Procurement of FCBs – Challenges and Best Practice Solutions

 

Procurement of FCBs – Challenges and Best Practice Solutions

Challenges Best Practice Solutions
1. Developing Tender Documents  
  • Design and specification of tender document: lack of mutually recognised guidelines for technical specifications for FCBs (standardisation); e.g. concerning fuel consumption
  • Joint Procurement: specifying the buses so that they meet the requirements of all the partners/sites involved
  • Project Compliance Requirements (part of a third-party funded project)
  • Sticking to Tender Laws: while procuring a new technology in an immature market environment.
  • Put responsibility into the hands of the PTO to undertake the purchase through standard purchasing arrangements. They have both leverages with suppliers and understanding of their operating requirements
  • Preferably work in with a PTO’s investment cycle and be prepared to support them with information and advice on where to source information about the new technology
  • Consider using an existing framework for Joint Procurement from an experienced site as a template/starting point for defining, e.g. bus specifications, order process and terms & conditions
  • Negotiation and communication with suppliers is critical throughout the tender process; due to lack of experience in this area, the purchaser is reliant on the suppliers to validate assumptions and provide input as to the most efficient way to procure the FCB, particularly concerning the supporting services (maintenance & training)

In the event of starting a Joint Procurement with other sites with a similar context and requirements:

  • Partners need the willingness to compromise on common bus specifications.
  • Appoint a single coordinator for discussions and later on negotiations with suppliers.
  • Using a contract framework to be used by the joint tenderers is the best approach as they specify the contract conditions before tendering - once these are in place, the contracts are relatively simple to put in place
  • It is critical to developing a framework that is scalable and allows for all interested cities to use it, as it provides suppliers with a level of security over the volume of buses to be procured despite the non-committal nature of a framework
2. Selecting Supplier  
  • Lack of Competition/Supply: Manufacturers unresponsive to tender (buses/tenders of under ten vehicles seem to struggle to attract interest); purchaser at a disadvantage; delivery time negotiations can be difficult.
  • Matching proposal specifications with tender specifications: Technology offered not meeting expectations, e.g. buses equipped with a combination of fuel cell and battery with insufficient power to cope with operation in a hilly environment
  • Suppliers were offering different prices in different locations for similar-sized orders, because of factors related to the bus specifications, including liabilities, warranty and damages.
  • Maintenance costs can increase significantly after around the third year of operation, due to increasing replacement/refurbishment costs of some components.
  • Evaluating responses requires expertise in H2/fuel cell technology
  • Communication and flexibility to negotiate with suppliers are critical throughout the tender process
  • Negotiate add-ons once manufacturers have placed bids
  • Some manufacturers more able/willing, to lower prices in response to scale.
  • Source expertise on the innovative aspects of the technology – experienced sites may be able to assist with this.
3. Developing Contracts  
  • Lack of Competition/Supply: Price negotiation; delivery time negotiation; suppliers’ side can dictate the negotiations/conditions
  • Lack of experience in procuring FCBs: Technical and legal details
  • Joint Procurement: Contract needs to allow for a multitude of variations on the service offering which increased risk to suppliers; multiple stages of review required before suppliers accepting the framework and call-off terms / agreeing roles and responsibilities in terms of risk
  • Fuel Cells: Reassurance needed that stacks would last
  • Absolute clarity between all parties on outcomes wanted and compliance with tender/contract details especially where there are sub-contractors involved
  • Specify maintenance: set expectations, define contracts, assign responsibilities (PTA/PTO/supplier); a full maintenance contract in the early years can be helpful for the PTO

Procurement of HRS and FCB – Useful Resources

Resources

Where to find the Resources

Talking to FCB and HRS suppliers and question them on their product specifications and experiences

For lists of suppliers see: https://fuelcellbuses.eu/suppliers

or search the membership list of https://www.hydrogeneurope.eu/directory/industry

If possible, visit their factory and use your performance criteria to question them on performance.

Talking to and/or visiting demonstration sites with operating FCBs and HRSs

For JIVE sites see Figure 0‑1 and/or: https://www.fuelcellbuses.eu/projects/jive, https://www.fuelcellbuses.eu/projects/jive2 and/or https://fuelcellbuses.eu/

Currently (December 2019) the most experienced active sites are Aberdeen, Bolzano, Cologne and London.

The authors of this report can provide personal introductions, see their e-mail addresses on page 2.

Reports from JIVE/JIVE 2 and other ongoing and completed projects, including CHIC and NewBusFuel

On https://fuelcellbuses.eu/publications, for example:

  • Operators’ guide to fuel cell bus deployment (JIVE 2)

Documents with a collation of training materials for staff involved in bus operation, for HRS users and first responders will become available in mid-2021

Reports on planning for HRSs

On https://fuelcellbuses.eu/publications, for example:

  • Recommendations for hydrogen infrastructure in subsequent projects (CHIC)

On http://newbusfuel.eu/publications/, for example:

  • Guidance document on large scale hydrogen bus refuelling
  • Strategies to ensure adequate redundancy
  • An agreed definition of availability for bus depot fuelling stations and recommendations

Reports on planning for FCBs

On https://fuelcellbuses.eu/publications, for example:

  • Lessons learnt from joint procurement of fuel cell buses (JIVE)
  • Final report on the strategies for joint procurement of fuel cell buses (Report for the FCH JU)

On http://newbusfuel.eu/publications/:

  • Common bus operator requirements for future tendering processes (focus: links/interdependencies FCBs/HRSs)