Maintenance

Palm Beach County Expects to Save $300K Annually by Outsourcing Parts

September 26, 2012

WEST PALM BEACH, FL – The Palm Beach County Board of County Commissioners approved a vehicle and equipment parts management supply agreement with Genuine Parts Company (NAPA) for the County’s Fleet Management Division for an estimated annual cost of $2.25 million. The County expects to save between $300,000 and $500,000 annually as compared to the previous process, according to Douglas Weichman, CAFM, director of the Fleet Management Division.

An agenda summary from the Board of County Commissioners stated that the County will not only eliminate responsibility for excess inventory and parts obsolescence, but also increase its work order fill rate from the current 66% to a contractually defined performance of 80% after the first six months. The fleet will track technician productivity, vehicle downtime, and percent of scheduled vs. non-scheduled repairs before and after the implementation of the NAPA contract.

NAPA and County staff will determine parts inventory and identify and dispose of obsolete or unusable parts. NAPA will purchase all usable parts. NAPA’s computer system will interface with the Fleet’s fleet management information system (FMIS) to offer seamless data processing.

Four filled parts specialists positions were eliminated, and all four employees have obtained employment, one with NAPA, Weichman said.

Due to concerns about local business contracts, the agreement contains “local preference language” and NAPA is required to purchase parts from existing competitively bid contracts held by local vendors “where the cost of the part is not more than 5% greater than the equivalent NAPA product.” The County expects the agreement to negatively impact less than 12% of the County’s total parts purchased.

The County will pay NAPA a 10% markup for parts costs, as well as operating costs. At the time the agenda was written, the County expected NAPA to continue the start-up phase until the end of September and be fully set up and provide full services by Oct. 1. The contract will continue until Feb. 23, 2015, and will automatically renew for one additional year unless either party chooses to terminate the contract.

Fleet Management was tasked with coming up with ways to increase effectiveness and efficiency while reducing the operating budget, and Fleet decided outsourcing parts would accomplish these goals. According to the agenda, in the past 20 years, Fleet has outsourced transmission work, body work, towing, glass windshield replacement, fuel tank cleaning, fuel system repairs, vehicle washing/detailing, alignments on medium- and heavy-duty trucks, OEM repairs, and repairs to repair shop equipment in order to increase fleet efficiency.

By Thi Dao

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