+

ADMINISTRATIVE REPORT

   

TO:

Standing Committee on City Services and Budgets

FROM:

General Manager of Engineering Services

SUBJECT:

Tender No. 2001-04: Rubble Hauling and Crushing - 900 East Kent Avenue Works Yard

 

RECOMMENDATION

A. THAT Tender No. 2001-04 Rubble Hauling and Crushing - 900 East Kent Avenue Works Yard be awarded to Columbia Bitulithic Ltd. the low bidder meeting specifications, in the amount of $ 1,794,925.00 (including Provincial Sales Tax where applicable and 7% GST less anticipated receipt of Municipal rebate), with funding provided by internal user fees charged to existing Operating, Capital and Utility budgets for rubble material brought to the City's 900 East Kent Avenue site.
B. THAT a Construction Services Agreement with Columbia Bitulithic Ltd., for Contract No. 2001-04, Rubble Hauling and Crushing - 900 East Kent Avenue Works Yard be executed by the Director of Legal Services on the basis that no legal rights are hereby created and none shall arise until execution of an Agreement drawn to the satisfaction of the General Manager of Engineering Services and the Director of Legal Services.

COUNCIL POLICY
Construction contracts more than $300,000 are to be awarded by Council.

PURPOSE
The purpose of this report is to obtain Council approval to award Tender No. 2001-04 for the hauling of excavated material obtained from Engineering Services construction work to landfillsites, and for the crushing and transport of asphalt and concrete slab rubble.

BACKGROUND
Engineering Services has for the past several years been reviewing its methods of handling excavated material from its many construction sites throughout Vancouver. Annually, Engineering Services hauls more than 380,000 tonnes of excavated material to the Delta and Richmond landfills. The trucks used for loading excavated material are the smaller single-axle or tandem-axle dump trucks which are selected to meet the requirements at the specific work sites. However, for the longer haul to landfills outside Vancouver, it is more economical for larger transfer vehicles to do the hauling. Therefore, the review looked at using a common transfer site in Vancouver for the smaller trucks and the use of larger transfer vehicles by City forces or private contract forces to transport that material to the Delta Landfill.

The City conducted comparison trials in 1999 and 2000 using both City forces and contracted forces hauling to the Delta Landfill from a City owned transfer site at 900 East Kent Avenue. The trials demonstrated a cost advantage by using contracted forces to haul the material from the transfer site to the Delta Landfill. Based on this finding, Tender 2001-04 was issued for rubble hauling to the Delta Landfill over twelve months to confirm the contractor's rates over a full year's operation.

DISCUSSION
The intention is to establish a permanent Rubble Operation centre at 900 E Kent Avenue to manage the excavated materials from Engineering Services construction sites, subject to a detailed business case analysis and Council approval. The opportunities of the proposed Rubble Operation are as follows:.
· It can facilitate the source separation of excavated material to allow concrete and asphalt slabs to be crushed and reused instead of being disposed of at a landfill. This provides both environmental and economic benefits.
· The competitive contract for hauling from a central site encourages contractors to use the most economic sites for disposal of material or alternate uses of the material.
· It can manage the excavated material from the various Operations Branches of Engineering Services to determine the best means of disposing of, or reusing the material.
· The long distance hauling of excavated material can be carried out by larger, more efficient transfer vehicles which provide environmental benefits of reduced pollution and use of fuel resources.

· The long distance hauling from individual construction sites requires significant management of hired trucks and hauling is tied to normal work hours. A central site allows the material to be stockpiled with the opportunity to plan some transport outside of high traffic periods. It also simplifies the trucking needs of our construction operations. This reduces travel time providing economic benefit and also reduces congestion on City streets.

The rubble hauling contract, if approved, will be monitored and reviewed to confirm the operational benefits of this approach. A report will then be prepared establishing the business case for establishing a permanent Rubble Operation for the management of Engineering Services excavated material.

ANALYSIS
Tenders for rubble hauling and crushing at the 900 East Kent Avenue Works Yard (Tender No. 2001-04) were opened on April 26, 2000 and referred to the General Manager of Engineering Services.

The tender was advertised in the local newspaper as well as the internet. Nineteen tender packages were distributed and four tenders were submitted. Of these four, only two of the tenders met all specifications, including the bonding provisions.

All tenders were checked for completeness and accuracy and any miscalculations or omissions corrected. Tabulations of the amounts bid, for the two acceptable bids, with the lowest bid underlined, are shown below:

1. Columbia Bitulithic Ltd. $1,794,925.002. Delta Aggregates Ltd. $ 2,040,115.50

The tenders included:
· hauling general rubble to the Delta Landfill
· hauling a portion of the general rubble to other sites as determined by the contractor
· crushing asphalt and concrete slab rubble at the 900 E. Kent site, and loading and transporting to the Delta Landfill for use in road construction
· backhauling compost material from the Delta Landfill to the 900 E. Kent site

The first two items represent the majority (80%) of the contract cost. The third item involving the crushing of material requires specialized equipment that is brought in temporarily under contract, when sufficient material is available. The last item is relatively small and represents only 1% of the work involved. As in the initial trials, there is potential for City forces to undertake the first item of this contract. The following is an analysis of the possibility of City forces undertaking this work.
Comparison to City Forces Rates
As there is the potential for City forces to do the hauling of general rubble to the Delta Landfill covered by the first item above, it is appropriate to compare the rate bid by Columbia for this item to the rate we have from the previous trial by City forces. The City forces trial rate of $6.57/tonne should be adjusted by the following factors to make an equitable comparison to Columbia's bid:
· The City forces trial was completed in 2000 and labour cost increases of 2% and equipment including fuel increases of 2.6% should be added to that amount to compare it to Columbia's year 2001 bid.
· The City forces rate should be reduced by 1% to account for the contractor's ability to replace vehicles out for repair that was not available to the City forces during the trial.
· The City forces rate should be reduced by 15% to adjust for higher than normal loading costs. This adjustment compensates for the fact that the City had only four transfer vehicles available for the trial while the contractor would have access to a much larger fleet, thus making its loading more economic due to the scale of operation and more efficient use of the shovel loader.

The adjusted City forces rate is therefore reduced by 13.7 % from $6.57/tonne to $5.67/tonne to compare it to the Columbia Bitulithic rate of $5.15/tonne(including GST). Based on hauling 300,000 tonnes of the general rubble material over 12 months to the Delta Landfill, the City forces annual cost would be $1,701,000. The cost by Columbia Bitulithic would be $1,545,000. Therefore, there is a cost reduction of approximately $156,000 or 9.2% by using the contract forces.
The above comparison is based on Columbia Bithulithic hauling all 300,000 tonnes of the general rubble material to the Delta landfill. Their tender actually provides for the hauling of 50,000 tonnes of the material to other sites at a reduced rate of $2.37/tonne for a further saving of $139,000.

The above information is summarized as follows:

 

Rate

Quantity

Cost

City Forces

$5.67

300,000

$1,701,000

Columbia Bitulithic

$5.15

300,000

$1,545,000

Additional City forces cost

$156,000

Further reduction through use of other sites by Columbia

$139,000

Total saving through Contract

$295,000

FINANCIAL IMPLICATIONS
Previous rubble hauling trials by private contractors have varied from $2.95 to $4.38/ tonne from 1998 to 1999. The present bid low bid establishes a rate of $5.15/tonne for the hauling of general rubble to the Delta Landfill. This rate, although higher than previous contracts, is reasonable considering the following items;
· the increase in energy prices from 1998/99 to 2001
· the term of the contract is over twelve months instead of just the higher production summer months
· the previous contracts had the advantage of concrete and asphalt slabs being included in their hauling item, as that material can be disposed of more economically

The total estimated cost of this contract is $ 1,794,925.00 and will be funded from existing Operating, Capital and Utility budgets by internal user fees from a dumping charge applied to excavated material brought to the 900 E Kent site. Preliminary studies show that this cost, along with the costs of operating a dump site, will provide a saving over the costs now expended by each Operations Branch in hauling directly to landfills from work sites. The material will originate from Waterworks, Sewers and Streets capital and maintenance work. Therefore, the dumping fees are funded from a variety of sources such as the 2001 Streets and Sewers operating budget, 2001 Waterworks and Sewers Basic Capital, 2001 Water Utility Fees and 2001 Sewer Utility Fees. In addition, the Delta Landfill Operating budget will purchase the crushed material delivered there and used for road construction. The business case analysis at the end of the review of thisoperation will report out on the net savings to these budgets.

ENVIRONMENTAL IMPLICATIONS
The approval of this contract will allow Engineering Services to proceed further with the development of a central rubble operation with reduced pollution and fuel use benefits from the more efficient hauling of rubble material. Further environmental benefits arise from the ability to recycle some of the rubble material.

PERSONNEL IMPLICATIONS
At present, a smaller scale rubble hauling operation at 900 East Kent is being carried out by City forces from the Sewers Operations Branch, CUPE 1004. This involves five City staff. Currently the City does not own sufficient vehicles to undertake the full rubble hauling operation, and as noted above it is more economical for private contractors to perform this operation. As a result, this temporary operation will be discontinued once the contract is awarded and the contractor forces are mobilized. No regular staff will be displaced as they will return to other positions within Sewer Operations if necessary. The existing shovel operator is a posted backhoe operator (Equipment OperatorIV a) who is temporarily acting as a shovel operator (Equipment OperatorV). He will simply revert back to his posted position.

A consequence of discontinuing the operation involves the possible relocation of four truck operators. Two of the truck operators are in posted Truck Driver IV positions which Sewer Operations will attempt to retain by using these drivers to operate the transfer vehicles in other applications. If this is not productive, they will revert to Truck Driver III positions. The other two drivers are regular Truck Driver IIIs who are temporarily acting as Truck Drivers IVS and would return to their regular TD III positions if necessary. Should Sewer Operations not be able to maintain existing TDIV positions, no net staff reductions will occur as TDIII positions will be made available. This can be accomplished by reducing the corresponding number of hired trucks used.

CUPE 1004 has been provided with a copy of this report.

CONCLUSION

The low bid is acceptable when compared to previous rubble hauling contracts. The rate bid for hauling material is also less than the hauling rate experienced by City forces in its trial, even after adjustment of the City costs downward for an equitable comparison. The approval of this contract will allow Engineering Services to proceed with a central rubble hauling operation, and enable us to conduct a business case review for a permanent operation. Therefore, Contract 2001-04should be awarded to Columbia Bitulithic Ltd.

* * * *