ADMINISTRATIVE REPORT

Date: April 8, 2002
Author/Local: P. Kemp/7257

RTS No. 02592

CC File No. 1805

Council: April 23, 2002

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 options and that the City enter into new contracts 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, 2002 to April 30, 2003, at an estimated annual cost of $3,238,295 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	$2,222,019
2.	Mainland Sand & Gravel Ltd. for Items #4, #5, #7, #9, #13, and #14	$1,016,276

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 Construction Materials 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 anddelivery of mineral aggregates.

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

The contracts provide for, four 12- month renewal options, by mutual consent between the City and the contractor. The renewal options also provide 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 first 12 month extensions were approved by City Council on April 24, 2001 at an estimated cost of $2,953,602. This is the second 12 month renewal. All other terms and conditions remain the same as the original contract, with the exception of the change in estimated quantities. Both Lafarge Construction Materials Ltd. and Mainland Sand and Gravel are prepared to extend for an additional 12 month period with no price increase. A change to the estimated quantities and a slight increase due to additional provincial sales tax results in a higher estimated cost for supply of the material compared to the contract extension approved in 2001.

It is estimated that the 2002 contract extensions will result in costs of $2,222,019 for material supplied by Lafarge Construction Materials Ltd. and $1,016,276 for material supplied by Mainland Sand & Gravel. The total value of the mineral aggregate to be supplied is estimated to be $3,238,295.

CONCLUSION

As both Lafarge Construction Materials Ltd., and Mainland Sand & Gravel have been satisfactory suppliers, it is recommended that the City exercise the renewal options and enter into new contracts with each supplier effective May 1, 2002 through to April 30, 2003.

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(c) 1998 City of Vancouver