ADMINISTRATIVE REPORT

Date: November 22, 1999
Author/Local: Jim Lloyd
RTS No. 01147

CC File No. 1805

Council: December 14, 1999

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services and Manager of Purchasing Services
SUBJECT:	Award of Tender No. PS99061 - Supply and Delivery of Ductile Iron Water Pipe

RECOMMENDATION

THAT Council accept the low bid from Canada Pipe Company Ltd. for the supply and delivery of ductile iron water pipe as, if, and when required for a 36-month period from the date of the purchase order, at an estimated cost of $1,779,228 plus the 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax, subject to a contract satisfactory to the Director of Legal Services.

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

Tenders for the above were opened by the City Clerk on October 27, 1999 and referred to the General Manager of Engineering Services and the Manager of Purchasing Services for report.

The 7% Goods and Services Tax (less any municipal rebate received) and the Provincial Sales Tax are in addition to all prices shown in this report and in the tabulation.

Funds for all purchases are provided for in various Engineering Capital and Operating Budgets.

The tender calls for the supply and delivery of ductile iron water pipe as, if, and when required for a 36-month period from the date of the purchase order. An option exists to extend for an additional one or two 12-month periods subject to mutual agreement between the City and the contractor. A price adjustment clause exists due to the commodity nature of the product and foreign exchange rate as the only two corporate groups that manufacture this pipe are located in the United States. The tender is to be awarded in its entirety to a single contractor.

The tender is divided into two types of pipe. Tyton joint pipe which is used on a daily basis by City crews in various sizes and for which estimated quantities were available. 24" Tyton pipe is also listed, but without quantities, in the event that it may be required for major projects. Mechanical/Tyton restrained joint pipe is also listed in the tender in the event that it is required during the contract but without quantities. This type of pipe is not regularly used and only small quantities were required over the past few years.

Council should note that a joint initiative of the City’s Engineering and Purchasing staff “trialed” the direct delivery of pipe to the job site during the previous contract with smaller crane truck loads from the supplier. The City had traditionally shipped pipe in larger trailer loads directly into the yards for transfer at a later date to the job site by City trucks.

The direct delivery trial project was successful and was one of a number of initiatives that have reduced the average monthly inventory value of the City’s Central Stores by $435,000, allowed City Engineering vehicles to be better utilized, and freed up storage space in the yards for other requirements. Some deliveries still go to Central Stores for smaller jobs, emergency stock, or when job sites do not have appropriate storage space.

Two firms submitted bids for this tender.

Canada Pipe Company Ltd. submitted the low bid for Tyton joint pipe. U.S. Pipe & Foundry Company Inc. submitted lower prices with an alternate product for the restrained joint pipe. The alternate product is not acceptable due to a different joint design than specified in the tender which is incompatible with mechanical joint fittings. Also, U.S. Pipe has a minimum delivery quantity of four truck loads.

The restrained joint pipe bid from Canada Pipe meets specifications and is considered acceptable to the City’s Waterworks Engineer. In addition, Canada Pipe can ship in single truck load quantities, has shorter delivery time on Tyton pipe, and has provided excellent past service. Canada Pipe based their price adjustment on the U.S./Canadian dollar exchange rate.

Accordingly, we are recommending the acceptance of the low bid from Canada Pipe Company Ltd. for the supply and delivery of ductile iron water pipe as, if, and when required for a 36-month period from the date of the purchase order, at an estimated cost of $1,779,228.

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(c) 1998 City of Vancouver