BOARD MEETING DATE: October 2, 2009
AGENDA NO. 3

PROPOSAL:

Execute Contracts to Implement Phase II HEROS Program

SYNOPSIS:

On December 5, 2008, the Board approved release of an RFP to implement the second phase of the High Emitter Repair or Scrap (HEROS) Program. Implementation of the second phase will focus on increasing the voluntary rate of participation of identified high-emitting vehicles to scrap or repair the identified vehicles. Two proposals were received by the closing date of the RFP. This action is to execute a contract with Valley Clean Air Now for an amount not to exceed $798,960 from the AB 923 Fund to implement Phase II of the HEROS Program. In addition, this action is to execute a sole source contract with the Foundation for California Community Colleges for vehicle testing and repairs in an amount not to exceed $900,000 from the AB 923 Fund. An action is also requested to allocate $1,900,000 from the AB 923 Fund for the low-income eligible vehicle replacement incentives and vehicle scrapping component of Phase II HEROS Program.

COMMITTEE:

Technology, September 25, 2009. Less than a quorum was present for the discussion of this item; the Committee member present communicated his concurrence and recommended that this item be forwarded for Board consideration.

RECOMMENDED ACTIONS:

1. Authorize the Chairman of the Board to execute a contract with Valley Clean Air Now for implementation of the second phase of the HEROS Program, in an amount not to exceed $798,960 from the AB 923 Fund.
    
2. Authorize the Chairman of the Board to execute a sole source contract with the Foundation for California Community Colleges for the testing and repair components of the HEROS Program, in an amount not to exceed $900,000 from the AB 923 Fund.
    
3. Recognize up to $1,000,000 in revenue from Mercedes-Benz USA into the AB 923 Fund.
    
4. Authorize the Chairman of the Board to amend the MOU with Pick Your Part to implement Phase II HEROS Program and allocate $1,900,000 from the AB 923 Fund for the low-income eligible vehicle replacement incentives and vehicle scrapping component of Phase II HEROS Program. Of the total $1,900,000, $1,000,000 would be directed from the Mercedes-Benz USA contribution to the AB 923 Fund for purpose of Phase II HEROS Program implementation. In the event the Mercedes-Benz USA contribution is not received, the total allocation would be funded from AB 923 revenues.
    

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The AQMD has a long history implementing programs to reduce mobile source related emissions, including programs that encourage the use of low-emission vehicles for purposes of achieving state and federal ambient air quality standards. The Board has adopted several programs to reduce emissions from on-road and off-road vehicles, as well as emissions from other equipment, including the School Bus Incentive Program and the Carl Moyer Program.

The Board approved the implementation of a High Emitter Repair or Scrap (HEROS) Program using AB 923 Funds. Phase I of the HEROS Program was initiated in March 2007, at which time the remote sensing component of the Program began. Screening of potential high emitting vehicles was performed at freeway on-ramps through remote sensing. Once identified as potential high emitters, Department of Motor Vehicles (DMV) data was obtained for the vehicles, and with this information, eligibility was determined, as provided in CARB guidelines. Owners of eligible vehicles were mailed letters inviting them to participate in the Program, with potential incentives being offered of up to $500 in vehicle repairs or $1,000 for vehicle scrapping. Low-income eligible participants qualified for another $1,000 incentive for replacement of the scrapped vehicle with a CARB-certified Low Emission Vehicle.

While the technical aspects of the Program have been proven, the voluntary nature of the Program has not provided sufficient participation. As such, at the December 5, 2008 meeting, the Governing Board approved release of RFP # 2009-10 to enhance participation in the HEROS Program. Through the RFP, proposals were solicited for the development and implementation of the second phase of the HEROS Program. The goal of this second phase of the Program is to achieve a higher program participation rate by drawing interested, pre-qualified participants into advertised weekend events for vehicle prescreening. Owners of vehicles identified as potential high emitters would then be eligible to schedule appointments for confirmatory emissions testing at select smog check stations.
 

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP/RFQ and inviting bids was published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers to leverage the most cost-effective method of outreach to the entire South Coast Air Basin.

Additionally, potential bidders may have been notified utilizing AQMD’s own electronic listing of certified minority vendors. Notice of the RFP/RFQ was mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, and placed on the Internet at AQMD’s Web site (http://www.aqmd.gov). Information was also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.
 

Selection Process

Two proposals were received in response to the RFP, a proposal from Air Pollution Control Management, Inc. (APCM), and a proposal from Valley Clean Air Now (Valley CAN). Pursuant to the Procurement Policy and Procedure, the RFP identified 70 possible points for the technical score and 30 possible points for the cost score. Within the 30 points for cost, the proposal offering the greatest amount of cost share received the maximum points and the other proposal received a score that was prorated accordingly. A panel comprised of a CARB staff member, a technology expert in light- and heavy-duty vehicles, Coalition for Clean Air, and a Planning and Rules Manager in Science and Technology Advancement (four males - comprising one African American, one Asian, and two Caucasians) evaluated the two proposals. The results of the panel evaluation are provided below.
 

Of the two proposals received, the proposal from APCM was not technically qualified since the average technical scores were below the required 56 points. As such, APCM was not considered further in the process.
 

Proposal

Based on the Panel’s evaluation, staff recommends awarding a contract to Valley CAN for implementation of the second phase of the HEROS program. Valley CAN is a nonprofit organization dedicated to promoting voluntary solutions to air quality challenges in California. For the past five years, Valley CAN has been operating Tune In & Tune Up (TI &TU), whereby through local outreach, owners of “out of tune” cars are drawn into weekend events to have their vehicles screened for emissions. Those vehicles screened as potential high emitters are provided $500 vouchers to have emission repairs performed at participating stations. More than 1,500 high-emitting vehicles have been repaired to date through TI & TU. Valley CAN received the 2008 Governor’s Environmental and Economic Leadership Award.

The cost of the contract with Valley CAN shall not exceed $798,960 from the AB 923 Fund. The following table shows a breakdown in the estimated cost to conduct up to ten events in the South Coast Air Basin. In addition, Valley CAN is proposing to provide $336,000 worth of in-kind resources to manage the project.

For this project, Valley CAN will employ multipronged efforts to optimize program participation. Outreach will be both community-based and regionally oriented. Valley CAN is proposing to conduct in-depth community outreach through deployment of field coordinators who will network with local community leaders to gain public interest and to help publicize a series of weekend events. Regional participation will also be fostered through paid and free sources of advertising. In addition, Valley CAN is proposing to work in concert with new and used car dealerships within local communities to promote vehicle scrapping.

Valley CAN plans to utilize six entities. The Foundation for California Community Colleges (FCCC) will be the subcontractor primarily responsible for the establishment and management of a “call center,” and data collection, tracking, and analysis. During Phase I of the HEROS Program, FCCC was the contractor responsible for developing the web-based data management system, determining vehicle eligibility based on Moyer criteria, soliciting vehicle owners, establishment and management of a call center, scheduling and performing vehicle repairs, and tracking vehicle appointments, repairs, and retirement. Winning Mark, another proposed subcontractor, will develop enhancements to the existing database system and software interface for adaptation to Phase II of the HEROS Program. Advanced Transportation Technology and Energy Network of Community Colleges (ATTE), will provide event staffing, including coordination of high-emitter vehicle screening and vehicle under the hood checks. Graphic Focus and Lista Design Services will perform design and printing for vehicle solicitations. Valley CAN will obtain assistance in community outreach from experienced environmental justice representatives with roots in the community.

A combination of broad-based community outreach and advertising would be utilized, with strategies customized for each event and location. Community outreach would be conducted by local Valley CAN field coordinators and a broader-based outreach would be performed by Kennedy Communications. It is estimated that a minimum of $150,000 would be spent on paid media advertising such as news coverage, editorial board briefings, small community newspapers, newsletters, and flyers, with about 6% of the cost allocated to production media design by Lista Design Services and Graphic Focus.

Weekend events would be managed and coordinated by Valley CAN, at no cost to the AQMD. Through ATTE, auto mechanic students would staff the events, accounting for an estimated 15% of the event costs. Almost half of the event costs cover equipment rentals, food, and materials. FCCC would perform emissions screening at about 20% of the event costs. Travel costs, including that from outreach, would be responsible for about 15% of the event costs. FCCC would conduct project reporting.

Staff is recommending that the proposed approach for Phase II be taken in smaller steps to determine if participation rate is increased before conducting larger numbers of events. As such, after four events, the program would be reassessed. If program participation were favorable at that time, up to a total of ten events would be held. Estimated activity costs for the first four events would be roughly 40% of the totals specified for each activity in the table.

All program administration and management costs would be funded through the Valley CAN contract. The program management and administrative costs associated with the program are marketing, scheduling of appointments, conducting the weekend events, and subsequent data analysis. These costs will be covered under contract with Valley CAN and its subcontractors FCCC, Winning Mark, ATTE, Graphic Focus, Lista Design Services, and Kennedy Communications, at a cost not to exceed $798,600.

Incentives would be distributed to program participants through two mechanisms. A separate contract would be executed with FCCC to cover the costs of vehicle testing, repair, and diagnostics for vehicles that qualify for repairs. Secondly, the MOU with Pick Your Part would be amended for the disbursement of incentives to participants for vehicles eligible for scrapping. All administrative costs associated with vehicle testing, repair, and diagnostics would be reimbursed through the Valley CAN contract. There are no administrative costs associated with the MOU with Pick Your Part.

Staff is proposing the execution of a sole source contract with FCCC in an amount not to exceed $900,000 from the AB923 fund for vehicle testing and repair costs. The contract amount would cover the cost of repairs for an estimated 1,200 vehicles (up to $500 per vehicle) and the cost of smog check testing with emission results for approximately 2,500 vehicles, including repaired vehicles (up to $150 per repaired vehicle, which includes testing and diagnosis).

During Phase I of the HEROS Program, Pick Your Part effectively carried out vehicle scrapping. As a result, staff is recommending an amendment to the MOU with Pick Your Part for the second phase of the Program, and requesting an allocation from the AB 923 fund in a total amount of $1,900,000 for vehicle scrapping and vehicle replacement incentives for low-income eligible participants. Of this total, staff is proposing that $1,000,000 be directed to the Phase II HEROS Program from the Mercedes-Benz USA contribution to the AB 923 Fund that the Board approved in February 2008. The $1,900,000 funding would cover incentive funding for the scrapping of approximately 1,600 vehicles, including an estimated 20% of the participants who would receive the additional $1,000 incentive available to low income-eligible participants who replace their high-emitting vehicles with CARB-certified low emission vehicles. Pick Your Part will provide $1,000 to each participant who scraps a vehicle, as participants relinquish their vehicles for scrapping. The District would then reimburse Pick Your Part in an amount of $985 per vehicle. The additional $1,000 incentive for low-income eligible participants who replace their scrapped vehicles with low emission vehicles would be distributed by the District to each eligible participant.
 

Benefits to AQMD

As emission contributions from stationary sources become a smaller component of the AQMD’s emissions inventory, the focus has been directed at mobile source emissions. Mobile source emissions represent a major category of the emissions inventories for both ozone and fine particulate matter. This proposed Program focuses on the light- and medium-duty category which is a major category in the on-road emissions inventory. With the State of California having primary authority to control emissions from mobile sources, the HEROS Program has been a voluntary program for consumers interested in reducing emissions from their vehicles either via a repair assistance program or a vehicle retirement and replacement program. The proposed second phase of this Program would be geared to optimize the participation rate of this voluntary program.
 

Sole Source Justification

In the “Procurement Policy and Procedure” document, subdivision B.2.c of Section VIII allows the awarding of a sole source contract based on “the unique experience and capabilities of the proposed contractor or contractor team.” Staff proposes entering into a contract with the FCCC to coordinate and oversee the voluntary testing and subsequent repairing of the high-emitting vehicles identified in the Proposal. Testing and repairs would be performed at designated Gold Shield Stations located throughout the South Coast Air Basin. Gold Shield stations meet high performance standards and provide a variety of vehicle inspection and repair services. The FCCC currently provides the Referee function for California's existing Smog Check Program. In this capacity the FCCC resolves conflicts between consumers and the smog check stations, including Gold Shield stations, in the testing and/or repairs of the vehicles. Due to this function, the FCCC has a unique ability to work effectively with smog check stations, including Gold Shield stations. In addition, FCCC contracted with more than 25 Gold Shield stations for testing and repairs performed on high-emitting vehicles through Phase I of the HEROS Program.

FCCC is the authorized statewide auxiliary organization of the community colleges pursuant to California Education Code Sections 72670-72682. It is incorporated as of May 21, 1998 under the provisions of the California Corporations codes as a nonprofit public benefit corporation, exclusively for education, administrative and related services of the California Community Colleges. The FCCC operates 36 referee stations throughout the state, mostly on California Community College campuses.
 

Resource Impacts

The total cost of the proposed project will not exceed $3,598,960. Funding is not to exceed $796,960 to implement the second phase of the HEROS Program at cost; funding for vehicle repairs and testing is at a cost not to exceed $900,000, and funding for vehicle scrapping and low-income eligible vehicle replacement incentives is at a cost not to exceed $1,900,000. All funding would be obtained from the AB 923 Fund, with $1,000,000 for vehicle scrapping directed from the Mercedes-Benz USA contribution that the Board approved in February 2008, to the AB923 Fund. In the event the Mercedes-Benz USA contribution is not received, the total allocation would be funded from AB 923 revenues. Sufficient funds are available from the AB 923 Fund.