Report to: General Committee Report
Date:
SUBJECT: Award of Tender 014-T-09 Concrete Maintenance
PREPARED BY: Morgan Jones, Ext. 2285
Patti Malone, Ext 2239
RECOMMENDATION:
1)
THAT the
report entitled “Award of Tender 014-T-09 Concrete Maintenance” be received;
2)
And That the contract for Tender 014-T-09 Concrete
Maintenance be awarded to the lowest price bidder, VGN
Construction Limited, in the estimated amount of $769,600.00, exclusive of GST;
3)
And That if the low bidder, VGN
Construction Limited, does not accept the purchase
order for Contract 014-T-09, Staff be authorized to pull the Bid Bond in the
amount of $76,960.00 (10%) as per the terms and conditions set out in the
Town’s tender document;
4)
And That Staff be authorized to
award Contract 014-T-09 to the 2nd lowest priced bidder, Peltar
Paving Co Ltd. , if the low bidder does not accept the purchase order as
outlined in Recommendation # 3;
5)
And That the Director of Operations and Manager of
6)
And That the awards be funded from the Operations and Waterworks Department
2009 Operating and Capital budget accounts as detailed in the financial
template and next years budgets upon approval;
7) And That Staff be authorized to amend the award amounts in years 2009-2011 to reflect changes to the Operations and Waterworks Department Operating and Capital budget accounts (listed in the financial template) approved by Council during the annual budgeting process;
And that Staff be authorized and directed to do all things necessary to give effect to this resolution.
PURPOSE:
The purpose of this report is to obtain Council approval to award Contract 014-T-09.
BACKGROUND:
Tender 014-T-09 Contract Maintenance was released for the
annual concrete maintenance that includes removal and replacement of concrete
infrastructure throughout the Town of
TENDER INFORMATION:
|
Advertised, place and
date |
|
|
Tender closing date |
|
|
Number of contractors
picking up tender documents |
21 |
|
Number of contractors
responding to tender |
7 |
DETAILED PRICING INFORMATION
EXCLUSIVE OF GST:
|
Company |
Total
|
|
VGN
Construction Limited* |
$769,600.00 |
|
Peltar Paving Co. Ltd. ** |
$1,088,830.00 |
|
|
$1,123,790.00 |
|
VBN Paving Limited |
$1,209,840.00 |
|
Serve
Construction |
$1,286,400.00 |
|
Aloia Concrete Contractors Ltd. |
$1,407,975.00 |
|
Trisan Construction |
$1,814,290.30 |
* The quantities within the tender document are estimates and as such, the recommended award amount is within the specified 2009 budget amount identified within the financial section.
** In order to stay within the 2009 annual budget amount, Staff will reduce the quantity of concrete maintenance work by 30% if the low bidder (VGN) does not accept the purchase order as identified within the recommendation section of this award.
Note: VGN Construction Limited unit costs are a decrease of 17% from the 2006-2008 contractual pricing. The unit costs from Peltar Paving Co Ltd is an increase of 16% over 2006-2008 contractual pricing.
OPTIONS/ DISCUSSION:
After tender closing and after the public announcement of prices, the low bidder, VGN Construction Limited (“VGN”), requested that the Town disqualify its tender without imposing any penalties.
VGN’s Position
VGN’s position is that VGN made a genuine pricing error in its tender submission and, as a result of this error, the Town cannot enforce the tender. In a letter to the Town, VGN advised the following: “Our unit price for concrete, and interlock items is clearly low and also mathematics’ error in item # 9 unit price items. Our price barely covers the cost of Mobilizations and demobilization and supply material. This could be easily verified by you, comparing by other bidders. This is a case of ‘clearly demonstrable mistake’. The City, knowing this fact, should not take advantage of the situation and the City cannot legally enforce the conditions of the erroneous form of tender. Our tender should be considered imbalanced and therefore informal. Our preferred option is that the City disqualifies our tender without imposing penalties.”
Town’s Position
With respect to
VGN’s request to withdraw its tender submission, the Town’s position is that it
cannot accept VGN’s request for withdrawal, as requests for withdrawal after
the tender closing date are not permitted by the Town’s General Terms and Conditions (Section 32).
With respect to VGN’s position that the Town
cannot legally enforce the conditions of an erroneous form of tender, the
Town’s position is that the tender submission is irrevocable and
valid for acceptance notwithstanding any error.
This position is supported by the Town’s tender document (page 4, “Submission
Requirements”) which states the following:
Ř “The undersigned agrees
that this bid must be irrevocable and valid for acceptance and that the prices
shall remain firm and unchanged, notwithstanding any error in calculation of
such bid, at the amount stated for a period of NINETY (90) days from the
date of closing of this bid and the Town may at any time within the said period
accept this bid whether any other bid has been previously accepted or not.”
In addition, the pricing error made by VGN did not
negatively impact VGN. VGN incorrectly
stated the unit price for Item No. 9 in the “Price Summary” of VGN’s
tender submission as $4.00 (instead of
$40.00). However, the “Total Price” for
Item No. 9 was correctly stated as $200,000.00 (5000 x $40.00), and the “Total
Price” for Item No. 9 was consistent with the overall price for “Total Items
1-10”. Section 21 of the Town’s General Terms and Conditions
states the following regarding pricing discrepancies:
Ř “In the event of any discrepancy between the unit price and the
extension, the unit price shall govern. Where applicable, the bid prices
shall be extended and totalled.”
In this case, VGN’s tender submission was assessed by
the Town based on the correctly stated “Total Price” for Item No. 9 and overall
price for “Total Items 1-10.” It would be
grossly unfair to take the position that the unit price should govern, since it
is clear that the unit price was in error.
In the event that the Town elects to award
Contract 014-T-09
to VGN and VGN refuses to accept a purchase order for
the work, the Town has the right to enforce the Bid Bond submitted with VGN’s
tender. This position is supported by
the Town’s tender document (page
15 (“Bonds”)) which states the following: “If a Bid is accepted and the Bidder fails
to accept a Purchase Order for the Work, or provide the other necessary bonds
as required after the award of the Contract, the Bid bond will be exercised and
forfeited”.
In
summary, the Town will not permit VGN to withdraw its tender as doing so would
be contrary to the Town’s General Terms and Conditions and could
compromise the integrity of the tender process. If VGN refuses to accept a purchase order for
the work, the Town will have the right to enforce the Bid Bond.
FINANCIAL CONSIDERATIONS AND
TEMPLATE: (external link)
|
The following
table is a summary of the financial considerations for this report: |
||||
|
Original Budget and Account # |
|
$3,718,300 |
|
Various |
|
Current Budget Available (unspent) |
|
$3,718,300 |
|
|
|
Less Cost |
|
($815,400) |
|
Awarded
to VGN Construction Limited, Subject to maximizing the 2009 operating budget |
|
Less Contingency |
|
|
|
|
|
Budget Remaining |
|
$2,902,900 |
|
|
Budgets provided in this award are also used in separate contracts for road maintenance, interlocking repairs, sidewalk/curb repairs parking lots repairs and Waterworks department operating requirements. Therefore, the Operations Department will administer this contract and prioritize work in order to manage spending to the approved budgeted amounts. Should the prioritized work require additional funds beyond the approved budget amounts, staff will follow the expenditure control policy to secure such funding.
HUMAN RESOURCES CONSIDERATIONS
Not Applicable
ALIGNMENT WITH STRATEGIC PRIORITIES:
Not Applicable
BUSINESS UNITS CONSULTED AND AFFECTED:
Legal department has been consulted with respect to the low bidder requesting withdrawal of its tender submission.
RECOMMENDED
BY: ________________________ ________________________
Peter Loukes, Brenda Librecz
Director, Operations Commissioner, Community & Fire Services