Report to: General Committee                                 Date Report Authored: August 9, 2010

 

 

SUBJECT:                         Contract Extension 128-T-03 Hired Loaders on an “as and when” Required Basis

 

PREPARED BY:              Morgan Jones Ext. 2285

                                            Alex Moore Ext. 4711

 

 

RECOMMENDATION:

1)      That the staff report entitled Contract Extension 128-T-03 Hired Loaders on an “as and when” Required Basis be received;

 

2)      And that the tender process be waived in accordance with Purchasing Bylaw 2004-341, Part 11, Section 7(1) c which states “when the extension of an existing contract would prove more cost-effective or beneficial;

 

3)      And that Contract 128-T-03 Hired Loaders on an “as and when” Required Basis be extended  for one (1) winter season (2010/11) and an option to extend for one additional winter season (2011/12) at the itemized prices identified in the options/discussion section of this report;

 

4)      And that the total annual award cost of $526,290 inclusive of HST be funded from the annual operating budget account 700 504 5407 – Construction Equipment & Services, subject to Council approval of the 2011 operating budget;

 

5)      And that the contract extension for tender 128-T-03, in the estimated annual amount of $526,290 inclusive of HST, be awarded as summarized in Attachment “A”;

 

6)      And that Staff be authorized and directed to do all things necessary to give effect to this resolution.

 

1. Purpose   2. Background   3. Discussion   4. Financial  

 

5. Others (HR, Strategic, Affected Units)   6. Attachment(s)

 

PURPOSE:

The purpose of this report is to obtain Council approval for the extension of the existing winter maintenance contract, Tender 128-T-03 Hired Loaders on an “as and when” Required Basis for the 2010-2011 and 2011-2012 winter seasons.

 

BACKGROUND:

The previous contract extension for the rental of Loaders on an “as and when” Required Basis for winter maintenance expired April, 2010.

 

 

 

The current contract includes 28 loaders that are used for winter maintenance to assist in the removal of snow in cul-de-sacs, wide corners and rear lanes. This contract is one of four major contracts to obtain the services of winter maintenance equipment throughout the Town of Markham.  The other three contracts are:  Rental of Tandem Axle Trucks, Sidewalk Winter Maintenance and Rental of Graders.

 

OPTIONS/ DISCUSSION:

In 2003, the Town received bids from only six (6) contractors that were awarded contracts at the hourly rates provided in their respective tender submissions.  Tender 128-T-03 called for a three (3) year contract term with the option to renew for two (2) additional years at the 2003 tendered rates.  In 2008, Staff determined it was in the best interests of the Town to renegotiate a two year extension with a 17% increase for the 1st year over the 2003 prices and a further 3% for the 2nd extension year, in light of price increases recognized on the sidewalk/tandem plows (70-80% higher than previous contract), as well as the limited number of contractors bidding on the hired loader contract in 2003.  This option to extend the existing contract aligns with Part 11 Section 7(1) c of Purchasing Bylaw 2004-341 which states “the Town may negotiate a contract for the supply of goods and services without a competitive process when the extension of an existing contract would prove more cost-effective or beneficial.”

 

This extension represents another two (2) winter seasons at the 2008/09 pricing for the 2010/2011 and 2011/2012 contract years.  The only revision to this contract extension is the award to G. Dunlop Construction for the supply of a larger loader at a negotiated increase represented in Attachment “B”.  This larger loader will allow for greater efficiency in meeting service level demands for managing winter maintenance activities.

 

Hourly Rates – Exclusive of HST

 

Articulated 4 Wheel Drive Rubber Tie Loader

 

Contractor                                                    2008/09                       2010/11/12

John Larkin Ltd. (10 Units).                           $129.78/hour               $129.78/hour

Markham Property Services (2 Units) $103.00/hour               $103.00/hour

Griffith Property Services (4 Units)               $110.00/hour               $110.00/hour

G.Dunlop Construction (1 unit)                      $ 74.55/hour*              $110.00/hour

 

*G.Dunlop rate was for a 4 wheel drive backhoe, this loader was replaced for 2010-2011 with an Articulated 4 wheel drive loader.

 

Loader Backhoe (4 Wheel Drive)

 

Contractor                                                    2008/09                       2010/11/12

G.Dunlop Construction (1 unit)                      $  74.55/hour               $  74.55/hour

Markham Property Services (2 Units) $  74.00/hour               $  74.00/hour

Jag Construction (1 Unit)                               $  73.00/hour               $  73.00/hour

Griffith Property Services (3 Units)               $  75.75/hour               $  75.75/hour

Wilson Contracting (1 Unit)                           $  69.00/hour               $  69.00/hour

 

175 Michigan or equivalent, minimum 125 HP, with 3 cu yd Bucket Capacity

 

Contractor                                                    2008/09                       2010/11/12

Griffith Property Services (1 Unit)                 $132.00/hour               $132.00/hour

Wilson Contracting     (2 Units)                      $110.00/hour               $110.00/hour

 

Standby Rate (121 days)-Exclusive of HST

            2008/09                       2010/11/12

G.Dunlop Construction (2 units)                    $85.71/day                  $85.71/day

Markham Property Services(4 units)               $85.71/day                  $85.71/day

Jag Construction (1 Unit)                               $85.71/day                  $85.71/day

Griffith Property Services (8 units)                $85.71/day                  $85.71/day

Wilson Contracting     (3 Units)                      $85.71/day                  $85.71/day

Larkin Construction    (10 units)                     $90.00/day                  $90.00/day

 

FINANCIAL CONSIDERATIONS AND TEMPLATE:

Equipment

# of Units

2010-2011

Estimated Cost

2010

Operating Budget

Difference

Loaders-Operating

28

$225,511

    $219,342

 

Loaders-Standby

28

$300,779

    $295,576

 

Total Loaders

28

$526,290

  $514,918

              $11,372*

 

*$9,102 is the HST Impact and $2,270 is related to the price increase for G. Dunlop

2010 Operating Budget Impact:

Equipment

2010 Available Budget as of July YTD

 

 

Less: 2010 Estimated Costs (Nov – Dec. 2010)

 

2010 Year end Favourable Variance

Loaders  700 504 5407

$248,339

$167,263

$81,076

 

Remaining balance to offset any winter operations over expenditures.

 

In October 2008, Council approved the extension of contract 128-T-03 for one (1) winter season (2008/09) at the negotiated rates (17% increase) with an option to extend for a further one (1) additional winter season (2009/10) with a 3% rate increase.  Since this contract extension, diesel fuel prices have increased by 11% and the consumer price index (Inclusive of labour) has increased by 3.08%.   

 

Staff were successful during the extension year 2009/10 to negotiate a 0% rate in lieu of 3% as approved and have further been successfully in negotiating the same 2008/09 rates for a further two (2) winter seasons (2010/11& 2011/12).  As stated within this report, the Town has seen a considerable increase in other winter maintenance contracts (sidewalk and plow) when the tender was released to the marketplace (70-80% higher than previous 2003-2008 contract).  

 

ATTACHMENTS:

 

Attachment “A” – Summary of Contractor tender award

 

Attachment “B” – G. Dunlop Construction equipment upgrade

 

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