[quote name='keepinitsafe' post='159629' date='Oct 29 2007, 20:27 ']Well, I guess you could have another manufacturing company build bodies for you guys. 4 Guys in PA builds a pretty solid rig and does alot of work with the Spartan Chassis. Also you have Crimson who builds a pretty solid rig as well.[/quote]
I wonder if the county had a surety bond written on this contract or other insurance coverage that could cover any losses? I know this is something Pierce pitches as a benefit of their factory. Seems like if the county entered into a contract and purchased 37 chassis with the intent of having Elite build bodies on them and now Elite cannot meet the contract it can lead to a lot of unexpected costs. Said costs would include having to spec and bid another contract, potential for higher costs for the new contract, potential for sub-optimal build quality and associated higher lifetime maintenance costs and lowered resale value on the 36 chassis since they were built for the Elite spec (not the spec they will now be built on) and the continued cost for "bubblegum and duct tape" to keep older rigs on the road beyond their expected retirement. If any of the chassis can't be used there will also be a cost for the loss on the sale to dispose of the chassis. Given the cost of fuel you could even tack on the higher fuel costs of the older rigs vs. those of what I assume would be more fuel efficient Spartan-Elites.
What a mess, I hope the county doesn't lose their shirt on this and I hope they find a builder who will build on the Spartan chassis that are already owned by the county. It does beg the question though as to why more due diligence wasn't done by the county's purchasing department before this contract was signed. If you assume each rig is $350,000 then a 37 rig order would ring out at $12,950,000. That is a serious chunk of money to risk on a company that is not only bankrupt, but so insolvent that their suppliers won't extend them credit based on a contract of that size (I assume this is why the contract was canceled, their inability to fulfill it within time limits).
It does sound like the Chief did the right thing, as much as this may be a financial and operational hit. The county could have been burned a lot more if they got a fleet of rigs built by a company that was teetering on the brink of bankruptcy and was cutting corners to cut costs and then went out of business after delivery and left the county with a fleet of rigs that always broke and couldn't be repaired under warranty and without access to factory parts.
At least rig #1 looks nice.
John
I wonder if the county had a surety bond written on this contract or other insurance coverage that could cover any losses? I know this is something Pierce pitches as a benefit of their factory. Seems like if the county entered into a contract and purchased 37 chassis with the intent of having Elite build bodies on them and now Elite cannot meet the contract it can lead to a lot of unexpected costs. Said costs would include having to spec and bid another contract, potential for higher costs for the new contract, potential for sub-optimal build quality and associated higher lifetime maintenance costs and lowered resale value on the 36 chassis since they were built for the Elite spec (not the spec they will now be built on) and the continued cost for "bubblegum and duct tape" to keep older rigs on the road beyond their expected retirement. If any of the chassis can't be used there will also be a cost for the loss on the sale to dispose of the chassis. Given the cost of fuel you could even tack on the higher fuel costs of the older rigs vs. those of what I assume would be more fuel efficient Spartan-Elites.
What a mess, I hope the county doesn't lose their shirt on this and I hope they find a builder who will build on the Spartan chassis that are already owned by the county. It does beg the question though as to why more due diligence wasn't done by the county's purchasing department before this contract was signed. If you assume each rig is $350,000 then a 37 rig order would ring out at $12,950,000. That is a serious chunk of money to risk on a company that is not only bankrupt, but so insolvent that their suppliers won't extend them credit based on a contract of that size (I assume this is why the contract was canceled, their inability to fulfill it within time limits).
It does sound like the Chief did the right thing, as much as this may be a financial and operational hit. The county could have been burned a lot more if they got a fleet of rigs built by a company that was teetering on the brink of bankruptcy and was cutting corners to cut costs and then went out of business after delivery and left the county with a fleet of rigs that always broke and couldn't be repaired under warranty and without access to factory parts.
At least rig #1 looks nice.
John
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