Welcome to 2022 and the start of the first full season of the PAMSP “3rd party vendor system” where you may see over 30 sites operating in the near future… for those of you new to PAMSP’s history that is 50-30% of the total sites that were operating in the past.
For those of you who want things to “go back to the way they were” – nearly 70 sites, over 500 Instructors, centrally administered with a single Commonwealth-wide curriculum – good luck with that, especially what will happen with the Program motorcycles over the next few years.
In August of 2021 we published a post called “How will PAMSP operate without [program] motorcycles?”. While it may have sounded hyperbolic at the time to many of you it’s important to revisit in 2022 as it applies to the motorcycles used in PAMSP training.
For those of you new to the Pennsylvania Motorcycle Safety Program (PAMSP) it operates a PennDOT/PAMSP owned fleet of around 1,100 training motorcycles purchased via the Motorcycle Safety Education Account (MSEA), a PAMSP-specific receipts account funded by PA motorcyclists, and until 2020 the PAMSP fleet was maintained by a few dedicated PAMSP mechanics, centrally warehoused with maintenance costs paid for by PAMSP via the MSEA.
While PennDOT, via PAMSP, ultimately paid for the bikes the program administration vendor had to float the funds to buy them, and was then reimbursed by PennDOT. This meant the vendors had to have cash on hand, would have to pay for the money (interest, etc.) but the assets were the property of PAMSP.
These bikes make up the backbone of the program and are used by students for every Beginner Riding class.
This was the system for 35 years.
It will soon no longer be the case.
“Program” motorcycles today:
Today, since the 2020 introduction of the “3rd party” PAMSP contracts by PennDOT, the “Program” motorcycles are being rented to each vendor by PennDOT. Fixed assets already purchased by PAMSP via the MSEA are being rented back to PAMSP vendors – even during the off season when they can’t be used.
The rental cost is $20 per bike per month. If there are (14) motorcycles required per site that’s $280 per month, $3,360 per year, per riding range. Operating 36 sites all with full single ranges? That’s nearly $130,000 in rental fees per year. If all 57 contracted sites were operating the motorcycle rent will be generating nearly $200,000 per year. Money paid by vendors back to PennDOT… to rent PennDOT owned motorcycles.
PennDOT, via PAMSP & the MSEA, is still paying for the maintenance on those motorcycles, maintenance that is now done by various providers at the behest of the individual providers.
“Program” motorcycles in the future:
Apparently there will no longer be PAMSP owned Program motorcycles in the future. All of the motorcycles are to be purchased and owned by each vendor operating in Pennsylvania.
Right about now you’re probably thinking:
“But what happened to the 1,100 Program motorcycles?”
They will go to auction, to be sold to the public.
You may be asking:
“Can’t the PAMSP-owned bikes be purchased by the vendors (who are already renting them)?”
Apparently not, unless they want to attend the auctions and bid for them like anyone else.
“Can’t the rental fees pay for replacement bikes?”
Yes, to the tune of 26-42 bikes a year, which is ~50% the replacement rate if you turned over (replaced) all training bikes over a 10 year cycle, ~20% if you did it over 5 years.
“But who will pay the maintenance on bikes purchased by 3rd party vendors?”
PennDOT will continue to pay for the maintenance on 3rd party motorcycles via the MSEA, but will have no control over what bikes are used, costs to maintain them, etc.
“What if a vendor leaves the Program in the future?”
They can take all of their bikes with them creating an issue for the next vendor, and PAMSP, who will need motorcycle inventory on hand to replace the exiting vendor.
“What will it cost to replace all of the Program motorcycles?”
If each motorcycle used today averaged $4770 to replace ($4500 + tax) it would cost nearly $5,000,000 to replace all of the Program motorcycles in inventory today. Operating (57) single range sites with (14) motorcycles each it will cost nearly $4,000,000 to purchase only those motorcycles needed to run the current sites under contract.
What does this mean for the future of the PAMSP?
What used to be a stable, well functioning program now will see additional uncertainty added to PAMSP operations – with the very real possibility that vendors leaving the Program will take bikes with them.
PAMSP training will be limited to only those vendors who can bring their own bikes, limiting the capability to transition vendors over time, limiting program changes outside of the 2026 contract end.
PAMSP will be totally dependent on 3rd party vendors for training.
Lost cost bidders, hesitancy to bid on future contracts, disruptions to training operations, supply chain issues, lack of guarantees to vendors, etc. are all very real risks facing the program.
– Only those vendors who have the capital to purchase [many] motorcycles will be able to bid on future PAMSP contracts.
– Motorcycles taken from the Program at the end of contracts will need to be replaced to resume training operations, creating additional disruptions.
– Lack of motorcycles suitable for training, logistics and supply chain issues can limit the ability to replace motorcycles in a timely, or cost effective, manner.
– Vendor contracts are currently 2 years, with (3) 1 year options – a single vendor teaching at (15) sites will need to spend over $1,000,000 to purchase new bikes to supply their sites, for what may only be 2 years of operation.
– What happens to the motorcycles if vendors lose future bids?
Supply chain issues:
The number of training-suitable motorcycles produced every year is very small. Vendors who need to purchase motorcycles need to know now how many they need, need to put orders in early so that a few more bikes can be made available.
Reduction in quality:
PAMSP has historically had among the best training motorcycles available. Now vendors facing high costs and scarcity of training motorcycles may purchase second hand, older, motorcycles, which can reduce the student training experience.
Lack of accessible training:
In 2020 PAMSP, for the first time in its history, was going to be able to cover all of the counties in the Commonwealth. With the current trend this will never be the case.
Multiple private 3rd party companies will likely cost more in transport, labor, etc. than dedicated resources maintaining a more standardized fleet. PennDOT, in the future, will end up paying fees to maintain a diverse fleet of newer & more technologically advanced motorcycles across 5 different vendors and many different motorcycle mechanics.
Purchasing and maintaining a fleet of motorcycles will likely increases cost per students as additional overhead is now being transitioned to the training vendors.
What used to be a centrally managed environment is becoming increasingly complex with numerous areas of overlap, this is now extending to the motorcycles that served as a reliable resource for PAMSP training being transitioned to 3rd party commercial providers.
After years of instability PAMSP is heading for additional disruption in the form of a fleet retirement and transition to 3rd party dependence.
With a small number of motorcycles suitable for training vendors, unsure about their future in Pennsylvania, will need to start making plans on how to outfit their companies with the motorcycles they need to continue operations.
Nothing is free and the purchase of new motorcycles by commercial training entities will have an unknown impact on future training cost and availability, at a time where supply chains are strained, inflation and interest rates are climbing.
PAMSP requires stability to operate efficiently, to meet it’s mandate and to provide reliable and timely training for its students, to maintain the sites it needs to operate and to attract the Instructors it so badly needs to complete its mission.
No longer a single, unique, well oiled service provider PAMSP is slowly being broken up into commercial concerns to mimic the dysfunctional programs it mirrors across the country.