ADMINISTRATIVE REPORT

Date: April 9, 2001
Author/Local: Susanne Siu/7258

RTS No. 02017

CC File No. 1805

Council: April 24, 2001

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services Manager of Materials Management
SUBJECT:	Award of Tender No. PS01024 Supply of Asphalts - Liquid and Paving (Grade 80-100 and MC250)

RECOMMENDATION

THAT Council accept the low bid meeting specifications from the following firms, for the supply of liquid and paving asphalts as, and when required, for a 3-year period from May 1, 2001:

- Husky Oil Marketing Co. for item 1 - Grade 80-100, group A at an estimated annual cost of $811,000; and

- Imperial Oil for item 2 - MC250 at an estimated annual cost of $151,000;

including the Provincial Sales Tax, where applicable, and the 7% Goods and Services Tax (less the anticipated receipt of the municipal rebate), subject to contracts 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 on April 3, 2001 and referred to the General Managerof Engineering Services and the Manager of Materials Management for report. The Provincial Sales Tax, where applicable, and the 7% Goods and Services Tax (less any anticipated receipt of the municipal rebate) are included in the prices shown in this report.

The tender was advertised in the local newspaper as well as the internet.

The tender requested pricing for the supply of two items of asphalts, grade 80-100, group A and MC250, based on rack (market) or crude based pricing and alternative firm pricing. The rack and crude based pricing would fluctuate throughout the contract period while the discount and freight charges would remain the same. Firm pricing would be fixed for a 12-month period.

Upon mutual agreement between the City and the contractor, the City has the right to change the pricing arrangement on the contract anniversary date, i.e. rack or crude based pricing to firm pricing.

Funds are provided by the revenues of the Asphalt Plant operations.

Two firms submitted tenders. Both offered the rack (market) based pricing and the alternative firm pricing as summarized below. No bids were received based on crude.

Firm	Rack (Market) Based Pricing Estimated 12-month Total (including GST & PST as applicable)
	Item 1 80-100, group A	Item 2 MC250
Husky Oil Marketing Co.	$ 810,682.50	$ 165,056.14
Imperial Oil	$ 866,529.00	$ 150,969.43

Firm	Alternative Firm Pricing Estimated 12-month Total (including GST & PST as applicable)
	Item 1 80-100, group A	Item 2 MC250
Husky Oil Marketing Co.	$ 1,002,082.50	$ 168,425.16
Imperial Oil	$ 1,081,029.00	$ 182,362.57

Although there is a risk that rack prices may rise and our contract will be affected, since the firm pricing is approximately 24% higher for item 1 and 12% higher for item 2, we are recommending acceptance of a rack based pricing arrangement, specifically the low bids meeting specifications - Item 1 to Husky Oil Marketing Co. and Item 2 to Imperial Oil.

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(c) 1998 City of Vancouver