Managed Competition Cost Proposal review: fleet services - may 2016
Managed Competition Cost Proposal Review: Fleet Services
Released May 2016
Download the Full Report here
We assessed the cost portion of the city employees' Fleet Parts Managed Competition Proposal dated March 8, 2016. The Mayor’s Office asked us in mid–March 2016 to review the employees’ cost proposal. The proposal estimated service costs, savings due to process improvements, and new revenue streams over the next five years if city employees continue to provide the service. We found that the employees’ cost proposal could have underestimated total costs over the five years by not incorporating potential annual increases for employee benefits. Estimated supply costs are uncertain; supply costs accounted for 81% of the employees’ cost proposal and have varied considerably over the past few years. While fleet parts can take steps to control shrinkage and obsolescence, supply costs are largely outside of its control. We agree that cost savings due to process improvements are possible, but were unable to validate the estimated magnitude presented in the proposal.
Released May 2016
Download the Full Report here
We assessed the cost portion of the city employees' Fleet Parts Managed Competition Proposal dated March 8, 2016. The Mayor’s Office asked us in mid–March 2016 to review the employees’ cost proposal. The proposal estimated service costs, savings due to process improvements, and new revenue streams over the next five years if city employees continue to provide the service. We found that the employees’ cost proposal could have underestimated total costs over the five years by not incorporating potential annual increases for employee benefits. Estimated supply costs are uncertain; supply costs accounted for 81% of the employees’ cost proposal and have varied considerably over the past few years. While fleet parts can take steps to control shrinkage and obsolescence, supply costs are largely outside of its control. We agree that cost savings due to process improvements are possible, but were unable to validate the estimated magnitude presented in the proposal.