Staff Report #3
August 28, 2024
To All Commissioners
Re: Specialized Services Contract Renewal
Recommendation
That the Commission APPROVE exercising the two-year renewal option for the Primary Service Contract for the delivery of specialized services with Voyago for the period of August 1, 2025 – July 31, 2027 noting all terms and conditions remain in force.
Background
The Commission currently holds the contract with Voyago relating to the delivery of Specialized Transit Services. The contract provides for the supply of both vehicles (including all maintenance and operating costs as well as the capital cost of the vehicles) and drivers for the delivery of the Specialized Service. A summary of the contract provisions is set out below.
Primary Service Contract:
- Five-year term ending July 31, 2025 with an option for a two-year renewal at the agreement of the parties
- Built-in annual price escalation clauses based on the change year over year in the Canadian Consumer Price Index – All Items
- Built-in fuel price fluctuation provision which provides for additional payments or refunds dependent upon fuel price trends in each year
The structure of the contract, with a five-year term and two-year renewal option provides the opportunity for the contractor to maintain the service contract for the expected useful life of the vehicles that were required to be purchased when the contract was awarded. This structure also allows either party to exit the contract after the initial five years should they so choose. The recommendation is being tabled at this time as, should the Commission choose not to exercise the extension, a new request for proposal would need to be issued and awarded to begin service provision effective August 1, 2025.
Over the period of the current contract, Voyago has, for the most part, met the expectations for service. As has been previously reported throughout the pandemic period, Voyago experienced difficulty with procurement of vehicles and adequate manpower which resulted in a slower than desired return to pre-pandemic service levels. These issues were similarly faced on the Conventional Service as supply chain and labour market issues were faced across the country.
In 2024, Voyago was able to ensure the required labour to implement service changes in April during off-peak periods (weekday evenings and weekends) and has committed to having new vehicles and required drivers available for September to launch the remaining service improvements during weekday periods between 8am and 6pm. Voyago has also confirmed that they will have the requisite vehicles and manpower available for January 1, 2025 to implement the budgeted 2025 service improvements.
Should the contract extension be approved, a similar approach will be taken for 2026 and 2027 service improvements, allowing the service changes to take place in January of each year.
The 2025 operating budget as set out in Staff Report #1, dated August 28, 2024 has assumed the contract extension will be exercised. Should the Commission direction require a request for proposal and subsequent contract award, there may be a need for a budget adjustment following the contract award.
Recommended by:
Shawn Wilson, Director of Operations
Concurred in by:
Kelly S. Paleczny, General Manager