A1 ADMINISTRATIVE REPORT Date: November 18, 1996 File No. Crep067.wpd TO: Vancouver City Council FROM: General Manager of Engineering Services and Manager of Purchasing Services SUBJECT: CONTRACT EXTENSION - CONTRACT NO. 57-96-02 - SUPPLY AND DELIVERY OF 610MM STEEL WATER PIPE RECOMMENDATION THAT Council approve the extension of the contract to Itochu Canada Ltd. for the supply and delivery of 610mm steel water pipe, for an additional 12-month period, at an annual estimated cost of $301,000 plus the 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax. 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 February 20, 1996, Council awarded a 12-month contract to Itochu Canada Ltd. for the supply and delivery of 1,250 metres of 610mm steel water pipe, at an annual estimated cost of $301,738 plus the 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax. Steel water pipe is required for the construction of a dedicated fire protection system pipeline. The dedicated fire protection system pipeline will be used to distribute water from salt water pumping stations in the event of a major emergency such as an earthquake. Approximately 1,400 metres of pipe will be required for 1997 construction. - 2 - The contract provides for two 12-month extensions by mutual agreement between the City and the contractor. This is the first 12-month extension. A provision exists in the contract for price adjustments due to steel price fluctuations. Itochu has agreed to extend the contract with a price decrease of 4.2%. All other terms and conditions would remain the same. Considering that Itochu Canada Ltd. has been a satisfactory supplier, it is recommended that the contract be extended for an additional 12-month period. * * * * *