ADMINISTRATIVE REPORT

Date: July 7, 1998
Author/Local: Jim Lloyd/7257
CC File No. 5809

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services and Manager of Purchasing Services
SUBJECT:	Direct Purchase of Traffic Signal and Street Lighting Poles

RECOMMENDATION

THAT Council approve the direct purchase from Nova Pole International for the supply and delivery of traffic signal and street lighting poles, as, if, and when required, for a 12-month period from the date of the purchase order, at an annual estimated cost of $348,233 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 June 3, 1997, Council awarded a 12-month contract to West Coast Engineering and Nova Pole International Inc. for various individual items of traffic signal and street lighting poles for a 12-month period.

The contract provides for two 12-month extensions subject to mutual agreement between the City and the contractor and for price adjustments.

The City approached both contractors for an extension to the contract. However, one contractor asked for an unacceptable price increase which was declined.

Both firms were advised that the City was proceeding with a direct purchase instead of issuing a new tender. Prices were requested from West Coast and Nova for traffic signal and street lighting poles (the rejected items) for the next 12-month period.

Nova submitted the lowest overall prices for the above mentioned requirement with an average price increase of 1.1% over their 1997 tender prices . Nova has also agreed to make minor modifications to their poles for operations staff and to formalize existing quality control processes. Estimated quantities have decreased since the 1997 tender.

The direct purchase approach was taken as several Purchasing staff members have been seconded or involved in the new financial system implementation and other corporate priorities. A direct purchase saves staff time and administrative expenses from not preparing or evaluating a new tender and improves the handling of both regular operational and special project requirements during the present situation.

In addition, West Coast and Nova are the only local pole manufacturers. A new advertised tender would be unlikely to generate competitive bids due to the difficult and expensive nature of transporting poles over a long distance.

Accordingly, we are recommending the direct purchase from Nova Pole International Inc. for the supply and delivery of traffic signal and street lighting poles, as, if, and when required, for a 12-month period from the date of the purchase order, at an annual estimated cost of $348,233 plus the 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax.

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(c) 1998 City of Vancouver