Committee continues Michelin tire‑leasing contract for one week after BLA raises accountability concerns

The Office of Contract Administration requested Board approval of a multi‑year tire lease and services contract with Michelin North America to serve SFMTA buses (initial five‑year term with an option to extend up to seven additional years; initial NTE $13.5 million, total potential NTE $18.9 million). OCA and SFMTA said competitive solicitation produced no responsive bidders and that Michelin, the incumbent, was selected under administrative code authority.

Budget and Legislative Analyst staff flagged that the proposed contract lacks documented performance metrics and recommended the department add a clearer performance‑management regime or return with stronger accountability language at extension time. Supervisors asked why the city leases rather than buys tires; SFMTA staff said leasing is standard for large transit agencies because it shifts installation, disposal and maintenance responsibility to the vendor and can reduce overall operational costs. SFMTA and Michelin representatives said Michelin tracks tire installation dates and mileage and inspects tires nightly; BLA noted the city currently has limited independent verification that the contractor meets staffing and performance expectations across yards.

Given the critical nature of the service and remaining questions, Chair Chan moved two actions: amend the resolution to make approval retroactive to April 1, 2023, and continue the item one week (to April 19) to allow BLA, SFMTA and OCA to negotiate reporting and tracking language. The committee approved both motions and continued the item. The committee record shows consent to retroactive authority and an agreed follow‑up time to present proposed performance reporting language.