ADMINISTRATIVE REPORT

Date: November 6, 2000
Author/Local: A.Kyriakides/7257

RTS No. 01739

CC File No. 1805

Council: November 21, 2000

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services Manager of Materials Management
SUBJECT:	Award of Tender No. PS00046 Reinforced Concrete Pipe and Manhole Covers

RECOMMENDATION

THAT Council accept the bid from Ocean Construction Supplies Limited for the supply and delivery of reinforced concrete pipe, manhole sections and tops, as, if, and when required, for a 36-month period from the date of award, at an annual estimated cost of $724,972 plus the 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax, where applicable, subject to a contract satisfactory to the Director of Legal Services.

COUNCIL POLICY

The policy of Council is to award contracts for the purchase of equipment, supplies and services that will give the highest value based on quality, service and price.

Contracts with a value over $300,000 are referred to Council.

DISCUSSION

Tenders for the above were opened by the City Clerk on June 28, 2000 and referred to the General Manager of Engineering Services and the Manager of Purchasing Services for report.

The 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax, where applicable, are in addition to all prices shown in this report and in the tabulation.

Funds for all purchases, in the estimated annual amount of $724,972 are provided for in the Sewers Capital Budget.

The tender calls for the supply and delivery of reinforced concrete pipe, manhole sections and tops, as if and when required. Duration of the Contract will be a 36-month period from date of award with option to extend for 2 additional 12-month periods. Prices will remain firm for one year from the date of award.

Price adjustments for years two and three are subject to acceptance by the City.

Two firms submitted bids for this tender: Ocean Construction Supplies Ltd. and Langley Concrete & Tile Ltd.

Ocean Construction Supplies Limited currently supplies the City with good quality pipe. They have a certified quality assurance program which has been verified by the City. We have had no problems with their pipe over the past several years.

The ability to have small quantities of pipe delivered daily to the three to five job sites is critical to the efficiency of the operation. Ocean Construction Supplies Ltd.'s plant is located in Vancouver at the south foot of Oak Street within two kilometers of our operations center at Manitoba Yards. Due to their location, cartage by Ocean is not required. City trucks can pick-up the necessary pipe in conjunction with their daily operations at a nominal cost. Furthermore, Ocean's plant location also gives us flexibility should unforeseen construction problems develop necessitating the need for additional materials.

Langley Concrete has the lower material price, however, cartage by this supplier would be required because of their plant being located in Langley.

Langley Concrete does not have a certified quality assurance program but plans to set one up, complete with certified technician, within the next two years. In the interim, there would be some additional costs with this supplier as the City's certified technician would have to carry out required testing and inspections.

In addition, under the terms of Langley's tender, no pipe storage facility would be provided within City boundaries. This would result in the company delivering large loads of pipe materials to our work sites increasing construction zone areas, which would negatively impact local residents and businesses, and increasing pipe handling costs for our crews. Furthermore, while mass delivery of pipe to large construction projects may be accommodated at a cost, it is not a viable option for smaller construction projects using concrete products or for emergency repair work. Therefore, to avoid separate trips to Langley by City vehicles, we would need to stockpile a range of concrete products at Manitoba Yards at additional cost. At present, we use Ocean Construction Supplies Ltd. as our stores and we do not need to inventory any of their products at our Yards.

Taking these various concerns into account, the total annual cost of the pipe from the two bidders is as follows:

Estimated Annual Cost	Ocean Construction.	Langley Concrete
Material	$ 724,972	$653,055
Cartage	$ 23,000*	$ 79,015**
Est. Inventory Holding Cost	Not required	$ 20,000
Est. Inspection Costs	Not required	$ 20,000***
Total Cost	$747,970	$772,070

* Estimated cost for City trucks to pick up materials.
** Cost of Langley delivering to Central Stores and/or the job site.
*** Year one only; years two and three $2,500/year

Council policy directs us to award to the supplier which will give the highest value to the City based on quality, service and price. Taking these factors into account, Ocean Construction Supplies Limited's bid represents a better value and the lowest overall cost to the City.

Accordingly, we recommend acceptance of the best value bid meeting specifications from Ocean Construction Supplies Limited.

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(c) 1998 City of Vancouver