Last October, the City of Detroit awarded a three-year, $11.5 million contract for vehicle parts inventory management to Vitec LLC, a southwest Detroit-based member of the Global Automotive Alliance with expertise in warehousing and distribution. It was the largest contract awarded to a minority firm in 2015, and one of the largest awarded to any minority firm by the city in the past five years.
To say the least, the city is already quite pleased with Vitec’s performance, and equally pleased that it was a hometown minority-owned company that won the bid through the presentation of a superior proposal that far outshone the performance provided by their predecessor, Atlanta-based NAPA Auto Parts, which had held the contract for the past eight years.
In a nutshell, Vitec, which was founded in 1998, will be responsible for maintaining a steady and reliable supply of parts for all of the city’s 2,400-vehicle fleet, which includes police and fire response vehicles, street maintenance trucks, parking enforcement cars, grass-cutting and forestry, and other equipment. The General Services Department employs 80 mechanics to maintain this fleet out of four municipal garages, each with a parts storeroom to be operated by Vitec/Mancon staff.
This reliability of supply comes in handy when those vehicles are in need of repair, because the faster they can get the parts they need, the faster they can return to service. In the case of fire and police vehicles, Vitec CEO Sylvester Hester said it’s safe to say that this reliability has the potential to affect – and improve – response times in emergency vehicles such as police cars, fire trucks, and EMS vehicles.
“In essence, we’re procuring the parts themselves, as well as providing that part to that mechanic once he comes to the door at greater than an 85 percent fulfillment rate. That means that out of 100 times the mechanic goes to the parts department, the department should have that part 85 percent of the time,” said Hester.
Vitec has partnered with Mancon Inc., which specializes in supply chain management for governmental jurisdictions across the nation. Under the contract, the companies will procure the OEM, aftermarket, or remanufactured parts according to city requirements, as well as the lubricants, greases and other fluids and supplies supporting vehicle repairs, and will bill the city as parts are issued for repairs.
The previous service provider “had not been performing up to contract specs”, said Boysie Jackson, Chief Procurement Officer for the City of Detroit. That unfortunate situation, plus the fact that NAPA’s contract was expiring, made Jackson decide to put the contract out for bid rather than renew NAPA’s contract. Also, the NAPA contract was only for the supply of parts, whereas the Vitec contract includes an inventory management component that will hopefully save both time and money.
Vitec came to the table with a bid that included a three-year cost reduction of approximately $338,000. That plus other elements of their proposal made it clear to Jackson that this was the right company for the job, so he prepared a presentation for the city council, Mayor Duggan, and the bankruptcy oversight committee. All three were impressed. Since that time, Both Boysie and Brad Dick, Director of General Services for the city, said they were equally impressed with how smoothly Vitec was able to affect the transition from the old to the new, and then ramp it up to such a high fulfillment rate in such a relatively short period of time.
“We’re glad that a minority company was able to utilize the bid process, put a team of people in place to look at the city’s needs, and did an exceptional job in the competitive process and provided a competitive quote that enabled the general service division to be able to get parts on a timely basis for the next three years.”
Hester is glad as well that the partnership seems to be working so well so far.
This is a big deal where we are right now, to be positioned here. It fits inside of our growth strategy and where we want it to grow with these types of contracts that require an inventory management skill set. We’re positioned very well, and this is a very strong contract,” he said.
“This is a new generation deal and opportunity. Because we always strive and talk about that proverbial win-win situation, but in this case it truly is a win-win-win. Each of the three stakeholders, that being the City of Detroit, VITEC, and the citizens of Detroit are all basically getting what they believe is value out of this relationship.
“We really appreciate the vision and leadership of Mayor Duggan. Providing these types of opportunities for Detroit-based black business owners. His administration is really laying the groundwork and opening doors for all Detroiters really.”