Report to: General Committee                                               Report Date: September 29, 2008

 

 

 

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

PREPARED BY:               Bob Walter Ext. 4857

                                            Alex Moore Ext. 4711

 

 

RECOMMENDATION:

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

 

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;

 

AND THAT Contract 128-T-03 Hired Loaders on an “as and when” Required Basis be extended  for an additional two (2) winter season (2008-2010);

 

AND THAT Contract 128-T-03 Hired Loaders on an “as and when” Required Basis be extended for the 2008/09 period with the itemized prices identified on page 2&3;

 

AND THAT the Manager of Purchasing and Director of Operations be authorized to negotiate the extension of  the contract for the 2009/10 winter season providing the prices for this winter season does not exceed a 3% price increase over 2008/09 period;

 

AND THAT the total annual award cost of $514,918.40 be funded from the Operating Account 700 504 5407 Construction Equipment & Services subject to Council approval of the 2009 operating budget;

 

AND THAT the 2008 anticipated operating shortfall of $495,344 be included in the 2008 Town wide year end operating balance;

 

AND THAT the estimated annual amount of $514,918.40, exclusive of GST be awarded as summarized below:

 

·        John Larkin  (10 units) in the amount of  $197,800.00 (2008-2009 winter season)

·        Dunlop Construction  (2 Units) in the amount of $32,942.40 (2008-2009 winter season)

·        Markham Property Services (4 Units) in the amount of $69,456.00 (2008-2009 winter season)

·        Jag Construction  (1 Unit) in the amount of $16,372.00 (2008-2009 winter season)

·        Griffith Property Services (8 Units) in the amount of $144,752.00

·        Wilson Contracting (3 Units) in the amount of $53,596.00

 

That Staff be authorized and directed to do all things necessary to give effect to this resolution.

 

EXECUTIVE SUMMARY:

N/A

 

 

 

PURPOSE:

The purpose of this report is to obtain Council approval for the extension of our existing winter maintenance contract, Tender 128-T-03 Hired Loaders on an “as and when” Required Basis for the 2008-2009 and 2009-2010 winter seasons.

 

BACKGROUND:

The previous five year contract for the rental of Loaders on an “as and when” Required Basis for winter maintenance expired April, 2008.

                                                       

OPTIONS/ DISCUSSION:

Currently 14 loaders are used for winter maintenance. The increase from 14 loaders to the 28 requested in this tender was a direct result from the Council Winter Maintenance Workshops where council direction was to see a significant increase in response time to remove snow from rear lanes and cul de sacs.

 

The increase would also allow Operations to expedite the removal of snow from Regional bridge decks as well as sidewalks located on Region roads.  This was also a direction given to Operations for marked improvement.  Council received numerous calls as well as observed residents walking on Regional roads which were not passable due to the large amount of snow plowed to the curb.

 

The tender is one of four major tenders released to obtain the services of winter maintenance equipment throughout the Town of Markham.  The other three tenders are:  Rental of Tandem Axle Trucks, Sidewalk Winter Maintenance and Rental of Graders.

 

With the recent price increases received on the sidewalk/tandem plows (70-80% higher than previous contract), Staff determined that it was in the Town’s best interest to negotiate with the current contractors for a two (2) year extension rather than going to the market. Additionally, the availability of loaders is limited within the field, in 2003 the Town only received bids from five (5) contractors and all were awarded contracts as per hourly rates provided on tender closing.

 

Hourly Rates (estimated @ 64 hours per unit)

 

Articulated 4 Wheel Drive Rubber Tie Loader

 

Contractor                                         2003-2008                   2008/09           % increase

John Larkin Ltd. (10 Units).                  $109.14/hour               $126.25/hour               15%

Markham Property Services (2 Units)$  80.25/hour                  $103.00/hour               28%

Griffith Property Services (4 Units)        $102.72/hour               $110.00/hour               7%

 

 

 

 

 

Loader Backhoe (4 Wheel Drive)

 

Contractor                                         2003-2008                   2008/09           % increase

Dunlop Construction (2 Units)   $   56.71/hour              $  74.55/hour               31%

Markham Property Services (2 Units)$   64.20/hour                 $  74.00/hour               15%

Jag Construction (1 Unit)                      $   67.41/hour              $  73.00/hour                 8%

Griffith Property Services (3 Units)        $   69.55/hour              $  75.75/hour                 9%

Wilson Contracting (1 Unit)                  $   64.20/hour              $  69.00/hour                 7%

 

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

 

Contractor                                         2003-2008                   2008/09           % increase

Griffith Property Services (1 Unit)         $123.05/hour               $132.00/hour                 7%

Wilson Contracting       (2 Units)           $100.00/hour               $110.00/hour               10% 

 

Standby Rate (130 days)

2003-2008                          2008/09           % increase

All Contractors                                     $75/day                        $90/day                        20%

 

Due to the increase in labour of 12.48 % (Based on CPI index) and the diesel fuel of 202.66% (Based on Fuel Index) from the period extending through 2003 to 2008 and market conditions, Staff believe the negotiated rates noted above are competitive in the market place.

 

FINANCIAL TEMPLATE:

2009 Operating Budget Impact:

 

 

 

 

Equipment

# of Units

Average Hourly Rate

# of Days /Hours

2009 Estimated Cost

Annual Operating Budget (2008 level)

Difference

Loaders-Operating

28

$104.53

64

$187,318

 

 

Loaders-Standby

28

$90.00

130

$327,600

 

 

Total Loaders

28

$194.53

194

$514,918

$308,760

($206,158)

 

 

2008 Operating Budget Impact:

 

 

Equipment

2008 Year to date Unfavourable Variance

Less: 2008 Estimated Costs (Nov – Dec. 2008)

2008 Year end Unfavourable Variance

Loaders  700 504 5407

($366,614)

($128,730)

($495,344)

The shortfall of $495,344 will be included in the 2008 Town wide year end operating balance.

 

 

ALIGNMENT WITH STRATEGIC PRIORITIES:

Not Applicable

 

DEPARTMENTS CONSULTED AND AFFECTED:

Not Applicable

 

RECOMMENDED

                            BY:    ________________________          ________________________

                                      Peter Loukes,                                     Brenda Librecz

                                      Director Operations                            Commissioner, Community    & Fire Services

ATTACHMENTS:

Not Applicable