ADMINISTRATIVE REPORT

Date: June 9, 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:	Contract Extension - Contract No. 57-97-05 - Supply And Delivery Of Extra Strength Vitrified Clay Sewer Pipe And Fittings

RECOMMENDATION

THAT Council approve the extension of the contract to Gladding McBean, a division of Pacific Coast Building Products, for the supply and delivery of extra strength vitrified clay sewer pipe and fittings for an additional 12-month period, with the conversion of the contract to U.S. funds, at an annual estimated cost of $222,922 U.S., plus the 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax.

GENERAL MANAGER'S COMMENTS

The General Manager of Engineering Services RECOMMENDS approval of the foregoing.

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 June 3, 1997, Council awarded a 12-month contract to Gladding McBean, a division of Pacific Coast Building Products, for the supply and delivery of extra strength vitrified clay sewer pipe and fittings, at an annual estimated cost of $327,468 plus the 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax.

The contract provides for two 12-month extensions by mutual agreement between the City and the contractor. The contact allows for price adjustments and payment is to be made in Canadian funds.

The above contractor was approached for the first 12-month extension period. Gladding McBean, a California company, has agreed to extend the contract with an approximate one percent (1%) decrease in the overall contract value with individual price increases and decreases on the 63 items included. A further potential for savings is offered, which is dependent on exchange rates, if contract pricing is converted to U.S. funds.

The City’s Treasury Analyst advised that the average forecast range from several financial institutions is for the Canadian dollar to float between its present rate and a stronger position. Savings would occur on a stronger Canadian dollar although a small risk exists that the dollar will become weaker. Therefore, we are recommending the conversion of the existing contract into U.S. funds. All other terms and conditions would remain unchanged.

Retendering this item would probably not result in a new contractor. Gladding McBean is the nearest manufacturer to Vancouver. No Canadian manufacturers exist for vitrified clay sewer pipe and fittings.

Considering that Gladding McBean, has been a satisfactory supplier, it is recommended that the contract be extended for an additional 12-month period with a conversion of the existing contract to U.S. funds.

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(c) 1998 City of Vancouver