CO-OP SPECS AND PURCHASING REDUCE FIRE APPARATUS COSTS
APPARATUS/EQUIPMENT
Team effort has always been synonymous with the fire service. Now this spirit of cooperation is helping departments cut purchasing costs on new equipment.
When the Hertz Corporation purchases several thousand Chevy Citations for its 1983 fleet, General Motors no doubt will sell these vehicles at a very competitive price. Quantity purchasing is one way that many companies and corporations are able to reduce their operating costs. Obviously, fire departments could profit by purchasing fire apparatus through a fleet concept, but few city fire departments can justify or afford a large enough quantity of apparatus to coax a fleet price from manufacturers. However, what if several cities departments formed a kind of co-op to increase their buying power through group purchasing? Fire departments from six cities in the south-central United States did just that.
These departments formed an InterState Fire Apparatus Specifications Committee in June 1982, and last Dec. 14 in a city council meeting in Oklahoma City, bids from 11 apparatus manufacturers were opened on a contract for 20 pumpers. The fire departments of Oklahoma City and Fort Worth, Texas, each purchased two of these engines. The Dallas, Tex., Fire Department purchased 11; the Kansas City, Mo., Fire Department purchased three; and the departments of Wichita, Kans., and Shreveport, La., each purchased one of the engines.
Co-op roots
This innovative joint purchasing strategy grew out of a city managers’ meeting held in early 1982.
City managers of larger American cities meet several times each year to discuss problems facing their communities and to seek solutions to these problems. How to provide the same or additional services with less funding is, of course, a problem confronting virtually every city in the country. With a number of city managers expressing interest in the group purchase concept of fire apparatus, Oklahoma City’s City Manager C. Scott Johnson explored the feasibility of the idea with Oklahoma City Fire Chief Jimmie R. Catlege.
They agreed to contact other southcentral cities with populations in excess of 200,000 and with similar fire fighting demands and apparatus needs. Oklahoma City’s Fire Equipment Officer Oren T. Dowdy surveyed equipment officers in a number of cities and received a strong positive reaction to being involved in the project.
Equipment choices
Six municipalities sent department representatives to a two-day meeting in Oklahoma City in June 1982 to initiate the critical first stage of the venture —the standardizing of the specifications for a 1250-gpm pumper. Clearly, the entire effort could have understandably washed out at this point, considering the strong preferences for certain types of equipment the cities might have. But it did not happen. In fact, at the end of this two-day meeting, the cities were in unanimous agreement concerning the basic features for a pumper.
At this organizing meeting, Dowdy was elected chairman of what the participants chose to call the Inter-State Fire Apparatus Standardization Committee. Its members were Chiefs Catlege and Dowdy from Oklahoma City, Chief J. W. Bearden from Dallas, Chief john Akin from Ft. Worth, Chief Jim Martin from Wichita, Chiefs John Hamilton and Troy Tholborn from Kansas City, and Chief John Haire and David Friar from Shreveport. Dowdy also agreed to be the principal author of the specifications.
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By the time of the committee’s second meeting in Dallas in August 1982, members had reached substantial agreement concerning the apparatus engine, drive train, fire pump, chassis, compartmentation and other major features.
“One potential problem in composing the specifications was how to allow for the different accessories the participating cities preferred on their pumping engines,” Dowdy explained. “Actually, working in a variety of accessories turned out not to be a major obstacle. The specifications directed the bidding manufacturers to submit a single bid on the basic apparatus and individual bids on the accessories each city requested.”
Specification decisions
The committee ultimately approved a 45-page “Specifications for Custom CabForward Class A 1250-GPM Triple Combination Pumper.” Catlege emphasized that the specifications do not outline a minimum or stripped piece of equipment. “First, there are several physical features of the apparatus one would not normally expect to see a city request for its pumping engines, he added. These include: custom-built five-man cab; 6V-92TA Detroit Diesel engine with HT-740D Allison transmission; synchro-start speed control; onboard speed air compressor; built-in battery conditioner; 36,000 GVWR chassis; 11:00 x 20 tires, which standardize chassis used on pumpers and aerial trucks; built-in foam system with 30-gallon AFFF tank; and deck monitor with 1000-gpm Stang nozzle.
In addition to these features, the preamble to the specifications required manufacturers to include the following in their bids:
- Warranty: two years on parts, labor and all components; three years extended warranty for engine and transmission; seven-years on body rust, corrosion and metal cracking.
- Within 72 hours after the receipt of a verbal or written notification by the fire equipment officer that warranty service is required, the manufacturer will respond verbally. Immediately thereafter, a follow-up by letter shall go to the city with a statement of intent as to how, where and when the warranty service shall be accomplished.
- The bid and delivery dates and warranty are all required to be bonded.
Prior to the committee’s third meeting in Kansas City in August 1982, the specifications were sent to a number of equipment manufacturers.
Manufacturers’ bidding
At the Kansas City meeting, representatives from 14 fire apparatus manufacturers presented their professional opinion of the specifications, the feasibility of assemblyine production, the times they could deliver the first and last engine of a large order, warranties, performance bonds, etc. While a few of the representatives expressed doubts about the prospects of the committee’s work, the majority were complimentary and encouraging.
The final specifications invited manufacturers to bid on a six-month renewal option. The participating cities intend to purchase under this renewal option 20 additional units prior to Dec. 31, 1983. Therefore, the manufacturer winning the contract will be committed to selling 40 fire engines to the six cities within a 12-month period following the actual awarding of the contract. At a per engine cost of around $115,000, those 40 engines represent a $5 million contract. Rather a tidy sum.
Based on the lowest submitted bid for the contract, the per engine cost for those 40 engines will be approximately $115,000. As Catlege observed, “For a comparably equipped engine bought singly or in a small order, a community would have to pay upwards of $135,000.” So, the cities participating in this group contract can expect to save at least $20,000 per engine.
The Inter-State Fire Apparatus Standardization Committee met in Ft. Worth last December 27 and 28 to evaluate the bids and write a recommendation on awarding the contract to their respective city councils.
In January this year, the committee recommended that the contract be awarded to American LaFrance, Elmira, N.Y. and delivery of the first 20 pumpers was completed in July.
The committee has now turned its attention to standardizing specifications on aerial trucks and held its first meeting in Shreveport in March.
Future plans
And then what? “Our long-range plans are to standardize specifications on all types of fire apparatus that all of the participating cities currently maintain,” said Catlege. “This would be followed by the effort to do the same with protective clothing, fire hose, and other tools and equipment that every fire department in the country routinely purchases.” Catlege added that “if our initial success in standardizing engine specifications and saving a significant amount of money on the equipment through co-op buying is indicative of what we can more broadly accomplish, then it clearly would be to our advantage to ap’ proach other areas of increasing departmental expenditures with the same strategy.”
While the most obvious benefit of this multi-city, interstate purchasing is the amount saved in buying the engines, Dowdy stresses several less obvious, long-range advantages: “First, this major contract should cause all cities to enjoy a greater availability of repair and replacement parts in the years to come, not so much from the manufacturer, but from the other cities. Since the cities will all be maintaining identical pieces of apparatus, they should be able to exchange replacement parts each city normally stocks, thus saving money by reducing downtime. Second, through the strength in numbers the committee has achieved, our fire departments should realize greater input into the design and quality of fire apparatus. And, third, member cities intend to move toward standardizing training procedures for the apparatus, which should result in savings of time and money for everyone involved.”
Perhaps the one person most pleased about the success thus far of the apparatus committee is Oklahoma City’s City Manager johnson, not because he was responsible for the impetus of the venture but because an innovative approach to purchasing is saving Oklahoma City and five of its sister cities money. “Reducing fire department outlay without sacrificing any response capability is clearly the order of the day for this country’s fire service,” johnson points out. “While there are no doubt a number of fire service professionals who would argue vehemently that costs cannot be reduced without lowering the service level, we know better here in Oklahoma City because we re doing it.”
