FLASHBACK: Fleet Operational Review Report

First, we'd like to wish everyone a very happy and safe 4th of July! We hope you have the chance to celebrate our nation's birthday with friends and family. We would also like to send a very special thank you to the brave men and women in uniform who have, throughout our nation's history, sacrificed, and continue to sacrifice, so selflessly to defend our nation, our freedoms and the freedom of people around the world.

For us here at VACostCutting, as we celebrate the founding of our country, we recognize the importance of always striving to improve the way government operates. And with many folks on the roads this holiday weekend, we thought we'd flash back to the report from the Fleet Operational Review Team. Enjoy!



Vehicle Fleet Operational Review

The Operational Review Team report on the state vehicle fleet is complete. Virginia’s vehicle fleet includes approximately 26,000 vehicles either registered with the DMV or used for tasks not requiring DMV registration. DMV registered vehicles include vans, sedans, SUVs, pick-ups, trailers, dump trucks, tractor trailers, buses. Non-registered vehicles include specialized forestry equipment, specialized farming equipment, bulldozers, backhoes, motor graders, generators, specialized dump trucks.

This reports offers status and recommendations in the following areas:

Consider Potential for Operational and Cost Efficiencies

• Vehicle and equipment acquisition policies and procedures
• Fleet and equipment maintenance policies and procedures
• Fueling processes and the Commonwealth’s fueling infrastructure
• Vehicle and equipment operator training and monitoring

Vehicle and Equipment Acquisition Policies and Processes

• Justification Individual agencies currently evaluate their own needs. During the review process, it was revealed that there are no consistent policies or procedures regarding vehicle mission justifications, or guidelines that specify the types of vehicles that are acceptable for certain missions. Currently individual agencies evaluate their vehicle needs. Once the agency identifies its registered vehicle requirement, the agency acquires the vehicle in accordance with applicable procurement laws and regulations. Specifically, for registered vehicles, an oversight process is currently in place. The process requires that the agency head submit to the Department of General Services, Office of Fleet Management Services (OFMS) a request to approve a registered vehicle purchase.
  
• Purchase and Inventory Management After review, if the request is approved, the Department of General Services either returns the approval to purchase the vehicle to the requesting agency or adds the vehicle to its list of vehicles for purchase. The DGS, Division of Purchases and Supply (DPS), whose mission is to set procurement policy and procedures for non-technology and non-professional services and establish state-wide contracts consolidating agency requirements to achieve volume discounts, maintains a variety of vehicle contracts ranging from compact cars to school buses. DPS vehicle contracts are mandatory for use by state agencies. Each contract is written for a specific type of vehicle e.g. compact vehicles. They are allowed buy from a supplier or to factory order the vehicles. This process works well for a number of reasons. The contract price is in reality driven by the amount of concessions the manufacturer offers the dealer who wins a contract. These concessions often exceed over $5,000.00 per vehicle purchased. Virginia obtains some of the best vehicle prices in the nation.

Fleet and Equipment Maintenance Polices and Processes

Maintenance and operation of registered vehicles encompasses many functions. The two primary operators of cost in this category are the scheduled and unscheduled maintenance or repair of vehicles, and the fueling activities performed by the agencies. Maintenance practices across agencies are not uniform but a mixture of maintenance providers, state owned shops, and commercial shops are utilized.

• DGS, Virginia Tech, University of Virginia and VDOT are the only agencies known to have a fleet management system. Some other own maintenance shops to perform repairs but do not have a fleet management system
• Key emergency, first responder agencies own and operate their own shops to ensure that they have full operational capability during the annual series of emergencies related primarily to snow, flooding, hurricanes and other types of emergencies.
• VDOT has a network of repair facilities strategically located throughout the Commonwealth. These facilities are staffed with some of the best trained and certified technicians and managers in the country on the widest range of heavy equipment used by the full range of agencies.
• DGS, OFMS began an extensive re-engineering of its fleet management operations in late 2005. OFMS implemented a state-of-the-art automated fleet management system, known as FASTER. Over the first fifteen months of operation, OFMS has achieved a high level of success in capturing maintenance, operation, and cost data on DGS owned vehicles.
  

Fueling processes and the Commonwealth’s fueling infrastructure

In fiscal year 2006, the Commonwealth Accounting and Reporting System (CARS) documented expenditures of $47,911,449.59 for gasoline and diesel fuel.

• The Commonwealth operates bulk fuel sites to support emergency state needs and day-to-day operations. Many of these sites are controlled by individual agencies and do not accept common fuel card.
• No comprehensive map or information exists showing the location or the capacity of other state-owned fueling sites.
• From an enterprise perspective, consolidated data on fuel tank levels at state owned and operated fueling sites are not readily available in real time from a centralized fuel management system.
• The Commonwealth is not proactive in forecasting future fuel costs or leveraging its fuel volume purchasing power.
• Fuel data from VDOT sites and fuel data from DGS commercial purchases are not centrally integrated thus requiring reporting information from two separate systems.
• The cost to agencies for fuel at commercial fuel sites using the fuel purchase card is the same price for fuel purchased at state-owned bulk fuel sites.
  

Vehicle and Equipment Operator Safety Training and Monitoring

• The Commonwealth owns approximately 26,000 vehicles and equipment over a half a billion miles on an annual basis, and experienced approximately 2.5 million dollars last year in vehicle damage claims, as reported by the Division of Risk Management. Based on current industry standards, statistically the Commonwealth has an excellent accident record.
• Most state vehicle operators have a Commercial Operators License or a regular driver’s license. State employees that operate vehicles that require possession of a CDL are managed under strict federal rules and regulations related to training, certification, and random drug testing programs. CDL operators are required to meet rigorous operator testing and monitoring and the review team determined that state agencies with CDL operators meet testing and monitoring requirements
• There are few statewide policies in effect that address non-CDL operators. There is no requirement that each state employee that drives a state vehicle have a pre-employment driving record review, or annual driving record reviews
• The Commonwealth is self insured. The Division of Risk Management operates a program that charges an annual per vehicle premium to agencies based on data regarding past experience and their actuary.When a state owned vehicle is in an accident, it is a requirement that the Virginia State Police is contacted by the vehicle operator and that the State Police respond to the accident, investigate, and prepare a crash report
• DGS reported that their approximate 4,000 passenger type vehicles were involved in approximately 300 accidents in FY 2006, 119 of these vehicles were total losses. Approximate repair and loss costs, resulting from accidents, for FY06 was approximately $500,000. Other costs experienced by the Commonwealth as reported by DGS include vehicle usage violations such as: unpaid parking tickets, photo enforcement citations for running red lights, and speeding.

Recommendations

Vehicle acquisition policies and procedures

• Commonwealth does a good job procuring vehicles. In most cases the Commonwealth leverages its buying power by consolidating purchase volume into statewide contracts. EX. 2007 Malibu - State contract price = $13,075, MSRP = $20,795. Ex 2007 Dodge 1500 pick-up flex fuel • State contract price = $16,363, MSRP = $22,139

Fleet and equipment maintenance policies and procedures

• DGS, in collaboration with affected agencies, develop and implement a plan for all agency owned sedans, SUVs, vans, and pickup trucks that are not currently managed by an automated vehicle management application to be assigned to and managed by the DGS VMCC.
• Form a study group, facilitated by DGS and VDOT, comprised of agencies that own, operate, and maintain vehicle maintenance shops. The group will collect data on: location of each maintenance facility, type of services provided, and cost to owning agency to maintain and operate its maintenance facilities. A study group objective will be to evaluate, from an “enterprise” perspective the appropriate balance of state-owned shops, when considering commercial shop availability, needed to support the Commonwealth’s vehicle maintenance needs.
  

Fuel Processes and Commonwealth fueling infrastructure

• Commonwealth purchases approximately 14,670,000 gallons of fuel annually (8,365,800 diesel; 6,305,200 gasoline). Fuel is purchased in bulk to fill state-owned bulk fuel tanks that are available for use by state agencies. A commercial fuel card for fuel purchases at commercial fuel sites is available to state agencies. Bulk fuel contracts are administered by VDOT. The commercial fuel card contract is administered by DGS.
  Commonwealth should combine the fuel volume from the bulk fuel contract and the commercial contract into a single procurement action to leverage the Commonwealth’s total fuel purchase volume to achieve most favored pricing.
• Form a study group, facilitated by DGS and VDOT, and comprised of agencies that own, operate, and maintain state-owned bulk fuel sites, to collect data on location of each site, assets supported, volume of fuel storage, volume of fuel dispensed, and cost to own, maintain and operate the site. A study group objective will be to evaluate, from an “enterprise” perspective the appropriate balance of state-owned bulk fuel sites, when considering commercially available fuel sites, needed to support the Commonwealth’s fuel needs. Special emphasis, as part of the study group’s consideration, shall be placed on the emergency preparedness fuel infrastructure needs of the Commonwealth. Virginia Department of Emergency Management and Office of Commonwealth Preparedness representatives must be represented on the study group.
  

Vehicle operator training and monitoring

• DGS develop a training program that provides basic safety instruction on the use and operation of vehicles and actions to take if involved in an accident. Also, form a study group facilitated by DGS with participants from interested agencies and institutions of higher education, to study the need for verifying operators of state-owned vehicles have a valid license prior to the operation of a vehicle.

Thanks to all those who made this report possible.
Delegate Danny Marshall
Delegate Steven Landes
Senator Nick Rerras
Joe Damico – Department of General Services (team coordinator)
Paula Dehetre – Governor's Office For Workforce Development
Quintin Elliot, Department of Transportation
John Garrett – Senate Clerk’s Office
Seward McGhee – Department of Correctional Education
Moh Mirshahi – Department of Transportation
Steve Mouras – Virginia Tech
Don Rainey – Department of Social Services
Warren Rhodes – Virginia Marine Police
Tom Rozman – Department of Labor and Industry
Cookie Scott – Department of Corrections
Brad Williams – Department of Forestry