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TO: |
Board of Trustees |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Viola Miller- Chief Financial Officer |
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PRESENTER(S): |
Joan Burke- Manager- Capital Asset Controls |
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Daniel Hofer- Director- Capital Programming and Support |
TITLE:
title
Contract: Auction Services for Disposal of UTA Equipment and Vehicles (JJ Kane Auctions)
end
AGENDA ITEM TYPE:
Procurement Contract/Change Order
RECOMMENDATION:
Ratify the execution of UTA’s contract with JJ Kane Auctions executed on June 28, 2023 for equipment and vehicle (both revenue and non-revenue) disposals under a State of Utah Cooperative Contract for $1,227,000 in estimated revenue.
BACKGROUND:
The Federal Transit Administration regulations require that for disposition of federally funded assets, a fair market value determination must be made prior to an asset being disposed. To meet this requirement, UTA utilizes an existing State Contract to perform third-party auctions to establish the fair market value determination. The State Contract was executed with TNT Auction, Inc. TNT Auction, Inc was acquired by JJ Kane Auctions on June 28, 2023, and is now the Contractor providing these services.
DISCUSSION:
This contract provides auction services to UTA to help meet the Federal Transit Administration’s regulation that a fair market value determination be completed for asset dispositions. JJ Kane provides auction services for UTA’s assets for everything other than Facilities or Real Property.
The general terms of the contract are JJ Kane Auctions will conduct the auction and transfer of the equipment to the winner of the auction. JJ Kane will retain a portion of the revenues based on incurred costs and fees as well as any percentages outlined in the pricing schedule contained in the contract based on the type of item sold. JJ Kane then submits a summary report containing all pertinent information related to the equipment sales including information such as VIN numbers, total sale, and net revenue back to UTA, along with a check. This contract is a State of Utah contract and has a base contract term from April 14, 2020, to April 13, 2025. The contract does not reference any additional option years. UTA will either extend its contract with JJ Kane once it is extended with the State, or reprocure auction services in 2025. Estimated revenue is based on planned equipment retirement schedules. Moving forward, the Capital Asset Controls group will provide annual updates on auction revenues to the Board for Trustees.
CONTRACT SUMMARY:
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Contractor Name: |
JJ Kane Auctions |
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Contract Number: |
State Contract AR3466, PO #20034086 |
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Base Contract Effective Dates: |
June 28, 2023 - April 13, 2025 |
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Extended Contract Dates: |
N/A |
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Existing Contract Value: |
N/A |
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Amendment Amount: |
N/A |
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New/Total Contract Value: |
Total estimated contract revenue $1,227,000 |
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Procurement Method: |
State of Utah Cooperative Contract |
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Budget Authority: |
N/A |
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ALTERNATIVES:
Terminate this auction contract for convenience and either reprocure auction services or undertake sale of vehicles on an in-house basis.
FISCAL IMPACT:
This is a revenue generating contract where proceeds from the auctions go to the general fund. UTA has received $779,117.49 in revenue from this contract since JJ Kane began providing services June 23, 2023. The total anticipated revenue for these auctions (including past revenue) is $1,227,000 through April 13, 2025
ATTACHMENTS:
UT State Contract AR3466 TNT