Texas DOT Expects to Save $40M by Eliminating 1,500 Vehicles

September 23, 2013

The Texas Department of Transportation (TxDOT) rolled out its Fleet Forward program to include eight more districts after the success of its initial pilot. A total of 11 districts now feature the program. The expansion is part of the program’s plan to remove 6,000 vehicles from its fleet and generate savings of $500 million over 10 years. Since launching the program in January 2013 with a fleet of 16,000 vehicles, TxDOT has tagged 1,500 vehicles for sale.

“Our main goal is making sure the state has the right equipment to maintain the roads at the right cost,” an agency representative told Government Fleet.

The Right Vehicle

To reach its goal of a 10,000-vehicle fleet, the vehicles will be sold through the state’s standard disposal process, and it will also consider offers for a bulk purchase of a number of equipment pieces. The primary goal is to sell the assets to be able to reinvest the money back into Texas roads, the agency stated.

Though the full savings from the 1,500 removed vehicles has not been realized, this year the agency estimated it avoided the expenditure of $40 million in capital assets from not having to buy as many new vehicles when current assets needed to be replaced. The savings will be reinvested into further improving the fleet.

The Right Time

In 2012, the department conducted a statistical analysis of its fleet to determine the budget it would need to get the fleet to a maintainable level. “We identified a need for $100 million, but were allocated only $50 million,” the agency representative said. “To determine how we could do more with less, we instituted an actual utilization review.”

TxDOT conducted a pilot program in the Abilene, Fort Worth, and Tyler districts to see how often equipment was used in realistic terms. Management was asked to verify actual usage and identify needs in order for the field teams to develop and test fleet plans specific to their area and needs. “If the equipment was not needed after a few months on hold during testing, we scheduled the equipment to be sold,” the agency representative said.

TxDOT plans to expand to 25 districts over time and it is currently phasing the program out to the next set of districts. The agency expects to remove 6,000 units by mid-2014, with savings to generate at a rate of $50 million per year over 10 years once it is implemented.

The Right Cost

TxDOT determined its costs savings by looking at how much it would cost to run its fleet over a 10-year period including new purchases, maintenance, fuel, and depreciation. It determined it could save $350 million by having a smaller fleet; $100 million through procurement avoidance; and $50 million from improving maintenance.

The future fleet of TxDOT will be more productive, more reliable, safer, and have better technology than the fleet today, the agency representative said. Shifting to a smaller fleet will allow TxDOT to make the right investments for the most efficient use of its vehicles. 

By Kirsti Correa

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