To:HernanAcavedoFrom:PeteCannito,TimGardnerRe:LocomotiveProcurementRecommendationsDate:September18,1996BaseduponthethreedayswehavespentwithyouandyourteaminterviewingseniormanagersoftheCommission,wewouldsummarizeourobservationsandrecommendationsasfollows:1.TheCommissionshouldregarditslocomotiveacquisitioninitiativeaspartofanoverallprogramoflocomotivefleetupgradeandenhancement.Thisprogramencompassesnotonlyacquiringtheadditional30locomotivestheCommissionrequiresbutalsoaddressingthevariousdeficienciesoftheCommission’sexistingfleetof80locomotives.Suchaperspectivehastwoadvantages:first,itenablestheCommissiontotakeacomprehensiveviewofitsresourceallocationalternatives;second,itoffersamoreattractiveprojectscopetopotentialsuppliers–therebylikelybroadeningtheuniverseofinterestedsuppliersandencouragingmoreaggressivepricing.2.Inspiteofthevariousdeficienciesexperiencedwiththecurrentlocomotivefleet,thatfleethasbeensuccessfulinperformingitstask.Itsfundamentaldesignissound.Manycomponents,however,embodyobsoletetechnology,andmanyofitspartsconsequentlyareexpensivetoreplace.Thereareproblemsinthedesignofsomecomponents,forexamplethetendencyofthetractionunittoleakoil.Somemaintenanceoperationsaredifficulttoperformduetoproblemsofcomponentaccessibility.Themostsatisfactorynewlocomotive,therefore,maybeanadaptationoftheexistingMitsubishidesign--keepingtheprovenfeatures,correctingdeficiencies,andupgradingtechnology.Thisapproachmightprovidethemostreliableandprovenequipment,itwouldprovideameasureofconsistencywiththeexistingfleet,anditwouldreducetheriskassociatedwithnewunprovendesign.Moreover,itmightreducemanufacturerdesigncosts.Itwouldbeworthaskingmanufacturerstobidonnewlocomotiveseitherusingtheexistingdesignplatformorusinganentirelynewfreedesign,whicheverthemanufacturerfeltwouldprovidethebettersolution.AtpresenttheCommissiondoesn’thavesufficientinformationtoevaluatethosetwoalternatives.3.Withrespecttotheexistinglocomotivefleet,theCommissionhasthreealternatives:·Continuetooverhaulonaregularschedule--Thiswouldrestoreeachlocomotivetotheconditionitwasinwhendelivered,i.e.to1964technologyanddesign.Somemodificationscouldbemade,butessentiallytheproductwouldbeawell-maintainedversionoftheexistingfleet.·Remanufacturesomeorall--Thiswouldinvolvediscardingeverycomponentexceptthosewhichhaveasatisfactorydesignandwhichcontinuetohaveanindefinitelylongusefullife.Withwhatremains(possiblytheframeandthewindlass),themanufacturerwouldbuildanewlocomotivemeetingtheCommission’sdesignspecifications,includingwarrantyandreliabilityspecifications.Theproductwouldbeindistinguishablefromanewlocomotive.Dependingonthenumberofreusablecomponents,however,thepricemaybesubstantiallylowerthanthatofanewlocomotive.Whetherthiswouldbeanattractiveoptiondependsuponthatpricedifferentialandtheconditionofthereusablecomponents.Anotherunresolvedissueiswhetherthewindlasssystemneedstobemodifiedtoincreaseitscapacityfromthecurrent35,000poundsofpullto50,000pounds.Ifsuchanenhancementisrequired,thecurrentwindlasswouldnotbereusable,andtheadvantagesofremanufacturewouldbecorrespondinglydiminished.·Retiresomeorall--Thisoptioninvolvesremovingtheexistinglocomotivesfromserviceandreplacingthemwithnewones.Partscouldbecannibalized,somesparelocomotivescouldbekeptforemergency,theremainingmaterialcouldbescrapped.4.Thesevariousoptionssuggestasimpletwo-by-threematrixo...
