Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

General Manager of Engineering Services and Manager of Purchasing Services

SUBJECT:

Direct Purchase - Supply and Delivery of Cover Material (Landfill)

 

RECOMMENDATION

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. Formal bid documents are normally issued for potential contracts exceeding $100,000.

Contracts with a value over $300,000 are referred to Council.

BACKGROUND

The City has traditionally had a contract for the supply and delivery of cover material at the Vancouver Landfill. Cover material is dredged or reclaimed sand and soil material used for road-building or to cover refuse. The dredging and reclamation process is done by a contractor within the Landfill property. The contractor then transports materials to various sites within the Landfill. The contract for cover material also provides for the rental of the contractor's on site equipment, with and without operator, to supplement City forces at the Landfill during peak periods or special projects.

On June 11, 1996, Council awarded Poschner Construction (88) Ltd, the low bid of two tenderers, a 12-month contract for the supply and delivery of cover material at the Vancouver Landfill, at an annual estimated cost of $717,900, plus the 7% Goods and Services Tax (less any municipal rebate received). The contract with Poschner allowed the City to exercise two 12-month renewal options. The renewal option provides for a price adjustment linked to the Consumer Price Index. Council approved the renewal options in 1997 and 1998 with respective increases of 0.5% and 0.18%. No more formal renewal options exist in this contract.

DISCUSSION

The Landfill is currently experimenting with alternate recycled material, from other sources, to substitute for the sand acquired under the cover material contract. Handling and unit processing costs for this experiment will be determined over the next few months to determine the effectiveness of the recycled material and the impact on future cover material contracts. The above experiment may result in a decrease in the value of a cover material contract.

To prepare a new tender would not be appropriate under these circumstances until more information is obtained. Extensive capital equipment requirements are required for this type of work which would not be economically attractive to other firms or the City for a short term duration. Depending on the results of the experiment, the City will either tender the cover material requirements in its traditional format or modify the requirements for the use of the alternate material.

The present contractor, Poschner Construction (88) Ltd, is aware of the circumstances and agreed to a new contract on a month to month basis not to exceed a 12-month period. The price adjustment based on the original contract formula results in a price increase of 0.55% for both material and the majority of rental equipment. Rates for two pieces of equipment that are rented to the City, on an as needed basis, are currently below their market value and will be adjusted by 6%. All other terms and conditions remain the same as the initial contract.

Considering that Poschner Construction (88) Ltd., has been a satisfactory supplier, it is recommended that the City enter into a new contract, without the calling of formal tenders, on a month to month basis up to a maximum 12-month period for the supply and delivery of cover material at the Vancouver Landfill.

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ag990914.htm

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