Evaluating Run-Out Costs
Third Party Procurement
Frequently Asked Questions
Q = Question; A = Answer
Q. Metro Transit (Minneapolis/St. Paul) is soliciting bids for a new tire lease and service contract. It is a federally funded procurement with an estimated contract value of $5 million. Our procurement will consider the cost of running out the current contractor's tires (if there is a change in contractor) in determining the lowest total cost to Metro Transit. One of the interested bidders has requested that we not consider the run-out cost "in the FTA's spirit of free and open competition" and that considering the run-out cost "imposes a barrier to free and open competition of all bidders." We considered run-out cost when awarding our last tire contract, five years ago. Are you aware of any requirement that would prevent Metro Transit from considering run-out costs in determining the low bidder?"
A. We are not aware of any requirement that would preclude you from considering run-out costs when evaluating which bidder will represent the lowest overall cost to your agency. (Answer reviewed September 1, 2009