ADMINISTRATIVE REPORT

Date: February 12, 1998

Author/Local: Jim Lloyd/7257

CC File No. 1805

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services and Manager of Purchasing Services
SUBJECT:	Direct Purchase of 24" Ductile Iron Water Pipe

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RECOMMENDATION

THAT Council approve the direct purchase of 24" ductile iron water pipe from Canada Pipe Company Limited without the calling of formal tenders, at an estimated cost of $545,700, 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.

DISCUSSION

The Engineering Services Department has a major waterworks construction project planned for May 1998. This project is still in the final design stages but an estimated 6,000 feet of 24" ductile iron water pipe will be required.

On February 5, 1997, Tender No. 57-97-02 was awarded by the General Manager of Engineering Services and the Manager of Purchasing Services, to the low bid, Canada Pipe Company Ltd for the supply and delivery of 2,600 feet of 24" ductile iron water pipe, valued at $175,487. The 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax are in addition to all prices shown in this report.

Canada Pipe was approached and has agreed to honour their 1997 prices for the City’s current requirements. The increased quantity of pipe has offset material price increases and exchange rates by allowing a longer production run and sufficient lead time to be incorporated with other 24" pipe production.

Ductile iron pipe is produced to American Waterworks Association (AWWA) specifications which are used as a Canadian standard. Canada Pipe is corporately related to one of the two manufacturers that produce this pipe only in the United States. U.S. Pipe & Foundry, the other manufacturer, was 16.6% higher than Canada Pipe on the 1997 tender and has not been successful for several years on City tenders.

Formal tenders were not called due to the short lead time between pipe manufacturing and construction start. Also, City staff believe that a direct purchase is the best option for this product as the tender process would likely result in Canada Pipe being successful. Additional administrative expenses and delays would have been incurred to issue and evaluate a tender to generate this result.

This project is still in the design phase and pipe quantities may be adjusted. However, the estimated amount is not expected to change drastically as a result of the final design.

Funds for all purchases are provided for in the Waterworks Capital Budget.

Accordingly, we recommend the direct purchase of 24" ductile iron water pipe from Canada Pipe Company Limited without the calling of formal tenders, at an estimated cost of $545,700.

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(c) 1997 City of Vancouver