For many fleets, the vehicle selection process ends with developing a set of specifications to accompany a request for bids and then selecting from the bids received. Determining what is needed is the critical first step, requiring technical expertise, market research, and close communication with customers and vendors. Actually acquiring the best vehicle or equipment, if it doesn’t happen to have the lowest net acquisition cost, is a bit trickier and requires establishing purchasing policy groundwork before bids. Far too many fleet managers play the “bogus spec game” as the easy way out to buy what they or their customers want within the framework of bidding policies designed to ensure open and honest competition. You know who you are - spec’ing a drivetrain combination or radiator size only available in one make/model truck; worse still, requiring an option standard on the model you want but only available in a pricey trim group for others. These are thinly disguised techniques that don’t escape vendors’ notice even if purchasing agents are willing to “wink and nod” as the sham is played out. What happens when you get called on this practice or you get a new purchasing agent who won’t be your dupe or accomplice? There is a better way to get what you need.
Performance, design, and proprietary are the three basic types of vehicle specifications. Bid specs may be primarily of one type or encompass elements of each. The National Association of Fleet Administrators (NAFA) defines these spec types as:
• Performance Specifications: A description of a vehicle’s operating requirements, such as gross weight, speed, acceleration, maximum grade negotiability, weight and volume-carrying capacity, fuel economy, emissions levels, axle loads and distribution, and compliance with industrial or governmental standards and/or statutes such as SAE, OSHA, or DOT.
• Design Specifications: A description of a vehicle’s physical dimensions, structural properties (e.g., moments of inertia, resistance to bending, tensile or yield strengths) or other engineering parameters (e.g., power or torque).
• Proprietary Specifications: A description of a vehicle’s required equipment specific to a particular manufacturer, such as a Cat engine, Allison transmission, or Eaton rear axle.
Performance and design specification types generally suffice to acquire the desired vehicle. Be careful not to make specs more restrictive than necessary to avoid narrowing choices unintentionally. Rejecting bids that don’t meet legitimate requirements is generally not a problem. However, trying to use proprietary specs and disguising them as performance or design requirements is eventually what gets most fleet managers in trouble. True, once you find something that works, it is easier to simply require that product year after year. The problem with this strategy is that it discounts the impact of innovation and competition.
On the other hand, proprietary specs are obviously essential if your goal is standardizing on a product line to simplify and reduce maintenance costs, including technician training, parts inventory, specialty tools, and diagnostic equipment. This can be an effective cost-control strategy as long as bidding the standardized product line remains competitive. If you want to standardize on a vehicle product line but doubt the ability or willingness of purchasing agents to comply, take a look at how they buy other equipment, such as computers or software. The justification to standardize on “Brand X” truck is much more compelling financially than it is for buying “Brand B” computer or software suite - of course, it is up to you to crunch the numbers and present a compelling argument.
While you’re reshaping your organization’s vehicle purchasing policy, don’t forget to include provisions for lifecycle cost elements, including historical depreciation/resale performance, operating costs, insurance rates/risk, local parts availability, and anything else that can be quantified to ensure the best choice wins. Make vendors compete on more than purchase price when you can do it for legitimate reasons. The litmus test for valid reasons in making purchasing decisions is that they can be justified with your integrity and reputation intact. Baseless product prejudices can’t be justified, and you shouldn’t even try.
FOR MORE INFORMATION: Chris Amos, CAFM, is commissioner of Equipment Services for the City of St. Louis, Mo., and senior associate, Mercury Associates, Inc. He can be reached at: email@example.com.