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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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Rob Lamph, Comptroller |
TITLE:
title
Revenue Contract: Ratification of Prior Unauthorized Use and Reauthorization for Continued Use of State Cooperative Contract for Auction Services for Disposal of UTA Equipment and Vehicles (J.J. Kane Auctions)
end
AGENDA ITEM TYPE:
Procurement Contract/Change Order
RECOMMENDATION:
Ratify prior unauthorized use and re-authorize continued use of State Cooperative Contract PA4741 with J.J. Kane Associates, Inc. dba J.J. Kane Auctions, for the disposal of equipment and vehicles (both revenue and non-revenue) for additional revenue estimated to be $430,000.
BACKGROUND:
Federal Transit Administration (FTA) regulations require that a fair market value determination be completed prior to the disposition of federally funded assets. To meet this requirement, UTA utilizes an existing State Contract to conduct third-party auctions that establish fair market value.
On November 13, 2024, the Board of Directors approved 20034086 under State of Utah Cooperative Contract AR3466 with TNT Auction, Inc. (which was later acquired by J.J. Kane) and a contract period that expired after April 13, 2025.
J.J. Kane currently holds the applicable contract under State of Utah Cooperative Contract PA4741 with a contract period that started on April 14, 2025, and has provided contractor services for the above-mentioned activities to UTA since that time. Therefore, UTA staff is seeking ratification for unauthorized use of the State Cooperative Contract from April 14, 2025, until the present.
DISCUSSION:
J.J. Kane provides auction services for UTA assets, excluding Information Technology items and real property. Over the past five years, UTA has earned an average of approximately $640,000 in revenue per year through these auctions.
Under the general terms of the contract, J.J. Kane conducts the auction and facilitates the transfer of the equipment to the successful bidder. J.J. Kane retains a portion of the auction proceeds based on incurred costs and fees, and the percentages outlined in the contract pricing schedule, which vary by item type. Following each auction, J.J. Kane then submits a summary report to UTA containing all pertinent information related to the equipment sold, including information such as VIN numbers, total sales, and net revenue back to UTA, along with remittance of UTA’s proceeds.
Original State of Utah contract terms were outlined in contract AR3466, which had a base contract term from April 14, 2020, through to April 13, 2025. The State of Utah contract PA4741 extended the auction services state contract through September 1, 2026. UTA continued utilizing the auction services of J.J. Kane under State Contract PA4741 and is seeking ratification of the contract use from April 2025 through February 2026 as well as approval of extending use of the state contract through September 1, 2026.
CONTRACT SUMMARY:
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Contractor Name: |
J.J. Kane Associates, Inc. dba J.J. Kane Auctions |
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Contract Number: |
State of Utah Contract PA4741 |
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Base Contract Effective Dates: |
April 13, 2025 - September 1, 2026 |
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Extended Contract Dates: |
N/A |
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Existing Contract Value: |
$550,328 received April 2025 - December 2025 |
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Amendment Amount: |
Estimated additional revenue $430,000 for 2026 |
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New/Total Contract Value: |
Estimated $980,328 for April 2025 - September 2026 |
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Procurement Method: |
State of Utah Cooperative Contract |
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Budget Authority: |
N/A |
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ALTERNATIVES:
Reject the ratification 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 are deposited into the general fund. Since 2020 the contract(s) have generated approximately $640,000 in revenue per year. It is anticipated that an additional $430,000 will be earned through September 1, 2026.
ATTACHMENTS:
• UTA Notification of Use Letter
• State Contract PA4741 (<https://bit.ly/USC_PA4741>)