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AGENDA ITEM REPORT

Title: Report on Request to Renew the Contract for Law Enforcement Driving Simulator System Warranties
REPORT PROFILE
MEETING DATE
2/22/2017
BUREAU SUBMITTING THIS REPORT
Training Program Services Bureau
RESEARCHED BY (PRINT NAME)
Tamara Baarts
REVIEWED BY (PRINT NAME)
Ralph Brown
REPORT DATE
01/19/2017
APPROVED BY
Manuel Alvarez, Jr.
DATE APPROVED
01/25/2017
PURPOSE
Decision Requested
FINANCIAL IMPACT
Yes

ISSUE, BACKGROUND, ANALYSIS, & RECOMMENDATION
ISSUE:
Should the Commission approve the Executive Director to enter into a contract with FAAC Incorporated for the purchase of the maintenance warranty for all (108) Law Enforcement Driving Simulator (LEDS) systems for one year in an amount not to exceed $335,720?
BACKGROUND:

On June 30, 2009, POST purchased 108 LEDS systems for the Regional Skills Training Centers (RSTC) in the amount of $11,128,940.77.  The original purchase included an all-inclusive, five year warranty with an option to extend the service agreement for two (2) additional years.  On February 24, 2016, the Commission approved to extend the contract for one year in the amount of $321,264, for August 1, 2016 to July 31, 2017.

The equipment purchased in 2009 is rated to have a life span of approximately eight years.  It is nearing the end of the life span and many of the LEDS are experiencing degradations from constant use involving mechanical wear-and-tear of the cockpit area (i.e., seats, steering wheel columns, shift levers, radios, brake and accelerator, pedals, etc.); but more importantly hardware and software capabilities. We are currently in our final year (7th year) of the extended warranty coverage which will expire on July 31, 2017. 

The Department of Finance has proposed funding for Fiscal Year 17/18 from the Motor Vehicle Account (MVA) for Law Enforcement Driving Simulator Replacement Project and the continuation of maintenance on the remaining simulators that are out of warranty. 

The vendor, FAAC, Inc., indicated a willingness to continue to maintain the systems in maximum operational readiness and has proposed a one-year, all-inclusive warranty of all maintenance to include upgrade of hardware, software and firmware to current specifications for a cost of $335,720.  This amount is for 108 systems installed at 24 RSTCs. 

ANALYSIS:

FAAC, Inc., has proposed a one-year, all-inclusive warranty for scheduled preventative maintenance to keep systems in proper operational readiness, unscheduled remedial service resulting from system failures, material, labor and transportation costs, online remote access for systems analysis and repair, twenty-four (24) hour on-call support, twenty-four (24) hour onsite response by California based technicians and unlimited number of site visits.  The terms of the plan are consistent with the current warranty, excluding maintenance of the trailers, which house the mobile systems.

POST staff has researched the LEDS maintenance history and learned program wide there have been 1,011 Problem Change Reports (PCRs) during the life of the all-inclusive warranty.  This is an average of 144 PCRs per year; however, there was a heavier load in the earlier period of the warranty, and it is estimated that 10% did not actually result in on-site visits as issues were corrected via online remote access system analysis and repair.

Current PCRs indicate approximately 104 calls for service between January 1, 2016 through December 31, 2016. 

If POST does not purchase the proposed warranty, FAAC is willing to offer individual RSTC sites the ability to purchase standalone warranties at a cost between $18,720 and $40,440 depending on the type and number of systems.  If POST does not purchase the warranty and only a portion of the individual RSTC sites agree to purchase standalone warranties, the liability to repair operational readiness issues at the sites not participating in the standalone warranty option would still fall on POST, as the equipment belongs to POST.  In this event, POST will have to decide whether to shut down the LEDS training program at the site or incur unbudgeted repair costs at the non-warranty response call of $6,600 per call. 

Based on the calls for service records for past year, 104 calls for service not covered under warranty could potentially cost $624,000.

If POST purchases the proposed one-year, all-inclusive warranty for $335,720. there would be no costs for maintenance or repairs and all RSTCs would receive a system wide upgrade of all LEDS software and firmware to current specifications. 

RECOMMENDATION:
Staff recommends the Commission approve the Executive Director to enter into a contract with FAAC, Inc., for the purchase of the maintenance warranty for all the LEDS systems for one-year in an amount not to exceed $335,720.
 
ATTACHMENT(S):
Name: Type:
LED_Warranty_Renewal_Proposal.pdf Backup Material