Vancouver City Council

ADMINISTRATIVE REPORT

Date: July 3, 2003
Author/Local: M.Deo/323-7792
RTS No. 03510
CC File No. 1805
Meeting Date: July 22, 2003

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services Manager - Materials Management
SUBJECT:	Award of Tender PS03016 - Supply and Delivery of 5.0 Cubic Meter Wheel Loader

RECOMMENDATION

A. THAT, subject to the conditions set out in Recommendations B, C and D, Council authorize the General Manager of Engineering Services and Manager of Materials Management to award the 5.0 Cubic Meter Wheel Loader to the tenderer offering best value which meets specifications from Marcels Equipment in the amount of $443,735, 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 all legal 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, Manager of Materials Management and the Director of Legal Services.

D. THAT no legal rights or obligations will be created by Council's adoption of Recommendation 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.

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.

DISCUSSION

Tenders for the above were opened on May 28, 2003 and referred to the General Manager of Engineering Services and the Manager of Materials Management for report.

The PST, the 7% GST (less any municipal rebate received) and any Provincial Environmental Levy are in addition to the pricing shown in this report.

This tender called for prices for one (1) - 5.0 Cubic Meter Wheel Loader. This loader is required to replace an existing unit which is used in the Transfer and Landfill Operations Branch. This tender was advertised on the internet.

Fours bids were received with base unit prices ranging from $326,900 to $487,000.

· Bid 1 does not meet the minimum operating hours per tank of fuel specification and the 48 hour parts availability guarantee, and therefore is not acceptable.

· Bid 2 from Terratech Equipment, Bid 3 from Marcels Equipment and Bid 4 from Finning Canada Limited all meet the required operational specifications with the exception of a few minor items.

Table 1 shows the capital and fuel consumption costs for each of the wheel loaders over a seven year/ approximate 13,300 hour life. The options included are the dealer guaranteed buyback, automatic lube system, joystick steering controls, limited slip front and rear axles/differential lock, 5 year/10,000 hour extended warranty and a spare wheel/tire assembly.

Table 1: Capital and Fuel Consumption Costs

ITEM	Bid 2 Terratech Equipment	Bid 3 Marcels Equipment	Bid 4 Finning Canada
Base Price	$384,000	$399,500	$487,000
Automatic Lube System	$10,036	$8,435	$18,664
Joystick Steering	$8,538	Included in Price	Not available
Limited Slip Axles/ Differential Lock	$4,091	Included in Price	$30,000
Extended 5 Year/10000 Hour Full Machine Warranty	$34,702	$28,000	Included in Price
Spare Tire/Wheel	$5,595	$7,800	$9,502
Guaranteed Buyback 7 Year/13,300 Hour	($69,831)	($40,551)	($97,093)
*Estimated Life Cycle Fuel Consumption	$360,648	$293,750	$319,311
TOTAL	$737,779	$696,934	$767,384

*Based on average fuel consumption at high duty cycle (figures provided by manufacturer) for 1900 hour/ year of service, 7 year service life and $0.6/Litre for Diesel Fuel inflated at 10%/year.

In addition to the above, Bid 3 produces less full cycle green house gases than the other two bids and is the preferred machine based on cab comfort, and mechanic and operator experience with another City owned Volvo wheel loader. Bid 3 also included a boom suspension system at no additional cost. This option retails between $6,300 and $10,000. Table 2 shows the total estimated full cycle green house gases.

Table 2: Estimated Green House Gases

FINANCIAL IMPLICATIONS

The existing unit is scheduled for replacement in the 2002 program replacement year, and the estimated replacement budget is $641,000. Funds for the purchase of this unit are provided from the Truck and Equipment Plant Account.

SUMMARY

Accordingly, we recommend acceptance of best value meeting specifications from Marcels Equipment for one (1) - 2003 Volvo L220E-3 at a total cost of $443,735. ($399,500 including joystick steering and limited slip axles/differential lock plus $8,435 for an autolube system, $7,800 for tire/spare wheel and $28,000 for 5 year/10000 hour full extended warranty)

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© 2002 City of Vancouver