Every state department of transportation (DOT) owns and manages a fleet of vehicles and equipment. An important part of fleet management is the process of disposing fleet assets once vehicles and equipment age or otherwise reach the end of their useful economic life. Some states require disposal of state DOT assets to be done by another state agency while other state DOTs perform this function internally. In either case, once the decision is made to dispose of fleet assets, an important objective is to maximize proceeds from the sale.
State DOTs dispose of fleet assets in various ways. Live auctions can be held at a centralized location, with a large number of items transported from across the state to be sold at a specific date and time. Alternatively, auctions can be held at regional or local venues with limited or even specialized offerings. Such auctions can be annual events, held quarterly, or on some other schedule. On-line auctions can be held on a continuous basis, allowing the state DOT to list and sell items at any time and potentially reaching buyers from anywhere, even when travel to or gathering at a public venue may be restricted as occurred in 2020.
The process used for bids and pricing can also vary. Bids can be open and public or sealed from other bidders. The selling agency can establish a reserve or minimum bid. These options affect the information that bidders have, which, in turn, affects sales prices. Time of year for a sale is a further consideration because the seasonal nature of construction activities and macro-economic cycles can affect the number of buyers and the prices they will pay.
State DOTs also need to consider how best to market and present fleet assets. Reconditioning, repairing, or painting equipment to prepare it for sale can increase sales prices, but that increase must be balanced with the preparation costs. Some buyers may be attracted to sales where equipment is bundled into larger lots. Other types of buyers may be interested only in certain categories of equipment or vehicles (e.g., light-duty vehicles, heavy-duty vehicles, or non-self-propelled assets). Understanding the interests, preferences, and needs of buyers is important to ensure a state DOT is effectively marketing and conducting disposal sales so as to maximize proceeds.
Some state DOTs use alternative methods to manage fleet disposal including asset trade-in programs, guaranteed buyback programs, and guaranteed trade-in programs. These programs can help offset new equipment purchase costs and avoid the need for marketing to buyers. For state DOTs that use another state agency for disposal, these programs can also reduce charge back rates, potentially supporting additional highway maintenance for the same amount of dollars spent by the state DOT. However, these programs can be affected by tax requirements and other regulations that reduce their overall cost effectiveness.
Previous research has addressed the issue of timing the decision to dispose of fleet assets, based on equipment lifecycle considerations. Once that decision is made, the disposal sale process used can significantly affect sales prices, whether the process is managed by the state DOT or by another state agency. Research is needed to provide state DOTs with practice-ready guidelines on how to manage the sales process to maximize sale prices.
The objective of this research is to develop a manual for state DOT fleet managers for selecting effective strategies for preparing, marketing, and selling surplus equipment and vehicles to maximize proceeds. The manual will be accompanied by a decision support matrix with a graphical presentation of options and considerations for the disposal sales process to guide the selection of specific strategies. The matrix should also be publishable as a stand-alone document.
The NCHRP is seeking the insights of proposers on how best to achieve the research objective. Proposers are expected to describe research plans that can realistically be accomplished within the constraints of available funds and contract time. Proposals must present the proposers' current thinking in sufficient detail to demonstrate their understanding of the issues and the soundness of their approach to meeting the research objective.
The research plan will be divided into phases and each phase divided into tasks. The research plan should build in appropriate checkpoints with the NCHRP project panel, including a web-enabled kick-off meeting, a face-to-face interim report review meeting, and additional web-enabled meetings tied to panel review and/or NCHRP approval of key deliverables as appropriate.
Anticipated activities and deliverables in Phase I include but are not limited to:
- A state-of-practice review of fleet asset disposal practices by fleet organizations, including state DOTs, other large public-sector organizations, appropriate private companies, and national equipment auction or marketing companies. Information for the review may be collected from surveys, interviews, documents, research literature, and other sources. Disposal practices of interest include but are not limited to:
- Local, regional, state-level, and national auctions
- Online auctions
- Guaranteed buyback and trade-in programs
Note: Proposers should describe their approach to collecting information, including anticipated challenges (e.g., low survey response rates) and how these challenges will be overcome. A detailed plan for collecting information on current practice, including data collection instruments, target respondents, literature search strategies, and other relevant information will be included in the Amplified Work Plan.
- Documentation and synthesis of the characteristics and considerations for disposal sales methods that affect sales price including but not limited to:
- Bid processes (e.g., sealed bid, reserve, no reserve)
- Timing and seasonal considerations (e.g., new model year, summer paving season)
- Frequency of auctions (e.g., annual, quarterly, or continuous/ongoing)
- Auction location (e.g., centralized or satellite locations across the state)
- Bundling and separating attachments
- Bundling equipment types
- Investment in reconditioning or repairs prior to sale
- Partnering with another state agency to increase disposal sale prices
- Sales tax and other sales-related costs or requirements
Note: Phase I will culminate with an Interim Report documenting the activities and findings of Phase I along with a detailed plan for Phase II and a proposed outline of content for the manual and a design mock-up for the decision support matrix. Following a one-month review of the Interim Report, the research entity will present the Interim Report at a one-day, in-person meeting, to be held in Washington, D.C. NCHRP will provide a meeting facility and pay travel costs for panel members to attend the interim meeting.
Phase II will focus on developing the final deliverables. Anticipated deliverables include but are not limited to:
- Decision support matrix
Note: The decision support matrix will be in a downloadable digital format using software that is readily available to state DOT staff such as Microsoft Excel or Word. The development of a web-based tool or software is not requested.
- Technical report documenting the research
- Stand-alone Executive Summary of the research findings
- Fact sheets on essential findings and concepts suitable for state DOT leadership
- Presentation slides with speaker notes in PowerPoint format summarizing the project
- A stand-alone technical memorandum that identifies implementation pathways, key implementers of the results, and well-defined scopes of work for pilot implementations of the guide. The technical memorandum should provide adequate detail on timelines, budgets, and staff resources needed for specific activities to implement the results of NCHRP Project 13-09. Potential implementation activities include evaluating practices at a state DOT and identifying opportunities for improvement or developing and delivering a training workshop for fleet managers (see Special Note B).
Note: Conducting implementation activities is not anticipated as part of NCHRP Project 13-09.
Following receipt of the draft final deliverables, the remaining 3 months shall be for NCHRP review and comment and for research agency preparation of the final deliverables.
A. Proposals should include a task-by-task breakdown of labor hours for each staff member as shown in Figure 4 in the brochure, "Information and Instructions for Preparing Proposals", (updated November 2020; http://onlinepubs.trb.org/onlinepubs/crp/docs/ProposalPrep.pdf
). Proposals also should include a breakdown of all costs (e.g., wages, indirect costs, travel, materials, and total) for each task using Figures 5 and 6 in the brochure. Please note that TRB Cooperative Research Program subawards (selected proposers are considered subawards to the National Academy of Sciences, the parent organization of TRB) must comply with 2 CFR 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
. These requirements include a provision that proposers without a "federally" Negotiated Indirect Costs Rate Agreement (NICRA) shall be subject to a maximum allowable indirect rate of 10% of Modified Total Direct Costs. Modified Total Direct Costs include all salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each lower-tier subaward and subcontract. Modified Total Direct Costs exclude equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each lower-tier subaward and subcontract in excess of $25,000.
B. The NCHRP is a practical, applied research program that produces implementable products addressing problems faced by transportation practitioners and managers. The benefits of NCHRP research are realized only when the results are implemented in state DOTs and other agencies. Implementation of the research product must be considered throughout the process, from problem statement development to research contract and beyond completion of the research. Item 4(c), "Anticipated Research Results," must include the following: (a) the "product" expected from the research, (b) the audience or "market" for this product, (c) a realistic assessment of impediments to successful implementation, and (d) the institutions and individuals who might take leadership in deploying the research product. The project panel will develop and maintain an implementation plan throughout the life of the project. The research team will be expected to provide input to an implementation team consisting of panel members, AASHTO committee members, the NCHRP Implementation Coordinator, and others in order to meet the goals of NCHRP Active Implementation: Moving Research into Practice
, available at http://onlinepubs.trb.org/onlinepubs/nchrp/docs/NCHRP_ActiveImplementation.pdf.
C. Proposals are evaluated by the NCHRP staff and project panels consisting of individuals collectively very knowledgeable in the problem area. Selection of an agency is made by the project panel considering the following factors: (1) the proposer's demonstrated understanding of the problem; (2) the merit of the proposed research approach and experiment design; (3) the experience, qualifications, and objectivity of the research team in the same or closely related problem area; (4) the plan for ensuring application of results; (5) how the proposer approaches inclusion and diversity in the composition of their team and research approach, including participation by certified Disadvantaged Business Enterprises; and, if relevant, (6) the adequacy of the facilities.
Note: The proposer's approach to inclusion and diversity as well as participation by Disadvantaged Business Enterprises should be incorporated in Item 11 of the proposal.
D. The Information and Instructions for Preparing and Submitting Proposals for the Transportation Research Board's Cooperative Research Programs
were modified in November 2020 to include maximum file size and page limits for all CRP proposals. Proposals must be submitted as a single PDF file with a maximum file size of 10 MB. The PDF must be formatted for standard 8 ½” X 11” paper, and the entire proposal must not exceed 60 pages (according to the page count displayed in the PDF). Proposals that do not meet these requirements will be rejected. For other requirements, refer to Chapter V of the instructions
E. Copyrights - All data, written materials, computer software, graphic and photographic images, and other information prepared under the contract and the copyrights therein shall be owned by the National Academies of Sciences, Engineering, and Medicine. The contractor and subcontractors will be able to publish this material for non-commercial purposes, for internal use, or to further academic research or studies with permission from TRB Cooperative Research Programs. The contractor and subcontractors will not be allowed to sell the project material without prior approval by the National Academies of Sciences, Engineering, and Medicine. By signing a contract with the National Academy of Sciences, contractors accept legal responsibility for any copyright infringement that may exist in work done for TRB. Contractors are therefore responsible for obtaining all necessary permissions for use of copyrighted material in TRB's Cooperative Research Programs publications. For guidance on TRB's policies on using copyrighted material please consult Section 5.4, "Use of Copyrighted Material," in the Procedural Manual for Contractors.