TO: AC Transit Board of Directors
FROM: Salvador Llamas, General Manager/Chief Executive Officer
SUBJECT: Cash Revenue Collection Contract Award
ACTION ITEM
AGENDA PLANNING REQUEST: ☐
RECOMMENDED ACTION(S):
Title
Consider approving the award of a contract for cash revenue collection services to Brink’s for a five-year base term with one (1) two-year option period.
Staff Contact:
Chris Andrichak, Chief Financial Officer
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
Continued efficient collection and deposit of cash revenues is critical to the District’s overall business operations.
BUDGETARY/FISCAL IMPACT:
The not-to-exceed contract value for the five-year base period is $2,882,971. A single two-year option is $1,326,167 for a total value of $4,209,138. The funding for this service is included in the District’s Operating Budget.
CONTRACT AWARD SUMMARY:
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Vendor Outreach Summary: |
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No. DBE/SBEs: |
1 |
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No. Registered Vendors: |
288 |
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Contract Summary: |
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# Proposals/Bids Received: |
1 |
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Award Type: |
Best Value |
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Independent Cost Estimate Range: |
$2,780,040 |
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Recommended for Award: |
Brink's, Incorporated |
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Small Business Type: |
Not Applicable* |
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DBE/SBE Utilization %:** |
N/A |
* Neither SBE, nor DBE
** The District sets Small Business Enterprise (SBE) goals on contracting opportunities. The Federal Transit Administration (FTA) may authorize a Disadvantaged Business Enterprise (DBE) goal; however, SBE goals may result in DBE awards and utilization.
Levine Act Disclosure
California Government Code § 84308, commonly referred to as the “Levine Act,” precludes an Officer of a local government agency from participating in the award of a contract if he or she receives any political contributions totaling more than $500 in the 12 months preceding the pendency of the contract award, and for three months following the final decision, from the person or company awarded the contract. This prohibition applies to contributions to the Officer, or received by the Officer on behalf of any other Officer, or on behalf of any candidate for office or on behalf of any committee. The Levine Act also requires disclosure of such contributions by a party to be awarded a specified contract. Disclosure is not required for contracts that are competitively bid, contracts under $50,000; contracts between two or more government agencies; contracts where no party receives financial compensation; and periodic review or renewal of development agreements or competitively bid contracts with non-material modifications.
BACKGROUND/RATIONALE:
The District requires armored car services for the transportation and processing of cash farebox revenue. Cash fares collected at the four division yards and the General Office are picked up and delivered to the armored carrier’s processing center. Cash is sorted, counted and then deposited into the District’s bank account.
Staff analyzed farebox cash collection trends and, through this procurement, implemented operational improvements that enhanced efficiency and reduced costs. With this, Brink’s proposed a monthly cost for armored car transportation of $10,703, compared to the current monthly cost of $16,077. This represents a reduction of $5,375 per month, or 33.4%. Brink’s proposed monthly cost for money-handling services is $37,347, resulting in no cost increase for this portion of the contract. This stability is notable given industry-wide increases in labor, insurance, and compliance costs. Maintaining flat pricing indicates that Brinks’ proposal is price-competitive and aligned with market conditions.
When combining armored transport and money-handling services, the total proposed monthly cost is $48,050, versus the current $53,424, a savings of $5,375 or 10%.
Brink’s is the incumbent contractor and was the sole responsive bidder for the solicitation. There are a limited number of firms capable of providing armored cash collection services at the scale required by the District. In addition, the service requires specialized equipment and operational capabilities to support secure cash collection at District facilities. These requirements have historically limited the number of firms able to submit responsive proposals.
The five-year base term with a two-year option was chosen over the default “3+2” term due to the critical nature of this service and the ongoing lack of competition in the region for this service. Given the decreasing use of cash and coinage in society overall, it is unlikely that new vendors will enter this business segment and so more frequent re-solicitation would not provide any benefit to the District. The longer term can also be justified under federal procurement regulations.
ADVANTAGES/DISADVANTAGES:
Brinks’ proposal results in a 10% overall reduction in monthly costs, maintains all required security and operational standards, and provides the most cost-effective solution available. There are no identified disadvantages to awarding this contract.
ALTERNATIVES ANALYSIS:
Given the lack of competition for these services, the alternatives would be for the District to perform this function itself or partner with other agencies. The infrequent schedule for the collections means that it would not make financial sense for the District to hire staff and purchase the special vehicles required to perform these services.
Staff had discussions with BART in 2024 on collaborating on cash collection services but were not ultimately able to figure out a workable solution due to equipment and other logistical differences. Staff at both agencies agreed to revive the discussion before the end of this contract.
PRIOR RELEVANT BOARD ACTION/POLICIES:
Board Policy 465 - Procurement Policy
ATTACHMENTS:
None.
Prepared by:
Sue Lee, Director of Revenue Management
Approved/Reviewed by:
Phillip Halley, Contracts Compliance Program Manager
Michael Silk, Acting Director of Procurement & Materials Management
Aimee L. Steele, General Counsel/Chief Legal Officer
Chris Andrichak, Chief Financial Officer