My question is around incentives for bombardier to meet and resolve the MTBF issues.
1) they’ve already hit the maximum penalties under the contract
2) it’s unlikely that the ttc would cancel the contract if they fail to meet it, having only 60 vehicles for the next 5 years while another company spins up a factory would more likely result in a full conversion to busses for most lines in the city
3) if bbd is close ttc is going to do nothing, even if they are not close ttc is in a bad position and will have to eat the ongoing maintenance or fix the issues themselves
3) bbd might not even want the extra 60 vehicles if they are losing money on them, for that matter they might not even want the remaining 140 vehicles
4) cost value equation for fixing these issues may be not good
Keeping in mind that I have not seen the contract, but going by what I've heard from various people involved in the project....
1) Correct. They continue to negotiate to resolve the situation of ongoing issues with the contract, and likely will continue to do so until the end of the term of the contract.
2) Extremely unlikely, for the reasons you have listed.
3) It seems that this is one of the things that is being included in the negotiations. The TTC seems to be quite adamant on this clause, as they did for the TR contract.
3(b))Unlikely. While no one here - myself included - is going to know to that kind of detail, it seemed as if the pricing of the LFLRV contract was predicated on the awarding of the various options on the contract for BBD to really make the contract profitable. Their supply chain (for better or worse) is already in place, and the development of the product will have been paid for by the first 204 vehicles. Anything above-and-beyond that number will be gravy.
4) Maybe from BBD's standpoint, and dependent on the outcome of the negotiations with the TTC. From the TTC's standpoint, their only option for fixing these problems is to buy 400 or 500 buses - along with the construction of 2 more garages to hold and maintain them - to replace the streetcar fleet. Which I think we can all agree is not feasible.
What is ttcs options if the mtbf is not met. What if it stays where it is.
If we assume that this clause is similar to other clauses in other contracts awarded elsewhere - there is likely an awarding of damages for each period of time (weekly, bi-weekly, monthly) that the MTBF is not met, possibly to an upset amount for each period. There may even be a per-vehicle basis for the calculation of that rate, but that seems to be less common (Amtrak is the only organization that I've heard of using that kind of clause).
Dan
Toronto, Ont.