The Contract stipulates a delivery schedule that outlines a Technology Verification Program phase (for 3 prototype cars); a detailed delivery schedule and penalties for non-performance.
Since Contract award, three “extensions of time” have been granted:
1. Six (6) months to incorporate changes required to improve on accessibility, wheel chair positions, PRESTO machine placement and fare enforcement modifications as a result of consultation with the stakeholders including ACAT during the mock-up phase;
2. Fifteen (15) weeks of “equitable adjustment” to allow for workflow changes to a paint system known and proven at the TTC, as opposed to a paint system that was argued to have met spec on the bogie frame (truck frame). This assures proven long life in the Toronto environment of high road salt content in the winter.
3. Force Majeure due to a Bombardier labour strike July 14 – September 12, 2014 - 47 days of disruption.
Except for the above extension of time provisions, the Contractual baseline delivery schedule has not been changed from when the Contract was executed. The TTC worked with Bombardier during 2013 and 2014 to design and build a spec-compliant accessibility ramp and ramp-door threshold interface, to appreciate the challenges in transferring technology and manufacturing from Europe, and to improve on production quality.
Despite continual CEO-President level conversations on delivery between the two organizations, the challenge to produce quality vehicles has unfortunately proven to be too formidable. This resulted in promised vehicles for the service launch for Route 510 Spadina on August 31st sliding from a forecast of 14 cars in March, to 8 cars in May, to ending up with only 2 cars on launch day. The reduced quantity at the end of August was partly due to the labour strike that started on July 14, 2014.
Bombardier has continued to restructure and retool to recover the delivery schedule. It submitted a revised schedule on June 1, 2015 that takes into account the above extensions of time, delays related to production and quality difficulties, and various claims.
In the June 1, 2015 schedule, Bombardier has committed to completing the delivery of 27 cars for acceptance by year end 2015, and completion of the 204 vehicles of the base LFLRV contract order in 2019. This revised schedule is the latest of a series of proposals submitted in January, February 19th, March 15th and on April 30th. Changes to the schedule from version to version were made partly due to scrutinization by the TTC for
substantiation to the recovery schedule. The following table compares the Contractual (adjusted) schedule to Bombardier’s June 1, 2015 proposal.
In summary, the revised schedule reduces the number of streetcars accepted as of December 31, 2015 by 46 cars, from 73 cars to 27 cars. The number of streetcars accepted by 2019 remains at 204 cars.
The following chart shows graphically vehicle acceptance rates based on the Contractual schedule, and Bombardier’s June 1, 2015 revised schedule.
The proposed June 1, 2015 schedule is being reviewed for acceptability along with Bombardier’s recovery plan.
Bombardier’s recovery plan outlines the carbuilder’s effort to increase production capacity and improve on build quality in its plants in Thunder Bay, Ontario and Mexico, and product quality and support from its supply chain. A new Baseline Delivery Schedule will be considered upon completion of technical assessment and negotiation of pertinent commercial terms in accordance with the Contract.
Bombardier’s claims of delays caused by the TTC’s staff instructions for changes to meet specification, as well as TTC claims against Bombardier will be part of the scope of negotiation.
Based on supporting documentation received to-date, and staff’s assessment of production readiness of Bombardier’s Thunder Bay and Sahagun, Mexico plants,
TTC staff believe that there is a high risk that Bombardier may not be able to meet its revised schedule submitted on June 1, 2015 for year end 2015; and a medium risk that Bombardier may not meet the revised schedule for contract completion of 204 new streetcars by 2019.
An update Board Report will be submitted for the September Board meeting on the status of the actual delivery, agreement on a moving-forward schedule and agreement on commercial terms.
