The State of Utah Fleet utilizes a number of approaches to buy vehicles, parts, repair services, fuel, and rental car services that include cooperative purchasing.
Sam Lee is the director of the Division of Fleet Operations and oversees about 4,300 vehicles. Utah annually replaces about 500 fleet vehicles. According to Lee, “The annual vehicle spend reaches between $10 million and $20 million a year to keep vehicles within an established 12-year or 105,000-mile replacement criteria.”
Utah’s approach to purchasing vehicles involves the Division of Purchasing setting up contracts using a request for proposal (RFP) approach every five years. Contracts are by vehicle manufacturer, with a single dealer awarded. Each dealer under contract then provides a menu of vehicle type options for each class of vehicle such as compact sedan, mid- and full-sized sedan, etc. “There might be as many as 100 vehicles available for state agencies to choose from within a single dealer contract,” Lee said.
Dealers are asked to quote a base price during the bid process by make/model and provide a discount percentage for optional equipment. “Fleet has the bottom line in mind when purchasing on behalf of the agencies it serves,” Lee said. It aso actively seeks ways to downsize vehicle types purchased for cost efficiency.
The approaches the State of Utah fleet has adopted to obtain vehicles appear to be successful. According to Lee, “A recent study indicated that Utah was spending $143 per vehicle, per month, less in depreciation expenses than rates available on commercial leases.”
Purchasing Repairs and Maintenance
On the maintenance side, Utah has had a contractual relationship with the vendor ARI, where the State fleet benefits from negotiated pricing from ARI’s expansive vendor network and reduced paper handling and processing. And, rather than writing checks to hundreds of independent vendors monthly, Utah writes one check to ARI.
In a different arrangement for Utah’s Department of Transportation (UDOT), agency fleet managers run internal shops that provide labor for the repair and maintenance of the UDOT fleet.
Lee said in order to know fleet spend and track purchasing, all State agencies are required to input fleet and cost data into the AssetWorks FleetFocus system.
Utah Goes Coop for Car Rental Services
When Utah fleet was tasked with providing an agreement for agencies to utilize car rental services, it participated in the development of a coop purchasing agreement with the Western States Contracting Alliance (WSCA). Lee said Utah stood to save money by joining forces with other fleets on the contract due to aggregated spending. “Our staff took a very active role in the development of specifications,” he said, “…enabling Utah to have a strong voice in the shape of the contract.”
According to Lee, “it’s great to be able to take advantage of the purchasing power of the 13 states in the cooperative.” Prior to use of the WSCA contract for car rental, Utah used its own internal contract. The result, Lee said, offers “…better pricing from Enterprise and Hertz than Utah could get on its own and much better liability coverage.”
“Government fleets have a responsibility not only to their customers, but to the taxpaying public to provide maximum value for dollars spent,” Lee said. He anticipates Utah expanding its use of cooperative purchasing methods and agreements in the areas of airline travel and hotels for employee travel, also housed in the division he oversees.
Another benefit to using cooperative contracts is speed. Government entities are not generally known for speedy procurement practices. In Lee’s opinion, there are valid reasons for that. “The speed with which we can respond makes government procurement more challenging. The RFP process takes time, while the private sector may be able to respond more quickly. However, the added controls serve a purpose; taxpayers can have a window into the processes and feel comfortable with them and develop trust in them.”
Government procurement may be even more challenging in a volatile economy. Taxpayers want to know what is being spent and why. In order to maintain transparency and accountability to taxpayers, the State of Utah two years ago started to publish every procurement expenditure on the internet, accessible to the taxpaying public.
About the Author:
Barbara Bonansinga is a public service administrator, Division of Vehicles, at the State of Illinois. She is president of the National Conference of State Fleet Administrators (NC-SFA) and a member of the Government Fleet Advisory Board.