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Audit and enviornmental reports needed before the City outsources Fleet Parts and Inventory Management Program

Local 79 President Tim Maguire tells the City that there seemed to be little discussion about ‘service efficiences’ which was supposed to be  the actual mandate for consultations with front-line staff working in Fleet Services.

Councillor Paul Ainslie (Chair), and Members of the Government Management Committee

 RE:  GM14.10:    Contract Award – Request for Proposal (RFP) 6101-11-3241  for the Provision of On Site Fleet Parts and Inventory Management Program

 
 The agenda item on Fleet Services, outsourcing parts and inventory management, leaves many questions unanswered. 

 In reporting on three options for the parts supply, the additional advantages of “Local Parts Procurement” through direct City employees or “Fleet-owned Inventory from Multiple Vendors”, are not reported.  Experienced direct employees can objectively weigh the cost and quality of various parts, and avoid potential conflict of interest of a sole source supplier who also acts as the middle-man for parts from other suppliers, with the cost of a significant mark-up.  This potential risk of conflict increases with “Consignment Inventory Managed by a Single Vendor”.

 According to the May 9, 2012 Staff Report, front line staff were consulted ‘on options to acquire and manage fleet parts’.

 Consultation with front-line staff did provide some significant concerns that should not be ignored:  UAP Inc. (NAPA Auto Parts) ordering wrong parts, lack of knowledge of specialty parts, lack of knowledge of parts vendors, increased downtime resulting from lack of vendors through UAP/NAPA.

 On another note, the consultation process seems to have been somewhat flawed, with staff being discouraged from raising criticism with UAP/NAPA’s performance.  Also, it appears there was little discussion on the actual mandate for the consultation, which was service efficiencies.

 This Committee and Council should be provided with more specific reports as it considers this item:

 •         A comparative Report on the amount of downtime prior to and during the existing UAP/NAPA contract, broken down by part type and vehicle type

 •        In order for the City to be assured that it is achieving the best possible price, with quality assured, there should be a comparative report on the cost of parts broken down by part type and vehicle type.  

           The approximation   of $2.4 million is not sufficient.  If this has been tracked, a report should be easily generated.  If it has not been tracked, then why?

 •        In order for the City to be assured that the best possible performance of the City fleet, including the performance of specialty equipment (for example, street sweepers)  is achieved, there should be a comparative report on the fleet performance including specialty equipment, prior to and during the existing NAPA contract.  If this has been tracked, a report should be easily generated.  If it has not been tracked, then why?

 •        Specifically the environmental performance of the City fleet should be priority for the City in order to ensure a healthier environment for Torontonians.  Therefore, there should be an environmental impact study on the carbon footprint of the fleet.  If the environmental performance of the City fleet has been monitored, a report should be easily generated.  If it has not been monitored, this should be of concern to Torontonians.

•          Even more specifically, there should be a report on whether the City’s ability to control the amount of particulate matter in the air through street sweeping has improved, remained unchanged or declined during the period of the current UAP/NAPA contract.  If particulate matter was being tested a report should be easily generated.  If not tested, then why?

 These report requests are first-glance recommendations.  However, a more thorough and professional analysis may generate further necessary information requests and reports. 

 In the City of Ottawa the auditor’s report highlighted the continued need for experienced staff and the need to continue purchasing and stocking additional parts despite the outsourcing of parts procurement:

“Management does not agree that outsourcing of parts would, by itself, remove the need for technicians to maintain hidden parts as proper planning and forecasting and necessary space allocation are necessary to in-house or outsourced supply operations.”

Closer to home, the Report of Toronto’s Auditor General on Toronto Community Housing Corporation’s  Fleet Management – Lack of Central Oversight Has Led to Control Deficiencies (December 2011) identified management control weaknesses and made several recommendations for improvement.

 Learning from the Ottawa and Toronto Community Housing Corporation experiences, it may be helpful for Council and Torontonians to have the City Auditor examine the provision of auto parts in Toronto’s fleet in order to ensure sufficient transparency and provision of adequate information as this Committee and Council deliberates on this important question.

Tim Maguire, President

 

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