Report to: General Committee Date Report Authored: September 16, 2009

SUBJECT: Award of Tender 244-T-09 Supply and Delivery of Sodium Chloride (Highway Coarse Rock Salt) York Region Buyers Cooperative (T-09-71)

PREPARED BY: Morgan Jones, ext. 2285

Rosemarie Patano, ext. 2990

RECOMMENDATION:

1) THAT the report entitled “Award of Tender 244-T-09 Supply and Delivery of Sodium Chloride (Highway Coarse Rock Salt) York Region Buyers Cooperative (T-09-71) ” be received;

2) AND THAT Tender 244-T-09 Supply and Delivery of Sodium Chloride (Highway Coarse Rock Salt) York Region Buyers Cooperative (T-09-71) be awarded to the lowest priced bidder, Sifto Canada Corp. in their unit price of $73.87 per ton including delivery and inclusive of 8% PST in the estimated annual amount of $995,989.21;

3) AND THAT the term of the contract shall be for three (3) winter season from October 2009 – April 2012 with the same 2009 itemized unit pricing;

4) AND THAT the November 1^st – December 31^st 2009 costs, estimated at $236,384.00 be charged to the Operating Account # 700 504 4525 Salt;

5) AND THAT the 2010-2012 estimated costs provided for within the respective years budget submission for the Operations Department;

§ 2010 $995,989.21

§ 2011 $995,989.21

§ 2012 (Jan 1 – Apr 30) $664,040.03

7) AND THAT the 2010-2012 Purchase Orders be adjusted due to growth (increase in kilometres of roadway) based on approved budgets for each year;

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 award the contract for Supply and Delivery of Sodium Chloride (Highway Coarse Rock Salt), Tender 244-T-09 (York Region Co-op Tender

T-09-71)

BACKGROUND:

York Region, on behalf of the York Region Public Buyers Co-operative, issued a tender for the Supply and Delivery of Sodium Chloride (Highway Coarse Rock Salt), which closed on September 1, 2009.

BID INFORMATION:

Advertised, place and date	(ETN)
Bids Closed On	September 01, 2009
Number picking up bid documents	6
Number responding to bid	1

Three vendors were notified of the tender by E-mail. The three following vendors were invited to bid:

§ The Canadian Salt Company Ltd.

§ Sifto Canada Corp.

§ Cargill Salt

Canadian Salt Company submitted a notification that they were unable to bid due to the requirements of guaranteeing the supply of Salt without any liquidated damages. Supplies and Services received an email prior to the closing from Cargill Salt to state they do not have enough tonnage available to bid on the entire tender. The three other companies who downloaded the documents were not salt distributors.

DETAILED PRICING INFORMATION

Vendors	Unit Price Per Tonne (Delivered)	Estimated Annual Usage in tonnes	Extended Annual Cost
Sifto Canada Corp.	$73.87	13,483	$995,989.21

Note: Unit Prices are inclusive of PST, exclusive of GST

The unit price has increased by estimated annualized cost of 3.67% (11% over a 3 year period) in comparison to the previous Salt contract (2006-2009) and the price is firm fixed for the 3 year contract.

OPTIONS/ DISCUSSION:

The Town compared the York Region Buyers Cooperative pricing with the Town of Newmarket, who opted to investigate pricing on their own. Sifto Canada Corp was their sole bidder with a quoted price of $76.74/ton that translates to an annual cost of $1,034,685.42 based on the Town’s estimated annual usage (an increase of $38,696.21 or $2.87 per ton) compared with the York Region Buyers Cooperative pricing that also includes a liquidated damages clause or late delivery.

The York Region Buyers Cooperative bid document is better suited to the interests of the Town of Markham, as it identifies that time is of the essence for the delivery or provision of salt for the winter road operations. If the Contractor fails to deliver the salt to the Owner specified locations within the timeframe(s), liquidated damages will be applied according to Section 1.34 – Liquidated Damages:

§ If the Contractor fails to deliver the salt within the timeframe(s) outlined in the Contract or any extensions thereto, in addition to all amounts for which it may otherwise be liable to pay the Owner, and without prejudice to any other remedy available to the Owner, the Contractor shall pay to the Owner liquidated damages in the amount of $0.50 per metric tonne (Mg) for each hour until the salt has been delivered to the appropriate location(s) to the satisfaction of the Owner. This amount per hour is a genuine estimate of the actual costs which will be incurred by the Owner as a result of the failure of the Contractor to complete the work within the allotted timeframe(s) as detailed in Section 1.2 - Contract Term / Delivery Date.

The short supply and late deliveries of Sodium Chloride (Highway Coarse Rock Salt), experienced by the Town of Markham in previous years, placed the Town and its residents at risk with their road safety. This clause would allow the Town to hold the awarded Contractor liable. This action would help ensure consistent and prompt supply from the awarded Contractor, while offsetting any financial implications that would arise from reacting to the Town emergency of a Contractor’s short supply of salt.

As well, Sifto Canada Corp responded to the York Region Buyers Cooperative bid document for three (3) winter season from October 2009 – April 2012 with the same 2009 itemized unit pricing; Town of Newmarket will see incremental increases for the three year term.

FINANCIAL CONSIDERATIONS AND TEMPLATE:

The following table is a summary of the financial considerations for this report:
Original Budget and Account #	$976,478	700-504-4525 Salt
Current Budget Available (unspent)	$178,889
Less Cost	($236,384)	Awarded to Sifto Canada Corp.
Budget Remaining	($57,495)

The shortfall of $57,495.00 will be incorporated in the year end projection for 2009 operating results and absorbed within the anticipated year end surplus of $0.5 - $1.5 million before year end accounting accruals.

HUMAN RESOURCES CONSIDERATIONS

Not applicable.

ENVIRONMENTAL CONSIDERATIONS:

The Town utilizes computerized spreader control devices to effectively manage the quantity of winter control material applied to the streets, while maintaining approved service levels. All vehicles are calibrated at the beginning of the winter season to ensure application rates are maintained. Town staff continually monitors weather conditions through the use of RWIS, (Road Weather Information System), and Environment Canada to optimize our responses to weather occurrence.

Staff is also investigating the supply and delivery to supply an evolutionary product called THAWROX), supplied by Sifto Canada Corp and Innovative Surface Solutions, two of Ontario’s leading suppliers of ice control products that have joined forces.

Thawrox is a new “Pre Treated” Rock Salt that is encapsulated in a performance enhancing, corrosion inhibiting liquid solution. Convenient and efficient, Thawrox eliminates the need for handling liquids (such as brine solutions), and is an environmentally friendly alternative to Sodium Chloride (Highway Coarse Rock Salt).

Some of the major features include:

• Increases the rate at which the salt begins working
• Reduces overall salt requirement by 25-40%
• Increases penetration into ice and snow pack
• Use salt at lower temperatures
• Prevent the stockpile from freezing or “clumping”
• Helps protect equipment form corrosion

BUSINESS UNITS CONSULTED AND AFFECTED:

Not applicable.

RECOMMENDED

BY: ________________________ ________________________

Peter Loukes Brenda Librecz, Director of Operations Commissioner, Community

& Fire Services