January 27, 2009

LIRR, Metro-North announce joint procurement

The Metropolitan Transportation Authority’s (MTA) Metro-North Railroad and Long Island Rail Road (LIRR) are presenting for Board approval five-year joint purchase agreements with manufacturers of train parts the railroads have in common totaling $256.7 million – the largest joint procurement of this type ever executed by both railroads.

Seven manufacturers are participating in this long-term joint agreement, providing both railroads with parts for heating/air conditioning systems, electrical systems, toilets, couplers, trucks (wheel assemblies), brakes and doors.

The joint procurement is the latest step in the railroads’ efforts to work together to improve efficiency and customer service, while reducing costs. Metro-North and LIRR anticipate administrative and economic benefits, including better pricing and volume discounts that may result in overall savings of 2 percent to 3 percent.

To ensure that the railroads have enough parts available for both their scheduled and unscheduled maintenance needs, the agreement also allows the railroads to reallocate funds to support any change in the needs of the operation. The dollar amounts allocated to individual agreements can be varied by 15 percent as long as the $256.7 million total is not exceeded.

The agreement also provides for off-site storage with a “just in time” delivery requirement.

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