Project Routemaster
Transport
Bid Model
KPI's: Bid value £4m+ revenue p.a.
Rebuild of bus route tender model used to calculate bid prices to run bus routes.
Requirement
The client is a public transport company which bids to Transport to London (TfL) for the opportunity to run bus routes on a cost plus margin basis. TfL collects all passenger revenues and provides a fixed income to bus companies in order to provide an agreed level of services and competing suppliers bid on a 'cost-plus' basis.
This client had an existing annual bid model which required significant reconfiguration between bids, and it commissioned the development of a new monthly model, to include greater levels of flexibility, and scenario options to allow for comparisons of different fleet make up, for example. (e.g. to compare diesel vs. electric vs. hybrid vehicles options on a given route.)
Solution
Developed a new tender model which calculated costs on monthly basis, with additional functionality to hold standing assumptions (e.g. MPG, miles per kWh, lease costs etc) to enable faster and more efficient development of a bid proposal, based on consistent methodology and cost assumptions basis between contracts.
The model produces outputs suitable for TfL review and management sign off. The model includes a sophisticated scenario functionality to allow different options to be compared to select most appropriate vehicles, for example. In order to provide ongoing value the model also allows for modelling costs for midterm re-bids in relation to service change requests (e.g. if TfL requires more or fewer busses to be run then the delta price can be computed within the same model used for the original bid.)
This updated modelling approach allows more sophisticated bid calculations to be quickly developed when new routes become available for tender.