ADMINISTRATIVE REPORT

Date: May 22, 2001

Author/Local: N. Stajduhar

323-7796
RTS No. 02058

CC File No. 1805

Council: June 12, 2001

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services and Manager - Materials Management
SUBJECT:	Award of Tender No. PS01021 The Supply of Propane Gas and Storage Tanks

RECOMMENDATION

THAT Council accept the bid from ICG Propane, which offers the highest value based on quality, service and price, for the supply of propane gas in contractor-owned and City-owned storage tanks, and cylinder rentals, as and when required, for a 36-month period from date of purchase order, at an estimated total cost of $365,000, plus the Provincial Sales Tax, where applicable, and the 7% GST (less any municipal rebate received), subject to a contract satisfactory to the Director of Legal Services.

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.

BACKGROUND

Propane is used as automotive fuel for numerous City automobiles, trucks, and equipment, and in portable cylinders for various types of on-site utility equipment. The City operates propane fuelling stations at the Manitoba and Cambie Works Yards. The City owns a 3,500
gallon storage tank and dispensing equipment at the Cambie Works Yard, as well as dispensing equipment at the Manitoba Works Yard. The contractor is to supply one storagetank at the Manitoba Works Yard. The City owned dispensing equipment will be reused at both the Manitoba and Cambie Works Yard if possible. The contractor will be responsible for any upgrading or replacement that may be required to the dispensing equipment.

DISCUSSION

Tenders for the above were opened by the City Clerk on April 11, 2001 and referred to the Managers of Equipment Services and Materials Management for evaluation and report. The tender was advertised in the local newspaper as well as the internet. The Provincial Sales Tax, where applicable, and the 7% Goods & Services Tax (less any municipal rebate) are in addition to the price shown in this report.

The City requested prices for two items:

Item 1 - the supply of propane gas if storage tanks are

a) owned by the contractor
b) owned by the City

Item 2 - cylinder rentals.

Optional prices were also requested to purchase storage tanks supplied by the contractor.

Four firms submitted tenders. ICG Propane submitted the low bid for all items.

Equipment Services evaluated the option of purchasing versus renting storage tanks, and recommends to continue renting the storage tank at the Manitoba Works Yard because it is less expensive when the costs of capital and maintenance are considered. Engineering Services will continue monitoring the propane usage and the appropriate storage tank sizes over the next 3 years to determine the City's requirement and financial implication of contractor-owned and City-owned storage tanks.

We are, therefore, recommending acceptance of the low bid which represents the highest value based on quality, service and price from ICG Propane, for the supply of propane gas in contractor-owned and City-owned storage tanks, and the rental of cylinders.

FINANCIAL IMPLICATION

Accepting the bid with ICG Propane requires $365,000 (plus taxes) of funding. As with gasoline and diesel purchases, propane is charged directly to individual construction projects and annual equipment capital and operating funds. Current user branches' capital and operating budgets have sufficient funds to cover the expense.

* * * * *

(c) 1998 City of Vancouver