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                             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.



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