Vancouver City Council |
ADMINISTRATIVE REPORT
Date: April 28, 2003
Author/Local: M.Deo/323-7792
RTS No. 3350
CC File No. 1805
Meeting Date: May 13, 2003
TO:
Vancouver City Council
FROM:
General Manager of Engineering Services
Manager - Materials ManagementSUBJECT:
Request for Quotation RFQ2048 - Purchase of Two Elgin Geo Vac Vacuum Street Sweepers
RECOMMENDATION
A. THAT Council authorize the General Manager of Engineering Services to exercise the City's lease option to purchase two (2) Elgin GeoVac Vacuum Street Sweepers from Vimar Equipment Ltd. at a total cost of $345,424.86 plus the Provincial Sales Tax, the Goods and Services Tax (less any municipal rebate received) and the Provincial Environmental Levy.
B. THAT the Director of Legal Services be authorized to execute and deliver on behalf of the City the notice of option exercise and any additional contract documents required to implement Recommendation A.
C. THAT all such legal documents be on terms and conditions satisfactory to the General Manager of Engineering Services and the Director of Legal Services.
D. THAT no legal rights or obligations will be created by Council's adoption of Recommendations A, B and C above unless and until such legal documents are executed and delivered by the Director of Legal Services.
E. THAT funding for the purchase described in Recommendation A be provided from the Truck and Equipment Plant Account.
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
Engineering Services currently has two mechanical sweepers, and five vacuum sweepers in City's street sweeping fleet. The City's last sweeper purchase was in July of 2000. At that time, two (2) vacuum sweepers were purchased through public tender for $224,988 each plus applicable taxes.
In the last two years, the City has seen increasing noise complaints regarding street sweepers in the downtown area. To address these complaints, an extensive sweeper fleet review was undertaken. The City investigated various makes, models and technologies of sweepers over a one year period. Based on the research conducted during the investigation, the Elgin GeoVac vacuum sweeper was brought in for a short five day demonstration. The Elgin GeoVac vacuum sweeper was operated in the downtown core with success. An operational decision was made to lease two (2) Elgin GeoVac Vacuum sweepers for a six (6) month period in order to verify the initial success of the short term demonstration. This long term demonstration was deemed necessary as the two (2) existing City owned mechanical sweepers were not meeting Sanitation Operations street sweeping needs, and the City's existing vacuum sweepers were creating noise issues in the downtown core. The demonstration allowed the City to determine suitability of the GeoVac sweepers for the City's street sweeping needs.
A Request for Quotation (RFQ) was issued in September 2002, requesting prices for six (6) month lease terms for two (2) Elgin Geo Vac Vacuum street sweepers, with a buyout provision at the end of the leasing term. The buyout was to be subject to sweeper performance, and at the City's discretion. The RFQ was sent to three Elgin Dealers and advertised on the Internet.
One bid was received from Vimar Equipment Ltd. with a lease cost of $45,000 per sweeper. This bid allowed for the purchase of the sweepers at the end of the leasing period. The buyout cost at the end of the lease term was $172,712.43 per unit.
DISCUSSION
The Elgin GeoVac sweepers were operated by City staff and were found to be suitable for Sanitation Operations street sweeping needs. The City has had a significant reduction in public noise complaints when operating with these machines. These two units will replace two sweepers included in the 2003 Truck and Equipment Replacement Program.
Vimar Equipment has agreed to apply 100% of the lease, less interest costs, to the purchase cost of the sweepers. The capital cost of the demo lease Elgin GeoVac vacuum sweeper was $203,000. At the time of the demo, only two used 2001 units were available. These units were leased to the City at a discounted rate. Given the favourable lease buy out pricing of $172,712.43 per sweeper, and the fact that the lease would have to continue if a tender purchase was required, it is recommended that the City proceed with a directed purchase of the GeoVac vacuum sweepers.
FINANCIAL IMPLICATIONS
The existing units are scheduled for replacement in the 2003 replacement year. Funds for the purchase of this units are provided from the Truck and Equipment Plant Account.
By buying out the leases, the City will save approximately $50,000 per unit by offsetting the purchase cost by the lease charges already spent on the two demo Elgin GeoVac sweepers units versus purchasing a new machine. A new unit would cost the City approximately $220,000 plus applicable taxes.
SUMMARY
Accordingly, we recommend the lease buy out of two (2) Elgin GeoVac vacuum sweepers from Vimar Equipment Ltd at a lease buy out cost of $345,424.86. ($172,712.43 per unit)
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