How will PAMSP operate without [program] motorcycles?

Historically PAMSP – for over 30 years – has operated at over 60 sites with “Program supplied motorcycles” for Basic Rider Courses. The ~1,100 bikes were purchased and owned by the Program (PennDOT), centrally housed during the winter, stored locally at sites in PennDOT supplied sheds during the training season and maintained by a small number of PAMSP mechanics. In the end it meant that PA had one of the best motorcycle training fleets in the Nation.

In 2020 and 2021-2026 PennDOT has decided to forgo the +30yr old practice of having a single administrator, single curriculum and single Instructor Corps for Motorcycle Safety Training across the Commonwealth by moving to “3rd party” training – aka “a Free for All”. This will add a multitude of companies, curricula, complexities, create logistical issues, loss of sites, Instructors, etc. as multiple vendors and curricula will exist concurrently within PA.

If you take the time to read through the past RFP, which largely make up the “contract” between PennDOT and PAMSP Program Administrators you’ll see that in the 2020 “Emergency” RFP and the 2021 “Free for All” RFP key provisions are missing – or are they? This is what results when you don’t have people who actually know how to run a motorcyclist training program proof read your RFP… and it’s been offered, free of charge.

One of those key provisions is regarding who is supplying training motorcycles for Beginner rider course in PA. That being said let’s take a fun – but serious – look at how training motorcycles are purchased, used, stored and maintained in the PAMSP…

In many states with 3rd party driver/rider programs the cost of training vehicles are the responsibility of the vendor, not the State. What could happen if PennDOT is no longer supplying training motorcycles to training vendors after 2020?

Let’s take a look.

How PAMSP currently purchases motorcycles:

Interestingly enough PennDOT doesn’t purchase it’s training motorcycles directly. The Program Administration company is expected to source and purchase the motorcycles. After a period of time, and once the bikes have been delivered, PennDOT will reimburse the Program Administrator and pay for any future maintenance.

With so many different training providers possible across the Commonwealth regardless of how this process worked in the past it’s going to have some interesting new complications as multiple vendors could be purchasing motorcycles for PennDOT, they’re going to be purchasing them on their own or they’re going to stop loaning motorcycles to training providers.

The cost of money:

While we’re considering how PAMSP motorcycles are purchased also keep in mind the “cost of money”. While PennDOT has reimbursed training companies in the past for the purchase cost of training motorcycles most vendors won’t simply have the cash sitting around to make a bulk equipment purchase.

That means the purchase generally has to be financed, and those costs aren’t paid by PennDOT but by the vendor, and never reimbursed.

The future of PAMSP motorcycle purchases:

In the 2017 RFP, page 8, section I-22 of “RFP 3516R09” PennDOT included the following:
“PennDOT will provide motorcycles and other specified equipment, except as set forth in
this RFP as well as storage sheds.”
This very clearly differentiates motorcycles from equipment, both from storage sheds, who will/will not be providing them.

According to the most recent RFP (3520R02), “Statement of Work”, page 10, section C, “Equipment”:

“With the release of the most recent RFP The selected Offeror must provide their own equipment to run the training program… PennDOT will not reimburse for the purchase of equipment; however, PennDOT will reimburse for the actual cost of maintenance, parts, labor, administrative cost and transfer of bikes (this includes mileage and wage cost), of the motorcycles and fuel used for training courses…The selected Offeror is responsible to ensure that there is an appropriate number of motorcycles..The selected offeror will be responsible for the maintenance of bikes..”

While there are some mentions of “PennDOT equipment” there is nothing clearly stating, as in previous RFP, that Program bikes will be supplied by PennDOT – or sheds for that matter. If this is the case this will present a further blow to a Program that is facing the most disruptive changes in its history.

It is important to note that in the “Emergency RFP”, 3520R01, the contract language is nearly identical with the 2021 RFP 3520R02. Contained in the “Emergency RFP’s document set are a number of Addendum. In Addendum 1, page 2, item 4 the following appears:
“Should a selected provider wish to use PennDOT equipment, PennDOT will workwith the provider to determine what equipment will be loaned. Currently, PennDOT maintains the following types of training motorcycles in its fleet: BMWs, HarleyDavidsons, Suzukis, Kawasakis, Yamahas, and Hondas.”

Perhaps PennDOT will allow providers to borrow PAMSP motorcycles for their classes, as well as make accommodations for 3rd party vendors who want to use their own bikes – we’ll have to wait to have that clarified.

Does PennDOT supply/own the rider training sites?

Generally, no.

Most training sites – classrooms and riding area (called “ranges”) are located by the Program Administrator and borrowed or rented from 3rd parties. These sites could be at schools, churches and other places of business that are otherwise unaffiliated with motorcycling. The sites have to meet specific requirements, be able to house certain items – such as a shed full of training motorcycles.

Very few sites are PennDOT owned, generally existing facilities with paved areas acceptable for motorcycle training, not dedicated to it.

In order to put motorcycles at these sites, they must first be purchased. For the average standard site PennDOT has enough motorcycles today in the current fleet to equip 75 sites, just about the number of sites in inventory today (including double range sites).

Single Site motorcycle costs:

For a standard site, 14 bikes are generally required for Basic training use. A Suzuki “TU250” 250cc training bike goes for around $4K new. For a single site that is nearly $60,000 in new motorcycles – the cost of which is borne by the provider, even under the reimbursement model of the past, but moving forward a cost training providers may have to pay in full.

The decrease in the number of sites can lead to increased use of these bikes but if you had a 3yr depreciation a training provider would need to be capitalized for a $60K purchase per site, every 3 years.

Multiple site motorcycle costs:

What if you wanted to provide Basic training at more than one site?

If you wanted to bid on (10) sites you’d need to have up to $600,000 – perhaps $200,000/$120,000 a year spread out every 3-5 years.

That’s a significant amount of capitalization – the responsibility of the provider – who’s only PAMSP income is derived from reimbursement on a per-student trained basis by PennDOT.

Cheaper bike options?:

Providers certainly could find bikes on auction, keep them longer, but as they age the training experience can suffer, maintenance costs can increase, and it can become more difficult to keep the bikes in service.

Take classes in other States/from different providers and it quickly becomes apparent that the quality of their bikes significantly impacts the training experience.

What about dealerships?:

While many sites have nothing to do with motorcycles you’re probably asking yourself “what about training at Motorcycle dealers”? They will have a competitive advantage as they may own the bikes they are using, have easier access to capital to acquire bikes, have existing vendor relationships, etc. to facilitate the purchasing of training motorcycles.

These types of locations – with both classroom and range (riding) space are limited and the bikes that will be ridden there will be limited, typically, to the brands the vendor offers – and some brands don’t make optimal training bikes for novice riders.

Could vendors “sponsor” motorcycles for training sites that aren’t affiliated with a dealer? Perhaps, but what would be the entanglements there (simple advertising or something more advanced), for how many motorcycles and for how long – if a dealer goes out of business and needs to reclaim and/or can no longer provide training motorcycles that site could be at risk.

What about the existing PAMSP fleet?:

The majority of the PAMSP motorcycles are 125-250cc air cooled bikes with carburetors. The longer they sit the less likely they are to run which is why the attention of maintenance staff was so critical to keeping these bikes running, especially when they were stored for long periods of time.

The fleet mechanics (3-4 of them) were the unsung heroes of the Program not only maintaining – which includes all aspects down to engine rebuilds – but also moving the bikes from central storage to location, ferrying replacement bikes, range-side repairs and even range painting. They were all terminated in 2020.

The existing fleet was abandoned in their site sheds and in the primary warehouse when PennDOT cancelled the 2020 PAMSP season by cancelling the PAMSP Administration/operating contract in April of 2020. While the contract was under suspension Total Control offered to maintain the motorcycles but PennDOT would not permit it. Later in the year PennDOT first changed all of the locks on the sheds and then ferried the motorcycles back to the central warehouse in Harrisburg.

While some vendors may be able to use the bikes in 2020 there are some reports that some of the fleet are already appearing at motorcycle auctions. While the older bikes are typically auctioned off it is important to note that many of these are irreplaceable and once they are gone they are gone for good.

The motorcycle supply chain:

You may be wondering what all of the fuss is about. If vendors need motorcycles they can just go out to a dealer and purchase, new, the 14-28 bikes they need for their range, right?

Not exactly correct.

Many vendors receive a certain allotment of the bikes they can sell for that calendar year, may have some left over from the previous year but they won’t have motorcycles of a specific type/brand in the appropriate number for fleet sales. They are just not organized that way at a dealer or a manufacturer level.

If you need a number of specific motorcycles for a single site you may need to wait a year until they become available. If you have a number of vendors across the Commonwealth looking for over a thousand bikes all at the same time this can create an addressable supply chain shortage.

Over the following years as training vendors rotate out their training fleet contention between vendors can also create or experience supply chain issues in the future. This is another unintentional secondary effect of the PAMSP changes by PennDOT. Where current fleet management practices allow a rotation out of assets on clear schedule from a central location now up to 70 sites will all have different asset/fleet management schedules.

The ‘solution’ to this will be retaining motorcycles longer, increasing maintenance costs the Program must pay for and decreasing fleet quality which will now be asymmetric as different vendors will be maintaining the bikes in different ways.

Motorcycle storage…

Another question you’ve probably arrive at is where will these bikes be stored?

That is a great question and currently there are two locations – on site (during the season) and at a central warehouse (when they are not in use).

Nowhere in the 2021 RFP does it state that, unlike the past, PennDOT would supply sheds for Motorcycle storage.

What it looks like moving forward is that training vendors may have to pay for motorcycles, sheds (which may now be around the year storage) and all other items to sustain training.

What about helmets?

You may be seeing a pattern but for students to ride they need to be wearing a DOT approved 3/4 or better helmet. These used to be provided by the Program but with COVID that may no longer be the case. Helmets are difficult to reliably sanitize so it may be that moving forward in 2021 students will need to bring their own helmets, but we’ll have to wait and see on that one.

Where would the excess money be going?:

If PennDOT paid for the motorcycles out of the PAMSP ‘account’/budget you might be thinking – by not buying motorcycles in the future, with all equipment expenses being borne by the training providers – isn’t that going to “save” the Program money? What will they do with those funds?

That’s a great question.
The answer?
No one has any clear idea at this time, nor does anyone appear to be asking.

According to a motorcycle right group located in Pennsylvania they have access to review the PAMSP motorcycle training fund. To our knowledge they have never produced an audit, a public facing audit, of PAMSP expenditures. This after the 2017 RFP contained the following RFP question: “Can an estimate of average maintenance cost for fleet over last 3
years be provided?”.

The answer from PennDOT – who pays for Motorcycle maintenance:
“PennDOT does not currently have this information”.
Yikes.

PennDOT should have additional oversight with regards to their management of PAMSP but they don’t and the simple fact that we are where we are in 2020/2021 – and COVID was not the cause – is emblematic of that simple fact.

Looking forward to 2021:

Training vendors may not want to bear the cost to purchase motorcycles or storage for them in order to train PA Motorcyclists which could have an impact on the ~15-20K students trained yearly via PAMSP (which is only ~13% of all yearly motorcycle permit holders).

Perhaps PennDOT will permit vendors to borrow PAMSP program bikes & will continue to purchase sheds for site use but those questions, as of now, remain unanswered. Questions all addressed in the contract that was so recently cancelled, which had it remained would have allowed a rapid restart of the program in 2020 as well as plans for 2021.

While Basic courses typically use Program supplied motorcycles the Intermediate and Advanced classes require students to bring their own bikes. As Basic Instruction is the overwhelming majority of PAMSP training PennDOT not supplying bikes could, and likely will, lead to a significant reduction in the number of training sites.

How will PAMSP operate without motorcycles?

While that may be a bit hyperbolic and PennDOT may continue to ‘lend’ bikes to providers we’ll need to wait to find out in 2021.

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