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Bus and Motor Coach Library

The Buying Process, New Bus Vehicles

Author – Brian Niddery (2005)

Generally speaking buyers in the private/commercial and vocational segments tend to purchase new bus equipment as stock models.  They select a specific bus model and simply make their choices and select options as offered by the various bus manufacturers.  It is not a common practice for them to specify components or after market items that are not offered as original equipment by a bus manufacturer.  

There are certain benefits that run with this buying philosophy.  Buyers have the assurance that whatever packages are offered by a bus manufacturer most likely have been designed and engineered to provide reliability, a predictable service life, and as reasonable a maintenance schedule as today's technologies allow.  In the simplest terms possible - a fleet operator is getting maximum value at a most attractive price. 
This buying process is very similar to that found in the automotive industry, where consumers can select a specific model, and choose from a variety of available choices and options offered by the manufacturer.  Any variance to this is simply not accepted by auto manufacturers.  And there is a very good reason why - any change outside these parameters will be extremely costly for both the manufacturer and the buyer, and more importantly it will almost certainly result in a less reliable product.

Unfortunately a very different buying philosophy has evolved in the public transit sector.  There has been a growing tendency over the years for transit systems to "customize" their bus equipment.  Anytime one specifies a different component, or attempts to stray from a sophisticated and engineered product such as a bus, the price of the unit can increase substantially.  It is thought by many that this tendency over several decades has its roots in the fact that most transit officials are using government capital monies to purchase equipment and therefore are less concerned with the actual price of the product.  This of course is a very different situation for the private and vocational segments that must plan and budget for new bus equipment within the rather tight bounds of the revenues that they are able to generate.  Private operations must simply live within their means, much like the car buyer who is contemplating the purchase of a new vehicle.

Given that capital cost is not a primary factor in the public transit segment, another outcome of this has resulted in the change in the buying process itself - evolving from a "quote" basis to a "bid" basis.  In the "quoting" process the buyer generally chooses from the manufacturers' choice and option list, and tries to garner the best purchase price. In the "bid" process the buyers specify exactly what they want, a customized product in fact, and offer this out to bus manufacturers in the form of a bid.  The manufacturer can either choose to decline the business by not bidding or accept the bid and build and provide performance guarantees on exactly what is specified.

This puts bus manufacturers in an awkward position.  Bus manufacturers employ costly engineering facilities and development programs to produce the very best performing products possible, yet can be thwarted in these efforts by the bid process.  Matt Sausaman, Director of Engineering, at Turtle Top, provides us with a rather succinct point of view, "In so many ways the bid process has had the effect of shifting the expertise from the manufacturer to the customer. Based on the 'education' they have been given by a supplier, the customer determines what they want, regardless of its application to a specific vehicle. Therefore in many respects a manufacturer's engineering focus has changed from innovating and creating to improve a bus product, to merely having to integrate substitute or add-on products without sacrificing quality or OEM integrity. The effect is in some ways a decrease in the creativity of our engineers and a slowing in the advancement of bus products."

The bid process tends to erode to some degree the effective communications between buyer and seller.  In such a climate any attempt by a bus manufacturer to comment, recommend, or consult on a transit specification, may often result in a suggestion or invitation not to bid.  In the "quoting" process the manufacturer can provide a more forthright guarantee on his products, and obtain valuable feedback from his customers whenever any deficiencies should arise.  This healthy interaction is what drives improvement and better quality products.  

Paul Smith, Executive Vice-President at New Flyer suggests a more positive approach to the bid process, "In order for us to provide the highest quality, most reliable product possible, we prefer to work with performance-based specifications rather than requests for branded components.  This allows us to utilize our engineering infrastructure, leverage our expertise and work with our vendors to create solutions for our customers.  There are many excellent products available to our customers, but sometimes the requested components cost more, are more expensive to engineer into the vehicle and are less reliable, and we want to work with transit properties to make sure that the vehicle we manufacturer is the highest quality available."

In the bid process a bus manufacturer is expected to guarantee a customized product, yet often has little or no say in the initial product specification, or how it can be improved or better engineered.  And when deficiencies do occur, often as a result of the "customizing" effect, a manufacturer is often held accountable for that which is beyond his control.  Working with performance-based specifications rather than branded components, allows the manufacturer the greater opportunity to offer its expertise to the customer.  
A similar observation is made by Ed Parr, of Champion Bus.  "In general I have found that good bus dealers work with the transit agencies to jointly develop the basic bid specifications, i.e. performance-based specifications. Problems arise as has been pointed out when component suppliers sell their products directly to the agencies (branded components) without being aware of the implications for the bus manufacturer. For example, a new seating system may require retesting to meet the applicable FMVSS & CMVSS safety standards, or require additional steel support in the floor that results in increased weight and may reduce the passenger capacity of the vehicle.  A new aftermarket alternator may not properly fit in the required engine bay space when an auxiliary air conditioning compressor is ordered. These are just a few of the types of problems that arise when the end user does not rely on the bus manufactures to assist them in developing reasonable and buildable buses."

The importance of using performance based specification is further supported by the comments of Bryan Hickman, of Coach & Equipment Manufacturing Corporation. "…this works well when planned in advance and when we (and others) have had input to the bid specifications.  The problems come when suppliers' salespeople don't understand the state of development of their products and get them written into specifications when they are not ready or don't function in a particular chassis.  We had a recent incident with a new fire suppression system that a sales person persuaded a customer to try.  The units were shipped to us late, with no instructions.  It turned out the system had never been installed in the particular Ford chassis we were using.  The system had an engine shutdown feature that required cutting into Ford wires in a way not approved by Ford, and no kit for doing so was supplied with the system.  They wanted us to make a wire harness and take responsibility if the engine shut down at the wrong time!  The result for the customer was a production delay, issues about the warranty, and displeasure with us for something they forced upon us on the say-so of a third party salesman."

Hickman also pointed out the merits of a practice known as a 'Request for Proposal', "Some customers are addressing the issue by purchasing via a Request for Proposals (RFP) rather than an Invitation to Bid.  The RFP allows the bus manufacturer more room to propose alternatives and help the customer get the combination of price, quality and options selection that best meets their needs, rather than having to accept the lowest bid even when the low bidder's ability to perform is in doubt."

The Request for Proposal (RFP) approach is somewhat similar to a "performance-based" bid in that both are focused on developing specifications that provide the best performance; however, the RFP invites greater participation and input by the bus manufacturer.

Stephen Dains, Manager of QVM for motorhomes and buses, Ford Motor Company offers his comments, "We at Ford cannot speak for the builders who complete buses on our chassis, but we have significant experience with after market options causing significant problems with our chassis systems.  Some of these issues are caused by design, some by installation by the bus builder (or fleet operator), some by operator error, and some by improper service in the field.  Some of the types of equipment that has been included in bid specs that have resulted in Ford chassis issues include Brake System Function Monitors that often cause additional leak opportunities, added electrical complexity, damaged OEM lines and harnesses that cause sensors to transmit false warnings. Engine Operation Monitors can shut down engines without good reason - occasionally with safety implications.  Driver Monitoring Systems may cause erratic operation of OEM systems."

Stephen goes on to say, "We recognize there are many reputable and well engineered aftermarket products that can add to the usability and durability of a bus.  However, the bus manufacturer is best qualified to determine what will perform satisfactorily in their product.  Most of the bus builders have had their products tested at Altoona and any durability issues addressed prior to committing to full production.  Any added component/system that did not experience the test cycle on their vehicle is less likely to perform as desired than the components/systems that did complete the test.  In addition the weight of these added options can also impact the passenger carrying capacity of a bus.  Many bus bid specification try to 'put 10 pounds of stuff into a 5 pound bag' resulting in a vehicle that is overloaded (one or more vehicle weight ratings exceeded) when all seats are occupied.  This will result in increased operating and maintenance costs, shorter life of the bus, potential safety issues, and possible chassis warranty issues."

Prior to the introduction of any new bus model there is usually a rather lengthy and intensive development period.  The many thousands of components that comprise a complete vehicle are specified in the initial design and engineering phase and tested under a controlled environment to ensure the integrity of each individual piece, for systems compatibility, and to meet optimum performance objectives.  One or more prototype models are then constructed to undergo field testing and performance evaluation to ensure that the vehicle indeed meets its design and performance objectives.  Oftentimes a number of pre-production models are then constructed and provided to selected fleet operators to undergo real time field service to ensure that performance objectives continue to be met, and to obtain valuable feedback in the form of suggested modifications and improvements.  Finally a new model undergoes Altoona tests to prescribed criteria.

Any substitute product or add-on component that is unproven, and that has not been subjected to this original lengthy and intensive development period must be considered as suspect.  Dick Seybolt of Diamond Coach sheds additional light on this subject, "We are often asked to bid on a transit bus order, which may include specified products components that are either untested, or not tested for compatibility with an existing bus model.  This can very often cause unforeseen problems of reliability or even degradation of performance.  For example a seat manufacturer develops a new seat and markets it directly to the bus industry.  The seat itself may be well designed and attractive, but in the manufacturing process we find that we must modify our flooring, wall structures or design new brackets in order to anchor the seat in a safe and acceptably secure manner.  This results in an expensive alteration that in fact has not been tested as a complete seating system that could cause reliability problems down the road.  And if that should happen who should take the responsibility of correcting the problem - the seat manufacturer, the transit property who specified this seat, or the bus manufacturer who had to make the alterations and absorb the cost to make the seat work in the first place?" 

The effects of an unproven substitute product or add-on component can be many-fold.  Product failure is the most obvious outcome.  However it may be far more profound. Today's state-of-the-art buses utilize highly integrated systems in order to meet with the many regulatory standards to which they must comply.  The introduction of a specified add-on or substitute component can often affect the performance of related components. Often this reduced performance or reliability will manifest itself somewhere along its scheduled service life.  Re-specifying a standard component or substitution of another product which has not been proven satisfactory to a bus manufacturer's engineering department is a very chancy decision, which can result in the bus manufacturer's justified refusal to build due to the potential safety or other issues associated with the change.  A bus manufacturer simply should not be held responsible for the performance of an unproven component; yet transit officials through the bid process often try to do just that - hold the bus manufacturer accountable to their specifications. 

Given that a substitute product can sometimes require the modification of adjacent or connecting parts, this in turn will demote these components from a "proven" status to an "unproven" status.  Dick Seybolt of Diamond Coach paints a scenario to illustrate this, "And what about a brake manufacturer who sells a "handy dandy" brake component to a transit property that purportedly increases brake shoe life, only to find that it isn't compatible with the rest of the braking system.  Should we be reinventing an entire braking system that has demonstrated proven reliability over many years of service life just so a newly designed part fits it better?  This is what bus manufacturers seemingly have to deal with more often these days."
The introduction of any change to a standard component or the addition of an add-on product usually slows down a manufacturer's production schedule and interrupts assembly line flow.  This directly affects the manufacturers build cost, and ultimately the price of new bus equipment.

Perhaps a last word on this subject belongs to Sheldon Walle, of Eldorado National, "Even with the increasing performance requirements we are seeing in today's business environment, there still needs to be a logical and consistent approach to product specifications.  Frankly it's foolish to take an existing system or component that has proven itself both in lab testing and field testing and make changes that might look good on paper but are unsubstantiated in practice.  With all due respect, a manufacturer typically has a better idea of what will function best in his particular vehicle than an operator and should be given that consideration when a technical specification is being developed.  In final form the operator wins because he has a vehicle with proven performance that assures his passngers of the level of safety, quality and service they deserve."

So what may appear as a rather unobtrusive substitute to an original specification or specifying a particular brand of product can often result in a chain of undesirable consequences down the road.  Unfortunately an overview of the industry reveals that there may be increasingly widespread use of "customized" and "branded" specifications occurring in the bus industry that has significantly increased not only the capital cost of new bus equipment, but service life costs as well, with little or no gain in material operational benefits or equipment reliability. 

Given the sophisticated and highly integrated technology that goes into today's bus products, it is more important than ever to limit as much as possible any variances to the engineered bus product.  And it is important to understand that even a minor variance can and often will diminish the overall performance and reliability of a vehicle.  Today's transit officials are placing an ever greater emphasis on "full service life costs" rather than simply the original capital cost.  To provide the highest levels of consumer services requires a transit operation that runs at peak efficiency.  No where is this efficiency more important than in an operator's garage and service facility.  Any specification that strays from a standard bus model specification is likely to result in increased maintenance costs throughout the service life of that vehicle. 
In light of these practices, it would behoove transit officials to undertake an in-depth review of their buying and acquisition policies.  Following are some points that should be considered:

- Does your bid process hinder or enhance a healthy and free exchange of dialogue between your organization and the bus manufacturer?

- Are your vehicle specifications developed within a performance-based criterion rather than based on any branded products?

- Can your purchasing process support a Request for Proposal (RFP) alternative to the more common "Invitation to Bid", which can further enhance dialogue between your operation and the manufacturer.

- A cost comparison should be carried out to reveal any significant difference in price between an equivalent standard bus model, and one that is being specified on a bid.  Is there a substantial difference in price, and if so can this cost difference be justified? 

- A determination should be made as to whether any change from standard specification adds real value or generates an important user benefit.

- A cost analysis should be carried out for each change to specification, substitute or add-on component to determine probable or likely service life performance, reliability and cost factors; supplier availability for service support/parts replacement, and possible long-term impact on maintenance cost and vehicle downtime.