Renewal Option - Contract PS00004

ADMINISTRATIVE REPORT

Date: April 10, 2001
Author/Local:A Kyriakides/7257

RTS No. 02023

CC File No. 1805

Council: April 24, 2001

TO:

Vancouver City Council

FROM:

General Manager of Engineering Services and Manager of Materials Management

SUBJECT:

Renewal Option - Contract PS00004, Supply and Delivery of Mineral Aggregates

RECOMMENDATION

THAT Council approve the exercise of the renewal option and that the City enter into a new contract with Lafarge Construction Materials Ltd., and Mainland Sand & Gravel Ltd. for the supply and delivery of mineral aggregates for an additional 12 month period from May 1, 2001 to April 30, 2002, at an estimated annual cost of $2,953,602 including the GST (less any anticipated receipt of municipal rebate)and PST (where applicable).

1.

Lafarge Construction Materials Ltd.
for Items #1, #10, #11, #15, #17 and #21

$1,975,176

2.

Mainland Sand & Gravel Ltd.
for Items #4, #5, #7, #9, #13, and #14

$ 978,426

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 for award.

DISCUSSION

On March 28, 2000, Council awarded a 12-month contract to (1) Lafarge ConstructionMaterials Ltd. at an annual estimated cost of $1,783,615 and (2) Mainland Sand & Gravel Ltd at an annual estimated cost of $940,767, a total of $2,724,382, for the supply and delivery of mineral aggregates.

Funds for all purchases are provided by the revenues of the Asphalt and Aggregate Plant operations.

The contract provides for, four 12- month renewal options, by mutual consent between the City and the contractor, this being the first renewal. This renewal option also provides for a price adjustment, at the end of each 12-month period, subject to documented proof of manufacturers raw material cost changes or any other factors related to this product which can be verified with an independent published source.

The proposed pricing of $2,953,602 includes an increase of $229,220 with an overall weighted price increase of 8.4%. This increase breaks down, approximately, as follows:

Material Cost Increase

$ 85,300

3.1%

Transportation Cost Increase

$ 63,950

2.4%

Specification Change

$ 79,950

2.9%

$229,200

8.4%

The material and transportation increases are for all items. Supporting documentation has been received and substantiated.

Specifications changes are applicable to items #1 (Fine Aggregate/Sand) and #21 (Combined Crushed Aggregate/Asphalt Blend). Items #1 and #21 are used in the production of asphaltic mixes at the Kent Yard Asphalt Plant. These specification changes are justified as they will help reduce operation costs of production, valued at an equivalent or higher cost than that of the specification change costs.

All other terms and conditions remain the same as the original contract.

As both Lafarge Construction Materials Ltd., and Mainland Sand & Gravel have been satisfactory suppliers, it is recommended that the City exercise the renewal option and enter into a new contract with each supplier effective May 1, 2001 through to April 30, 2002.

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TO:	Vancouver City Council
FROM:	General Manager of Engineering Services and Manager of Materials Management
SUBJECT:	Renewal Option - Contract PS00004, Supply and Delivery of Mineral Aggregates

1.	*Lafarge Construction Materials Ltd.* *for Items #1, #10, #11, #15, #17 and #21*	*$1,975,176*
2.	*Mainland Sand & Gravel Ltd.* *for Items #4, #5, #7, #9, #13, and #14*	*$ 978,426*

Material Cost Increase	$ 85,300	3.1%
Transportation Cost Increase	$ 63,950	2.4%
Specification Change	$ 79,950	2.9%
	$229,200	8.4%