Wednesday, February 05, 2014

EMD protests locomotive contract award

Written by  William C. Vantuono, Editor-in-Chief
F-125 F-125 EMD
Electro-Motive Diesel has filed a formal protest with the Illinois Department of Transportation over the Multi-State Locomotive Procurement contract for up to 35 125-mph diesel-electric locomotives, for which Siemens Industry received a Notice of Intent to Award on Dec. 18, 2013. IDOT, in conjunction with the California Department of Transportation and the Washington Department of Transportation, issued the procurement and formed the joint purchasing entities (JPEs).

The 19-page protest letter, addressed to IDOT’s Chief Procurement Officer and State Purchasing Officer, Bill Grunloh and Gretchen Tucka, respectively, and signed by EMD Vice President Passenger Locomotive Sales Gary Eelman, says that the proposed award to Siemens “does not meet the Illinois Procurement Code requirement that ‘[a]wards shall be made to the responsible offeror whose proposal is determined in writing to be the most advantageous to the State, taking into consideration price and the evaluation factors set forth in the request for proposals.’ In short, Siemens is not a ‘responsible offeror’ and its offer is not ‘responsive’ with respect to the Procurement. EMD is confident that after IDOT reviews the facts presented in this protest, an award to Siemens will be deemed to be contrary to Illinois law, in addition to being inconsistent with the interests of the taxpaying public and the JPEs. . . Pursuant to Illinois General Assembly [law], any award for this Procurement must be stayed until this protest is resolved.”

Following is a condensed version of EMD’s protest, as submitted to IDOT.

“The Procurement specifications require that the locomotive offered by each offeror be able to operate at a sustained speed of 125 mph under loaded conditions as specified. This is a material requirement listed as a ‘pass/fail’ criterion in the Procurement.

“Siemens has offered a locomotive that cannot achieve and sustain 125 mph, making its proposal non-compliant with the Procurement specifications. In its proposal, the Siemens locomotive is shown to be only 4,200 BHP (brake horsepower)-rated. It is not possible for a locomotive to achieve, let alone sustain, 125 mph with merely 4,200 BHP in the train configurations specified in the Procurement, despite the ‘BOOST’ feature provided in Siemens’s design. The ‘BOOST’ feature appears to elevate the locomotive’s BHP to 4,400 for ‘a controlled period of time,’ which allows its locomotive ‘to achieve a higher acceleration or top speed.’ In the context of ‘higher acceleration or top speed,’ the ‘top speed’ on the Siemens locomotive would be something less than 125 mph because it lacks sufficient horsepower.

“Determining the ability of a locomotive to achieve and sustain 125 mph is done empirically through a relatively straightforward and objective calculation. In this case, such calculation concludes that a minimum of 4,530.5 BHP would be required under the specified load conditions and rolling resistance formula (Davis) in a best-case scenario (assuming, for instance, level tangent track and system efficiencies). Because the EMD locomotive offered is 4,700 BHP, it provides sufficient power to achieve 125 mph and it can maintain this speed through minor curves and grades. The Siemens locomotive cannot achieve this speed even on level tangent track. Though the Procurement documents do not specify a minimum horsepower requirement, speed and horsepower are directly related under the laws of physics, and speed is absolutely derived from horsepower.

“IDOT’s technical evaluation team would have concluded the Siemens locomotive to be underpowered if this calculation were made. To be fair, the Siemens locomotive can achieve 125 mph, but only while operating downhill. To contemplate such operational limits in real-life service would be unrealistic, not likely acceptable to the public, and could not have possibly been IDOT’s intent.

“Siemens changed the Procurement’s strictly specified rolling resistance formula and used variations of the Sauthoff formula instead of the required Davis formula. It is industry-wide knowledge that the application of the Sauthoff formula yields more favorable results as opposed to using the Davis formula. This action, which might be Siemens’s most egregious departure from the PRIIA and IDOT requirements, may be a disingenuous act to show compliance with required performance and suggests a blatant disregard for the Procurement’s specifications.

“Siemens used flawed and incorrect assumptions in acceleration performance simulation. Here again, Siemens displays its non-compliance and creates its own operating conditions and rolling resistance formula for the acceleration simulation. Despite the performance simulation requirements described in the PRIIA Specifications . . . Siemens patently disregards this requirement and ran the simulation using the Sauthoff formula with no HEP load. This is not a valid simulation in either respect and again demonstrates Siemens’s attempt to circumvent the Procurement requirements in two material respects: HEP load and rolling resistance. In its attempt to appear compliant, Siemens proceeds to state that the ‘Davis formula is used . . . for the simulations at TTCI.’ Siemens knew well that on each completed loop of the TTCI test track, its locomotive will achieve 125 mph at least once while traveling downhill even using the more restrictive Davis formula. Thus, a statement saying that the Davis equation was used per the specification in the TTCI simulations . . . gives the appearance of complying with the specifications while not being compliant at all. Siemens used the Davis formula where its underpowered locomotive would not be seen as such (reaching the top speed once going downhill) but changed the formula to accommodate itself where weaknesses in its locomotive’s performance would be obvious, as in the acceleration performance using the Davis formula. . . . The fact is that if Siemens had followed the proper formula and included HEP as required by the Procurement specifications, its locomotive could neither achieve nor sustain 125 mph.

“In requiring a higher constant speed, nothing can substitute for horsepower. Criteria for train rolling resistance were clearly specified in the PRIIA Specification, affording no latitude for alternative assumptions in any calculations. Thus, the results would have been consistent for any offeror. Comparing the horsepower offered with the performance required of the locomotive would have yielded clear results. . . . [T]he highest speed that the Siemens locomotive can achieve and sustain is 121 mph under ideal conditions, assuming no grades or curves. The “BOOST” mode offered by Siemens cannot even be considered because it permits a higher BHP for ‘a controlled period of time’ and merely for the purpose of achieving ‘a higher acceleration or top speed,’ but not both, as described by Siemens itself in its proposal. But even if that feature can operate continuously for an extended period of time, the Siemens locomotive still cannot sustain 125 mph as required by the Procurement specifications because the requisite horsepower simply is not available. Indeed, the sustainable speed is likely to be several miles per hour lower than 121 mph in real world conditions. Even at an achievable (but not sustainable) speed of 121 mph, the Siemens locomotive still fails to achieve the strict specification that IDOT stressed as being a material component of the specification and mandatory in this Procurement.

“As the agency providing oversight of the Procurement, it was IDOT’s responsibility to ensure that those reviewing the performance section of the proposals would calculate (logically early on in the process) whether a proposed locomotive could reach, let alone sustain, 125 mph based simply on the horsepower offered. This would have served to distinguish ‘pass’ from ‘fail’ proposals immediately through a straightforward mathematical calculation. However, it is not clear whether these calculations were made. If they were made, IDOT would have concluded that the Siemens locomotive could not possibly reach and sustain 125 mph given its horsepower; indeed, if the calculations were made, the results appeared to have been ignored. Failing to examine the horsepower aspect as it relates to the ability of the locomotive to meet IDOT’s requirements has led to the selection of a factually non-compliant locomotive. Siemens’s proposed locomotive simply does not comply with the achievable or sustainable speed requirement of the specification which is both paramount for real world performance and compulsory for award of the contract according to IDOT’s own requirements.

“Providing an underpowered locomotive presents a number of opportunities for Siemens to significantly reduce the overall cost of ownership of the vehicle and its purchase price. When a locomotive is underpowered, the diesel engine can be smaller, thus reducing the number of cylinders required. In Siemens's proposal, it is able to supply a locomotive with 20% fewer cylinders than the locomotive offered by EMD. Fewer cylinders means lower life-cycle costs. It also means the engine support systems (such as the emissions after-treatment and cooling systems) and the alternator and propulsion system components can be smaller. Smaller components are less costly to manufacture and lighter in weight, and consequently, the total cost of ownership are [dramatically] reduced for the locomotive. As a result, Siemens is able to offer a locomotive which weighs at least 11,000 pounds less than EMD's locomotive. But it can only do so because the engine and support components are not sized to meet the material requirements of the Procurement—to achieve and sustain 125 mph.

“The unfair advantage given to Siemens severely disadvantaged EMD. [I]f all offerors had been afforded the ability to arbitrarily reduce the performance of their proposed locomotive, or apply other means to obtain more favorable results such as disregarding HEP load or using the Sauthoff formula, thereby allowing offerors to propose a locomotive with lower sustained speed (believing it to be acceptable to IDOT), other product configurations could have been submitted. A lower performing locomotive requires less power, and consequently, a lower price could be offered. Such differences shape the determination of the Procurement’s award. Most important, scoring in other categories also could have been profoundly different.

“EMD prides itself in its ability to find the right solution for its customers. If EMD had known that offerors may provide a solution with lower performance criteria, EMD may have provided a different solution that would have met the JPEs’ needs and with reduced pricing. However, EMD was unconscionably deprived of this opportunity. No communication was made to EMD (and other offerors) providing specifications for a lower-performing locomotive. Knowing only those specifications provided in the Procurement and trusting the integrity of the procurement process, EMD strictly adhered to the Procurement documents and offered a compliant locomotive in all areas of the specifications, as well as meeting all ‘pass/fail’ items. As a result of EMD’s strict compliance with the Procurement documents, EMD’s proposal was automatically placed at a distinct handicap in price and scoring in contrast to the non-compliant locomotive offered by Siemens, thus requiring that the relief sought by EMD be granted to ensure fairness and preservation of the Procurement’s integrity.

“EMD requests that IDOT immediately stay the proposed award to Siemens . . . confirm the statements in this protest, and subsequently cancel this Procurement. EMD further requests that a new procurement be issued as soon as possible and that IDOT adheres to all requirements for locomotive performance in its evaluation."