Report to: General Committee                                                        Report Date: June 22, 2009

 

 

SUBJECT:                          Fire Vehicles and Apparatus Standardization

PREPARED BY:               Phil Alexander, Acting Deputy Chief, Ext 5982

                                            Alex Moore, Manager of Purchasing, Ext 4711

 

 

RECOMMENDATION:

 

  1. That the report and presentation entitled “Fire Vehicles and Apparatus      Standardization” be received;
  2. And that Markham Fire and Emergency Services be authorized to continue with the standardization of the Town’s fire apparatus fleet for an additional period of five (5) years, concluding in 2014;
  3. And that the Fire Chief and the Manager of Purchasing, or their designate negotiate with Safetek Emergency Vehicles, as the Canadian Sales distributor for Smeal Fire Apparatus Co. (Inc.) for the purchase of two pumper apparatus (not to exceed $650,000 per unit) with delivery to coincide with new fire station openings;
  4. And that the two (2) pumper apparatus be funded from Projects 7748 (1 Fire Pumper Apparatus and Equipment) and 7757 (Fire Aerial Apparatus and Equipment) as approved in the 2007 capital budget;
  5. And that Staff be authorized and directed to do all things necessary to give effect to this resolution

 

PURPOSE:

 

To communicate that the standardized fleet project and preferred supplier arrangement have realized significant cost savings in the procurement and maintenance of fire apparatus, presented efficiencies in service delivery and met the high performance expectations of end users and client groups, and contributed to the corporation’s effort to pursue NQI PEP Level III certification.

 

To recommend that Council approve the continued standardization of the Markham Fire and Emergency Services fleet and for staff to negotiate with Safetek Emergency Vehicles as the preferred supplier of fire vehicles and apparatus.

 

BACKGROUND:

 

In 2001, the Fire Department completed a deployment study which identified the current state of the fleet and the needs of the day and into the future. On November 21, 2001, Council approved the standardization of the fire apparatus fleet and the use of a preferred supplier for a five-year period.  The Fire Chief and the Manager of Purchasing were authorized to negotiate with Safetek Emergency Vehicles, as the Canadian sales distributor for Smeal Fire Apparatus.  The five-year term of the purchase concluded in November of 2006.

 

To date, the Town has purchased two (2) Aerial and seven (7) pumper apparatus since entering into the original preferred supplier agreement. Replacement pumpers for Pumper 921 and 941 were purchased and placed into service in 2007 completing the standardization of the existing “front run” fleet. Pumper 941 has since been replaced after a very serious collision in April 2008.

The Options/Discussion section of this report will highlight in greater detail the efficiency and effectiveness benefits realized through the use of standardization and preferred supplier.

 

Safetek has fire apparatus contracts with several municipalities throughout Canada:

 

1.      City of Vaughan                  9 apparatus since 2004 Preferred supplier

2.      Town of Ajax                     6 apparatus since 2004 Preferred supplier

3.      City of London                   10 apparatus since 2004           Tender

4.      City of  Burnaby                 7 apparatus 2007 - 2009          Preferred supplier        

5.      City of Pickering                 2 apparatus since 2006 RFP

6.      City of Oakville                  4 apparatus since 2004 Preferred supplier (Halton     

                                                                                                Co-op)

7.      City of Barrie                      2 apparatus since 2006 Preferred supplier

8.      City of Edmonton  17 apparatus 2004 – 2011       Tender

9.      City of Calgary                   10 apparatus 2004 and 2009    Preferred supplier

10.  City of Toronto       46 apparatus since 2004           Tender

11.  City of Vancouver              13 apparatus  2006                  RFP

 

OPTIONS/ DISCUSSION:

 

Benefits of Fleet Standardization

Standardization of the fleet allows for an “automatic response” to emergency incidents without consideration of the type of vehicle being driven and operated. Continuing the preferred supplier purchase of fire vehicles offers the best value for the Town of Markham as outlined below.

 

The preferred supplier rationale for sourcing apparatus is that it enables the Fire Department to consider all aspects of apparatus management including post delivery service, resources and expertise dedicated to the project by the vendor during the specification process and longevity of vendors in the industry. Continuity within the fire apparatus manufacturing industry is a concern where there is a continuous cycle of re-alignment in the business relationships between Canadian and American affiliates.  

 

The standardization of fire fleet and apparatus and the use of a preferred supplier since 2001 have resulted in the following efficiency and effectiveness benefits: 

 

  1. Maximized value of preferred supplier relationship – Improved warranty service and greater vendor responsiveness.  Pumper 941 was moved to the front of the production schedule after the replacement chassis was secured resulting in reduced operational downtime and risk to the community and avoidance of rental charges of up to $30, 000. Safetek’s ability to pre-purchase chassis resulted in a $15, 000 savings per unit when 921 and 941 were purchased prior to chassis modifications required by 2008 standards.  Additional efficiencies included reduced staff time attributed to change orders and shop notes generated through oversight of the manufacturing process, reduced build cycle, staggered delivery dates, and secured pricing in advance of changing engine standards for 2010.

 

The vendor, Safetek Emergency Vehicles, and the Smeal products they represent have a solid reputation with the Town of Markham and others in both Canada and the United States. Smeal Fire Apparatus Co. (Inc.) has been the market leader for major Canadian fire departments.  They have supplied 80% of the aerial platforms sold in Ontario and have approximately 60-70% of the market share in Canada.  

 

  1. Staff satisfaction - Safety innovations, such as medical cabinet and automated hose bed covers, were designed by the manufacturer with input from Markham staff to contribute to improved risk management.  Staff feedback was incorporated to streamline maintenance requirements.  A unified fleet increased staff pride in our fleet and improved training retention as the number of ‘unique’ vehicle types is reduced.

 

  1. Support the local economy – Markham sources aftermarket parts and services from local companies. Including tires, electrical supplies, brake and hydraulic components.

 

  1. Strengthen working relationship with other municipalities – The standardized fleet has increased our ability to identify potential service gaps and benchmark pricing and delivery by contacting other municipalities served by Smeal/Safetek. In emergency situations, we have been able to source specialized parts from inventories in neighbouring municipalities.

 

  1. NQI PEP Level III Certification:

Markham subscribes to the PEP Certification program from the National Quality Institute (NQI).  By applying its recommended quality framework at increasing level of difficulty, the performance of the organization is assured.  The practice of standardizing fire fleet and apparatus and the use of preferred supplier supports Markham’s desire to attain Level III certification in the following ways:

    1. Improved Process Management – Standardization eliminated the need to have an individual tender developed, issued, and administered (minimum 100 hours of staff time per tender), thereby allowing staff to reinvest their efforts into other projects and work commitment.  For example, the staff from the Fire, Operations, and Purchasing departments would have to undertake nine tenders since 2001 without this approach. 
    2. Planning and Financial Management – This approach has realized business operations benefits and financial savings and represented good business practice for delivering on the outcome of a safe community at the best possible value. 
    3. Supplier and Partner Focus – This approach maximized the supplier relationship by selecting a highly qualified supplier to deliver products and services that meet Markham’s quality requirements and prices.  Furthermore, waste is minimized by having requirements incorporated at the outset of any product design.

 

  1. Cost and efficiency benefits have been realized:
    1. Reduced training costs – Eliminated the need for apparatus specific training. Training per firefighter is reduced to an in-service review from a 24 hour course. Standardization has resulted in an overall reduction of approximately 2400 hours of training time per unit. Existing training manuals and lecture notes are utilized.  Efficiency in this area meant the Training Division can redeploy their effort toward other training without need for additional resources. 
    2. Improved staff utilization – Reduced staff movements (mileage) and overtime paid to maintain specialized qualifications on unique apparatus.  Mileage costs associated with the standardized fleet have been eliminated resulting in a $5000 per year annual savings.
    3. Lowered maintenance costs – Local supply of parts and standardization of vehicles allowed Fire mechanical staff to undertake repairs at lower costs, recover costs from manufacturer for warranty work performed in-house, and perform most vehicle repairs on-site. 
    4. Competitive prices for fleet – Standardization reduces the engineering and production set up costs by the manufacturer and it is reflected in the terms and/or service of the contract.

e.       Reduced inventory levels for common parts such as emergency lighting, filters and brakes has resulted in savings of approximately $5,000 annually. Parts inventories have been reduced for regular service requirements and common parts are readily available from the manufacturer and local suppliers.

    1. 50% Reduction in service costs resulting from greater reliability. Smeal fire apparatus have generally averaged less than half the annual downtime (40hours) for major services/inspections compared to our previous units. The Town attributes a savings of $125/hr for the downtime period (i.e. $125 x 40 = $5000 annually per unit). Minimized downtime results in greater availability of “front run” apparatus for emergency responses, less downtime of suppression crews for vehicle changeovers and station cover-ups.  Minimizing the use of backup vehicles is desirable because they have inadequate equipment capacity and require costly staffing adjustments.

 

  1. Cost Avoidance:
    1. Price is anticipated to increase in 2010 - At the conclusion of the 2009 model year, Caterpillar and Detroit Diesel have announced they will no longer supply the fire apparatus market. In 2010, new emission standards will be introduced for all engines. Buying chassis in the current model year would avoid anticipated increases in capital and operating costs resulting from the new emission standards and the reduction of competitors in the marketplace.

 

  1. Improved community safety – Reduced downtime, simplified operational deployment, and greater retention of training contribute to improved response to emergency incidents.

 

In summary, the Town’s experience with Smeal products and Safetek, as the preferred supplier, to achieve fleet standardization have proven to be a success from a customer service and quality product perspective, as well as being a financially sustainable approach to delivering fire & emergency services to the citizens of Markham.  Standardization has resulted in approximately $55, 000 annual operating savings. The fleet standardization has diverted approximately 2400 hours of staff training time to programs such as emergency medical care (EMR), acquired structure and recruit training. More than 100 hours of staff time is saved when a standard specification is used for each apparatus purchased  The diverted hours equates to approximately $500,000.

 

Some of the larger fire departments such as Mississauga and Toronto tender their apparatus. These departments are operating over 30 front run apparatus and when purchasing usually do so in quantities of 5 or greater, which allows them some level of standardization within defined geographic areas.  It should be noted that Smeal Fire

 

Apparatus Co. (Inc.) has successfully secured fire department contracts in the Greater Toronto area by means of tender, RFP and preferred supplier agreements.

The Fire and Emergency Services Department is satisfied with the performance of the apparatus supplied to date by Smeal Fire Apparatus. All the apparatus have been manufactured on Spartan cabs and chassis. Smeal has been designing and manufacturing fire apparatus for over 44 years and is one of the top 10 Fire Truck Manufacturers in North America. They meet or exceed the highest industry standards for fire apparatus including the National Fire Protection Association 1901 and Underwriters laboratories Canada (U.L.C.) 329u6.1 and U.L.C. S515. In 2008 Smeal was the recipient of the Industry of the Year Award. They have demonstrated long term stability in the industry and have a consistent relationship with their Canadian dealer, Safetek.

 

FINANCIAL CONSIDERATIONS AND TEMPLATE: (external link)

 

In the 2007 capital budget Council approved the acquisition of one fire pumper apparatus including equipment (project #7748 -$650,000) and one fire aerial apparatus including equipment (project # 7757 - $1,100,000). Due to the 300 day build cycle, there is an immediate requirement to move forward with the purchase of a pumper apparatus for the Cathedral station.  Instead of purchasing an aerial apparatus, the recommendation is to purchase the second pumper apparatus and fund it from project # 7757 at a maximum of $650,000 and the remaining funds be returned to the original funding source.

 

Although the Cornell station pumper apparatus will not be delivered until the projected station opening in 2011, to take advantage of the current price of the chassis, it is recommended the order coincide with the Cathedral pumper apparatus purchase. Terms and conditions to continue as previously arranged: ten percent (10%) down payment on placement of order, chassis payment on satisfactory inspection and delivery to Smeal Fire Apparatus, and final payment on satisfactory final inspection, testing and delivery to Markham Fire and Emergency Services.

 

As shown in the chart below, notwithstanding the cost (in US dollars) of the fire pumper apparatus has increased as a result of improved safety features and emission  standards, the purchase price of the fire pumper apparatus has decreased over the past several years due to the strengthening of the Canadian dollar. The current exchange rate of the Canadian dollar is fluctuating within a range that is extremely favourable compared to the exchange rate at the time of the original preferred supplier agreement. Safetek assumes responsibility for variances in the dollar once contract details are finalized. Securing this purchase in the current model year will preclude significant anticipated cost increases to meet 2010 engine standards and a rebounding economy in the future.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pumper and Aerial Purchase Prices

 

 

Type

Description

2002

2003

2004

2005

2006

Pumper

 

 

 

 

 

 

Unit Cost in US $

 $      389,610

 $    389,610

 

 $   422,000

 $      454,730

 

Quantity

2

2

 

1

2

 

Estimated US Cost

 $      779,220

 $    779,220

 

 $   422,000

 $      909,460

 

 

 

 

 

 

 

 

Foreign Exchange Rate

             0.63

            0.63

 

          0.80

              0.87

 

Unit Price (Cdn)

 $    617,421

 $  617,421

 

 $ 525,925

 $    522,678

 

Quantity

2

2

 

1

2

 

Total Cost

 $   1,234,841

 $  1,234,842

 

 $   525,925

 $   1,045,356

 

 

 

 

 

 

 

Aerial

 

 

 

 

 

 

Unit Cost in US $

 $      703,482

 

 

 

 

 

Quantity

2

 

 

 

 

 

Estimated US Cost

 $   1,406,964

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Exchange Rate

             0.63

 

 

 

 

 

Unit Price (Cdn)

 $ 1,120,373

 

 

 

 

 

Quantity

2

 

 

 

 

 

Total Cost

 $   2,240,746

 

 

 

 

 

 

ENVIRONMENTAL CONSIDERATIONS:

Detroit Diesel, Cummins Diesel and Caterpillar are the primary engine manufacturers which currently meet National Fire Protection Association (N.F.P.A 1901) standards for use in fire department pumping apparatus. Markham Fire and Emergency Services presently utilize the Detroit engine based on a history of excellent performance and durability. The Detroit diesel engine is compatible with the bio-diesel fuel blend used by the Town of Markham.

 

 

RECOMMENDED BY:  

 

 

 

________________________                                                ________________________

Bill Snowball,                                                                           Brenda Librecz,

Fire Chief                                                                                 Commissioner

 

 

 

Attach:    Presentation