and Seller interaction on contract elements.  

Ward has 19 years of combined experience with Amtrak and LIRR while holding technical engineering positions in the mechanical department responsible for modification, maintenance and repair of rolling stock.   Hattenrath has over thirty year experience on capital projects with LIRR and MTACC while holding project management positions on rolling stock modifications for ASC and event recorders, and fixed assets for track, signal and communications and power systems.

In theory, the vehicle purchase project is a successor to a Seller’s program for developing a ready for production vehicle that can be customized to individual Buyer’s requirements.   While not the same volume, rail transit vehicles follow a process used by automobile manufacturers.

This article highlights the differences in project characteristics between construction and rail transit rolling stock purchases.  The characteristics are relative to a project management view as opposed to presenting the program Model showing the processes and life-cycle for development and production of rail transit vehicles.

Q2.      (November 2018)  How are prototypes used in the contract?

A2.      (November 2018)  Depending on the Buyer’s contract, there may be prototypes that are delivered for form, fit, function testing and assessment prior to final design and the start of vehicle production and assembly.   Elements of the rail passenger that are frequently prototypes are passenger seating, car vestibules,  restroom  compartment, and operating cab and engineer seating,   The Project Manager will ensure the contract includes the technical requirements as well as performance milestones and dates for delivery of the prototypes.

Q3.      Are there design submittals and review meetings specified in the contract?

A3.      Yes.   While the Buyer’s contract may not provide detailed requirements, most rail car manufacturers in their proposals will explain the their established and proven  plans for managing the execution of design and documentation to support material purchase, fabrication and assembly, delivery and acceptance testing, in-production upgrades, warranty, and spare parts. 

Q4.      What are the elements and durations in the typical acquisition process for rolling stock contracts.

A4.      Due to the limited amount of manufactures for locomotives and rail passenger cars, the process is different than the process for construction and systems purchase contracts.   For rolling stock, the process may include:

A)  Outreach to manufacturers for comments on the proposed technical requirements.   This allows the Buyer and Seller to adjust requirements so the specifications are not outside the current products available in the industry.   Estimate six months for this activity.

B) Expression of Interest from contractors.  This allows the Buyer to test the market for Sellers that can deliver the product within the Buyer’s proposed milestone dates and the budget range.    Estimate three months for this activity.

C)  Request For Proposals.   This allows the Buyer to solicit and evaluate detailed technical and cost proposal from Seller’s and to select the most responsive and responsible contractors to negotiate the contract amount.    Estimate six months for this activity.

D)  Request for Best And Final Offer (BAFO).   This allows the Buyer to obtain and evaluate cost to determine the final contract amount that offers the best value to the Buyer over the intended life cycle of the product.   Estimate three months for this activity.  

Q5.      Are contract specifications and drawings very different from construction contracts?

A5.      Yes.    Most construction contracts define the requirements for each square foot of space as well as detailed descriptions of equipment, systems and furnishings that are installed within the space.   Rolling stock contracts are more oriented to defining features and performance attributes of the vehicle’s performance expectations over a specified period in years for the life cycle, which includes period maintenance, running repair and  mid-life  maintenance overhauls.   

Q6.      What is the basis for selecting the Seller with the best value?

A6.      Buyers define the criteria for selecting the Seller in the Information For Bidders.   Buyer’s cost proposal requirements for rolling stock contracts will contain detailed cost data for evaluating the direct and indirect costs.   The Seller’s proposals will include per vehicle cost for delivery, and estimated labor and materials costs for operation, inspection, maintenance/running repair and mid-life overhauls.    The total costs will be used to determine the Seller offering the best value.  The Buyer’s contract may also consider negotiating long-term operating contracts for providing Original Equipment Manufacture (OEM) components and spare parts.