Article

Writing and Updating Fleet Policies and Procedures

March 2006, Government Fleet - Feature

by Patrick Bartole, CAFM

Professional fleet managers are responsible for carefully defining fleet policies and procedures to all employees including executive management. To be effective, fleet policies must be routinely updated and communicated. Implementing a fleet policy can be a challenge for a public sector fleet manager, requiring the support of employees, supervisors, senior management, human resources, and union officials. Above all, it requires a culture change, which can be difficult because people resist change. To avoid this pitfall, fleet policies and procedures should be written with safety as the motivator, allowing end-users to become part of the process, since safety is everyone’s job.Prepare and Research
Whether writing a policy from scratch or just updating an old version, research the Web for agencies with similar core services as yours and obtain a copy of their fleet policy to reference. Most agencies post policies and procedures on their Web site. Professional fleet policy guidebooks can also be purchased, such as the National Association of Fleet Administrator’s Fleet Vehicle Policy Development Resource Guide or Automotive Fleet’s Company Vehicle Policy & Procedure Manual, also available in CD format. Obtain Staff Support
It is important to receive input from drivers, supervisors, managers, and especially union officials. Using a rough draft and outline of the intended fleet policy, schedule a meeting with end-users to address their concerns and ideas. This involvement facilitates the task of implementing the fleet policy, avoiding the risk of later rejection. The fleet manager is responsible for drivers and vehicles, which make the fleet policy very serious business; do not allow end-users to change the format. Simply give them a chance to digest the concept.Write the Policy
The policy should be written in terms easily understood by all drivers. The policy must explain to the end-user in detail procedures that must be followed, such as operator eligibility, MVR checking and reporting, driver training, vehicle collisions, personal use, seatbelt and cell phone usage, fuel management, maintenance and repairs, vehicle replacement, specification, procurement, and disposal. An attorney should review the policy prior to finalization. This will ensure that the policy covers any legal requirements.Define Vehicle Operator
The policy should define who is allowed to operate a fleet vehicle. Employees may work under different job titles such as repairers, electricians, carpenters, security guards, etc. However, when these employees are operating fleet vehicles, they are considered company drivers. In addition, employees who use personal vehicles for company business are considered company drivers. Moreover, the employer is responsible for employee actions during business use or within the scope of employment. Cover Employer Liability
Fleet policy must cover both the fleet manager and the employer from negligence and civil liability. Several negligent tort law doctrines exist and are widely known including:
  • Respondeat Superior.
  • An employer is responsible for the conduct of an employee, when the employee was acting within the scope of his/her employment.
  • Negligence.
  • Carelessly permitting use of an instrument/automobile that can cause harm, damage, injury, or death.
  • Negligent Hiring.
  • Failure to properly screen employees, resulting in hiring an individual with a history of motor vehicle traffic violations, violence, and/or criminal acts.
  • Negligent Retention.
  • Retaining an employee after becoming aware of the employee’s unsuitability, thereby failing to act on that knowledge.
  • Negligent Entrustment.
  • Liability is premised upon allowing another person to use an object, such as a vehicle, knowing or having reason to know that the use of the vehicle by such person creates a risk or harm to others.
  • Negligent Supervision.
  • Failure to provide necessary monitoring to ensure that employees perform their duties properly.When writing or updating a fleet policy, be sure to include procedures that minimize your employer’s risk from these doctrines. Discuss these issues and their consequences with your risk manager.{+PAGEBREAK+}Proactively Check MVRs
    One of the most important procedures for any fleet policy is motor vehicle record checking and reporting (MVR). The fleet manager must work closely with the human resources department concerning MVR checking and reporting. MVRs should be checked at least annually and/or when determined necessary, so that violations or suspensions can be spotted in a timely manner. To avoid negligent hiring or entrustment, the human resources department must apply strict standards to job applicants and current employees regarding operating a fleet vehicle. Checking an MVR must be part of the application and hiring process. With the job applicant’s written permission, a current MVR report should be obtained. This form must be kept on file for future reference especially if the applicant is hired. Employees must immediately notify the human resources department of any new violations or license suspensions. These steps can limit your liability of risk exposure. Let us say that your company hires a new employee and your human resources department fails to properly check the applicant’s motor vehicle record (MVR) report. The applicant is hired and the next day this particular employee operates a company vehicle. During this time, this employee runs a red light and causes a fatal collision. Upon investigation, you find out that this employee has a history of running red lights. The company is now liable for negligent hiring due to the company’s failure to properly check the employee’s MVR at the time of hire. Punitive damages could be in the millions. The lawyer who takes this case to trial will be dancing all the way to the bank. Consider an MVR Point System
    Your fleet operation should consider using an internal MVR point review system. A point system is used as a guide for assigning values to the various types of traffic violations or accidents in order to respond in a proactive manner. It is important to let employees know you are serious about safe driving. The best indicator of an employee’s ability to drive a fleet vehicle safely is the employee’s previous experience as a private motorist or professional driver. A safe driver avoids collisions, follows traffic regulations, avoids speeding, avoids road rage, is concerned with the safety of others, and cares about the vehicle.Address Driver Training
    The fleet manager should provide leadership in the implementation of effective driver training. New employees who will operate vehicles should be required to attend mandatory defensive driver training and a behind-the-wheel evaluation, prior to operating fleet vehicles. Defensive driver training should be completed at least every two years. Employees who use their own vehicle for government business should also be required to complete defensive driver training. In addition, behind-the-wheel training and operation for bigger vehicles such as box trucks, dump trucks, and rack trucks should be conducted on a case-by-case basis prior to employee operation. Training is the key to effective driver risk management, especially for new hires. New employees are regarded as a higher risk for crashes within the first year of employment. This is due to the employer’s lack of initial training. Proactive driver training should be performed as part of the employee orientation. This will provide the new hire with safety information and refreshed skills prior to operating a fleet vehicle. Additionally, this will let the new employee understand that you take safe driving seriously. Your human resources department should ensure employee compliance and coordinate the training process with fleet management. A little precaution before a crisis occurs is preferable to a lot of fixing up afterward.Provide Policy Training
    The fleet manager should provide training to employees, supervisors, senior management, human resources, and union officials. Fleet policy training should be presented as part of the orientation process for new hires. The fleet policy should be presented to current employees as refresher training on an annual basis, especially if you intend to make changes or updates. Present the fleet policy as a PowerPoint presentation, which should review key areas of concern. Distribute a copy of the policy to all attendees and post it on the fleet management Web site. In addition, consider printing a copy of the fleet policy in a smaller version, about the size of a vehicle owner’s manual and place the copy in the glove box of each fleet vehicle.Outline Collision Procedures
    The fleet policy must inform drivers of the procedures that must be followed in the event of a collision. A driver involved in a collision must take specific actions immediately, such as stopping the vehicle and determining damages, protecting the injured by requesting medical assistance from police, reporting the collision to local authorities, and requesting a police report. Drivers must report the incident as soon as possible to their supervisor. Even if the driver is involved in a minor vehicle collision, they should still report the incident to local police and request a police report. This way fleet management will be able to determine liability, which will make the subrogation process easier, especially when self-insured. Develop Review Committee
    The fleet manger should lead the implementation of a fleet accident review committee that will determine motor vehicle collisions for preventability. The committee should represent all departments of your political subdivision or institution that are assigned vehicles. The fleet manger should serve as the chairperson of the committee and know the principles of collision prevention and fleet safety.In order to determine collision preventability, the committee requires an individual from each department to work in harmony. Internally, each department has a variety of personnel of varying experiences, perceptions, and perspectives. In addition, the committee should recruit a representative from the human resources department. The fleet accident review committee is a proactive safety tool used to assist in preventing collisions (safety is everyone’s job) and must operate under the full authorization of senior management to be effective. The purpose of the review committee is to decide fairly and consistently if a motor vehicle collision was preventable or non-preventable. This plays an important role in driver-management relations. {+PAGEBREAK+}Avoid Personal Use
    The fleet manager should define personal use of fleet vehicles in the fleet policy. In the public sector, personal use is an issue that cannot be ignored. Since most public sector fleets are self-insured for physical damages, personal use of a vehicle should not be not allowed. If an employee is injured while operating a company vehicle, they are entitled to workers compensation. Using vehicles for lunch or coffee runs should not be permitted, unless the employee is at a remote site and no personal means of transportation are available and/or is traveling in a vehicle between two work sites and stops while in route. Employees who abuse the policy, in addition to being subject to disciplinary actions, should also be held personally liable for any damages to persons or property caused by their unauthorized use of a vehicle, including damages to the other vehicle. Authorization for limited personal use under special circumstances should be granted if reasonable and necessary. If you decide to allow personal use, than tax laws will apply. The Internal Revenue Service Code states that the personal use of an employer-provided vehicle is taxable to the employee as a non-cash fringe benefit. Personal use includes commuting to and from work as well as personal travel. The U.S. Internal Revenue Service (IRS) Deficit Reduction Act of 1984 established the value of personal use as a taxable benefit. The personal use value of an employer-provided vehicle is calculated under the following circumstances:
  • The vehicle is used by the employee for anything other than the employer’s trade or business.
  • The employer’s written policy does not forbid the personal use of the vehicle.
  • When the vehicle has not been expressly exempted from personal use. The following are examples of personal use: weekend driving unrelated to business, vacation driving mileage, midday drive-away from the office solely or primarily for personal reasons (e.g., for personal banking, personal mail, medical appointments, lunch, etc.). In general, all mileage incurred in going between home and a regular work location within the metropolitan area where the driver lives is considered personal use. Commute mileage incurred as a condition of employment, e.g., the driver is on call and thus has to take the vehicle home, is considered personal use. A PDF copy of an Employer’s Guide to Taxable Benefits can be found on the Internal Revenue Service’s Web site. www.irs.gov/pub /irs-pdf/ p15b.pdf/. Strictly Enforce Seatbelt Usage
    The fleet policy must address and enforce seatbelt usage. Although in most states seatbelt usage is the law, some employees still refuse to wear them. The fact is, seatbelts save lives and reduce injuries. Individuals who refuse to wear seatbelts must be disciplined. The driver and the passengers should be wearing a seatbelt at all times when the vehicle is in operation. Prohibit Cell Phone Use
    The fleet policy should prohibit the use of cell phones while driving. Even with a hands-free device, when we talk on the phone we become so involved with our conversation that we do not even realize how distracted we are. Cell phone have become a necessary way of life, we just need to remember that using a cell phone while driving is dangerous to our lives. Develop Fuel Management Policy
    The fleet manager must account for fuel usage and cost. With the rising cost of fuel, policies and procedures must be implemented. Whether your agency uses a fleet fuel card or on-site fueling, be sure to specify that only authorized drivers are allowed to fuel vehicles. Prohibit the usage of premium, super, or special unleaded fuel (unless specifically required by a vehicle manufacturer). Today’s vehicles will run perfectly fine on regular unleaded fuel. The policy should prohibit purchases for personal use or private vehicles.Address Utilization Annually
    The fleet manager is responsible for overseeing the proper utilization of vehicles. The vehicle’s assigned department (end-user) must demonstrate an average usage mileage per month, unless lower mileage frequency can be satisfactorily justified by the assigned department. Utilization should be addressed on an annual basis. The fleet manager should generate a utilization report, and it should include recommendations. To avoid being the “fall” person, consider recruiting a fleet utilization committee. To avoid politically motivated decisions, the committee should be comprised of individuals who are not assigned vehicles. The fleet manager should be a member of this committee, but should only present the facts and allow the other members to make up the majority vote. This will assist in keeping the fleet manager out of harm’s way.Set PM and Repair Intervals
    The fleet manager is responsible for providing safe and reliable vehicles. To uphold this standard, vehicles must be maintained and repaired at scheduled intervals. The fleet policy should explain the procedures regarding preventive maintenance and repairs. Clearly define what is expected of the end-user. When maintenance or repair of a fleet vehicle is required, the fleet manager or designee should notify the end-user and arrange for preventive maintenance. The end-user should notify fleet management immediately if any problems with the following safety items should occur: steering, brakes, tires, rims, mirrors, horn, wipers, lighting, seatbelts, windows, doors, and/or related items. The goal of any PM program is to maximize vehicle availability so that end-users are able to perform their jobs more efficiently. A little preventive maintenance can eliminate the need for major repairs later.Specify Breakdown Procedures
    The fleet policy must also explain the procedures to be followed in the event of a vehicle breakdown. Specify whom the driver should notify during working hours and after hours. If your agency uses a towing contract vendor, then specify whom to call first — the vendor or fleet management. Keep in mind that the end-user may not be well versed in automotive mechanics. It is a good idea to have notification cards placed in the vehicle’s glove box. The cards should list all contacts for vehicle emergencies, including the towing contract vendor.Vehicle Replacement Procedures
    The explanation of the procedures used by fleet management to determine vehicle replacement should be included in an effective fleet policy. An effective replacement policy is a proactive one, which enables the fleet manager the ability to notify senior management in advance, allowing time to allocate funds for the capital budget. Government fleet managers are constantly challenged when it comes to a budget, which is why it is important to effectively communicate to senior management the procedures required to replace vehicles. Replacing a vehicle is an economic decision that must be performed annually by tracking the lifecycle cost of each vehicle using the following factors:
  • Maintenance cost.
  • Operating costs.
  • Vehicle age.
  • Depreciation.
  • Mileage and/or hours.
  • Vehicle resale value.
  • New-vehicle capital cost.
  • Growth or image.Explain Specification Process
    In the policy, the fleet manager should explain procedures to properly write specifications for a new vehicle. End-users want to be part of this process; they want to know that their input counts. The process involves writing a detailed vehicle specification, either functional or technical, meeting with end-users to determine their correct needs versus wants, and meeting with potential bidders to discuss the vehicle and its components, plus your agency’s expectations in terms of performance, including lifecycle cost to operate and maintain the vehicle, and warranties, both expressed and implied.Lead Procurement Process
    The fleet manger must demonstrate leadership in vehicle procurement. This responsibility should be written into the fleet policy, informing end-users of the procedure. The process of acquiring efficient vehicles is complex. The following are examples of vehicle procurement criteria:
  • Required specialty vehicles e.g., dump trucks, waste hauling vehicles, backhoes, skid steers, and related equipment.
  • Vehicles used for snow and ice emergencies, i.e., snowplows, salt spreaders, and 4x4s.
  • Units in continuous use, such as police patrol vehicles, emergency vehicles, handicapped-accessible vehicles.
  • Vehicles that must be available for daily unplanned trips. Discuss Vehicle Disposition
    The fleet manager should replace vehicles at scheduled intervals by using a lifecycle cost analysis to determine efficient replacement criteria. Disposing of used vehicles is an essential fleet management policy topic. The end-users will want to know the procedures, so define them in the fleet policy. Selling a vehicle opens your agency to possible liabilities, especially for government agencies because they have “deep pockets.” Remember to take precautions, such as having all maintenance and repair records readily available, including collision repairs, recalls, warranty work, and state inspections. These records should be held for at least seven years. Several methods are available for used-vehicle disposal, such as employee sales, auctions, bid sales, and trade-ins. Trading in the vehicle actually reduces the capital cost of the new vehicle and guarantees that the proceeds are used for fleet purchases.Review and Implement Policy
    Now that you have your fleet policy completed, be sure to review it completely and have someone proofread it prior to your submittal to senior management. Remember, fleet policies are of legal importance, so have an attorney review it prior to implementation. Writing a fleet policy can be a great deal of work, but in the end, your hard work will pay off when your drivers have a guide on vehicle procedures.
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