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                             ADMINISTRATIVE REPORT

                                            Date: April 30, 1996
                                            Dept. File No.1.40.96.05

    TO:       Vancouver City Council

    FROM:     General Manager Engineering Services

    SUBJECT:  Award of Contract No. 9602 for the Installation of
              Steel Pipelines and Related Work - False Creek Area
              (Dedicated Fire Protection System, First Phase)


    RECOMMENDATION

         A.   THAT Contract No. 9602 for the Installation of Steel
              Pipelines and Related Work - False Creek Area be awarded to
              the low bidder meeting the contract requirements, B. Cusano
              Contracting Inc., for the net total tender price of
              $3,048,800, using the funding sources identified. (The
              applicable G.S.T. rebate has been subtracted from the total
              tendered price.)

         B.   THAT the bid bonds from the unsuccessful tenderer be
              returned.

         C.   THAT the Director of Legal Services be authorized to enter
              into a construction services contract with B. Cusano
              Contracting Inc.  for Contract No. 9602, for the Installation
              of Steel Pipelines and Related Work for the DFPS, False Creek
              Area, in consultation with the General Manager of Engineering
              Services.

    COUNCIL POLICY

    Construction contracts over $300,000 are to be awarded by City Council.


    PURPOSE

    This report recommends that the contract to construct the first phase
    of Dedicated Fire Protection System -- Steel Pipeline System be awarded
    to B. Cusano Contracting Inc., the low bidder meeting qualifications. 

    BACKGROUND

    In April 1992, City Council approved in principle the concept and
    funding of a Dedicated Fire Protection System (DFPS). The system is
    designed to provide large volumes of high pressure fire fighting water.
    During normal operations the system will supplement the City s water
    system. In the event of an emergency, when the City s water system is
    disrupted, the DFPS will utilize salt water, pumped directly from the
    ocean. When the DFPS project is completed, coverage will include the
    Downtown, West End, Kitsilano, Downtown east side and Fairview Slopes.

    The Dedicated System project includes the construction of 3 pump
    stations, a dedicated system of watermains and a new radio transmitter
    station on Grouse Mountain. All facilities are being designed to remain
    operational following the maximum credible seismic event for the Lower
    Mainland.  

    To date, intake structures at Coal Harbour and False Creek, the False
    Creek Pump Station and the new radio transmitter station have been
    completed.  The Coal Harbour Pump Station will be completed in June,
    1996.

    The pump stations have been constructed with specialized Fire
    Department connections, capable of drawing the pump station's full
    capacity.  One Fire Department hose tender truck, designed to
    complement the DFPS, is presently in service at Fire Hall #8.  A second
    hose tender truck will be purchased this year from funds budgeted in
    the 1996 Capital Budget.  The tender trucks each carry one mile of
    large volume, high pressure hose and specialized fittings to create
    above-ground mains. Therefore, only a skeletal grid of underground
    dedicated mains are required because of increased system coverage from
    the Fire Department equipment.  The pump stations can also be utilized
    immediately, while the dedicated mains are being constructed. 

    DISCUSSION

    The installation of the steel pipelines and related work represents the
    fifth major construction  phase of the City s Dedicated Fire Protection
    System  project, which was approved in principle subject to funding, by
    Council on April 16, 1992.

    The  pipelines  and related works  contract will be  administered as  a
    series of lump sums. The construction services contract includes quoted
    unit  prices  for  specific  additions and  deletions.  The  successful
    contractor  has submitted a detailed  breakdown of the  lump sum prices
    tendered,  which will be used  for the computation  of interim progress
    payments. The  final cost  of  the contract  may vary  as  a result  of
    variances from the estimated  quantities of work and/or changes  to the
    scope  of  work;  however  it is  anticipated  that  the  work will  be
    completed within budget.

    Two  complete  tenders  were  submitted.   All  tenders  contained  the
    appropriate bonding. A summary of the bids, as announced at  the tender
    opening, is as follows:

    Contractor                              Tender Price

    B. Cusano Contracting Inc.              $3,167,200.00
    Lockerbie & Hole Contracting Inc.       $3,756,405.00

    In  accordance  with  City policy,  which  is  detailed  in our  tender
    documents, the  submitted tenders are checked  for arithmetic accuracy.
    The true tender value is  the correct extension of unit prices  against
    the estimated quantities and then the correct addition of all  unit sum
    and lump sum  costs.  Both  tenderer's submissions were  arithmetically
    correct.

    The tender submitted  by the  low bidder, B.  Cusano Contracting  Inc.,
    meets all  the contract requirements, including  insurance and bonding,
    and  construction  completion date.  B.  Cusano  Contracting Inc.  have
    demonstrated  experience with  similar types  of construction  work and
    have completed  similar  work  in  a satisfactory  and  timely  manner,
    according to references.

    BUDGET & SUMMARY

    The breakdown of  the recommended  low bid from  B. Cusano  Contracting
    Inc. can be summarized as follows:

         Construction Contract:        $3,167,200.00
         Less G.S.T. Rebate            $  118,400.00
         Net Total Contract Value      $3,048,800.00

    The engineer s cost  estimate, for the installation  of steel pipelines
    and  related  work  contained  in contract  9602,  excluding  materials
    pre-purchased by the City of Vancouver, was $2,910,873.37 including net
    GST.    Even  though the  low  bid  submitted  exceeded the  engineer s
    estimate by  4.7%, the low  tender was  close to the  estimate and  the
    engineering  team  believe it   represents  fair  market value  for the
    tendered scope of work.

    While  the construction cost for this phase of pipeline construction is
    validated  by the  engineer's estimate, it  is above the  unit cost per
    metre  for pipeline  set by  the project  conceptual design  report and
    budget.  The project  team recommend completing the critical  pipe work
    that  connects the Coal  Harbour and False  Creek pump  stations at the
    present design and  construction standard.   This section  of the  DFPS
    pipe system connects the  three primary pump stations and  contains the
    key remote SCADA  monitored and  controlled valve stations.   The  post
    seismic performance of this key section of pipeline will be critical to
    the successful performance of the overall dedicated system.

    Deep  trenches  for   consistent  seismic  foundation,   heavy  utility
    congestion  in the  Downtown area, and  high construction  standards to
    ensure  post seismic reliability all contribute to the overall cost for
    this pipe work.

    The  project engineering team will investigate a variety of options for
    the future downtown pipe loops that include reducing the scope of work,
    lessening  the  post  seismic  resistance, or  increasing  the  overall
    project budget and/or implementation schedule.

    Funds are  available to be  allocated from the  approved 1995  and 1996
    Waterworks  Capital  Budget  for  the award  of  construction  services
    contract  9602 to  the low  bid construction  tender, meeting  contract
    requirements,  submitted  by  B.   Cusano  Contracting  Inc.,  for  the
    Dedicated Fire  Protection System, Installation of  Steel Pipelines and
    Related Work - False Creek Area.


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