ADMINISTRATIVE REPORT

Date: July 7, 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. 58-95-07 - Supply Of De-icing Salt

RECOMMENDATION

THAT Council approve the amendment of the contract to McTar Petroleum Co. Ltd., for the supply of de-icing salt, to allow a third 12-month period at an annual estimated cost of $227,655, plus the 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax, where applicable.

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

On October 17, 1995, Council awarded a 12-month contract to McTar Petroleum Co. Ltd., for the supply of de-icing salt, at an annual estimated cost of $232,155 plus the 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax, where applicable. This estimate is based on an average season. Previous quantities have varied from zero to 14,000 tonnes, so that the total cost could range as high as $708,261.

The contract provided for two 12-month extensions by mutual agreement between the City and the contractor. Council has previously approved these extensions. No formal provision is left in the contract for a third extension. However, the contract can be amended for a third 12-month extension period upon mutual agreement between the City and the contractor.

McTar was asked if they would accept an additional extension period and to review their pricing. This approach was taken instead of a new tender as several Purchasing staff members have been seconded or involved in the new financial system implementation and other corporate priorities. An extension will save staff time and administrative expenses from not preparing or evaluating a new tender and improve the handling of both regular operational and special project requirements during the present situation. Also, a new tender would be better issued in 1999 due to the pending Cambie Yards relocation to the new Kent Avenue facility.

McTar has agreed to extend for an additional 12-month period. In addition, McTar has offered a 2.2% reduction on de-icing salt prices. All other terms and conditions would remain unchanged.

Considering that McTar Petroleum Co. Ltd. has been a satisfactory supplier, it is recommended that the contract be amended and a third 12-month extension period be granted.

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(c) 1998 City of Vancouver