Report to: Development Services Committee Report Date: June 22, 2010

SUBJECT: The Award of Tender # 105-T-10, Construction of Birchmount Road Phase 2, CN Rail crossing to 14^th Avenue

PREPARED BY: Alberto S. Lim, Capital Engineer, ext. 2860

Robert Slater, Senior Construction Buyer, ext 3189

RECOMMENDATION:

1. That the June 22, 2010 staff report entitled “The Award of Tender #105-T-10, Construction of Birchmount Road Phase 2, CN Rail Crossing to 14th Avenue” be received;

2. And that the Tender # 105-T-10, Construction of Birchmount Road Phase 2, CN Rail crossing to 14th Avenue, be awarded to Dagmar Construction Ltd., the lowest bidder, in the amount of $7,926,647.60 inclusive of HST;

3. And that a contingency amount of $396,332.38 inclusive of HST (5.0% of construction cost) be established to cover any additional construction costs and that the Director of Engineering be authorized to approve the expenditure of this contingency amount up to the specified limit;

4. And that staff be authorized to retain AECOM Limited as preferred supplier to provide construction inspection, contract administration services, environmental inspection and material testing for the project to an upset limit of $491,486.55 inclusive of HST, in accordance with Purchasing By-Law 2004-341, Part II, Section 7 (1)(h);

5. And that a contingency amount of $49,148.66 inclusive of HST be established to cover any additional construction inspection and contract administration services, environmental inspection and material testing and that the Director of Engineering be authorized to approve the expenditure of this contingency amount up to the specified limit;

6. And that staff be authorized to issue a purchase order to CN Rail as preferred supplier for an amount of $2,655,936.00 inclusive of HST for the cost of work to be carried out by CN Rail to cover the railway diversion, site inspection for the diversion and grade separation construction, engineering review, CN internal administration and the CN flagging operation in accordance with Purchasing By-Law 2004-341, Part II, Section 7 (1) (b);

7. And that a contingency amount of $265,593.60 inclusive of HST be established to cover any additional work to be carried out by CN Rail and that the Director of Engineering be authorized to approve the expenditure of this contingency amount up to the specified limit;

8. And that if required, staff be authorized to retain a consultant that will provide assistance in the audit and review of CN charges with an upset limit of $25,000.00 inclusive of HST;

9. And that the Town upfront the Region of York funding of $1,642,675.59 inclusive of HST for the detailed design, contract administration, utility relocations and construction of the 14th Avenue intersection improvement works at Birchmount Road including contingencies with monthly recoveries from the Region of York;

10. And that Staff be authorized to issue a Purchase Order to AECOM Ltd. in the amount of $85,000.00 inclusive of HST to cover the detailed design of the 14^th Avenue Intersection Improvements.

11. And that Staff be authorized to issue Purchase Orders to the various utility companies for the relocation of their existing facilities on 14^th Avenue up to a total of $200,000.00 inclusive of HST to the satisfaction of the Director of Engineering;

12. And that funding for the project “Birchmount Road – Phase 2 Construction” be provided from the approved Capital Budget account # 083-5350-8047-005 including any recoveries from the Region of York;

13. That the remaining funding of $0.9M for Birchmount Road – Phase 2 Construction account # 83-5350-8047-005 be used for property and easement acquisition and others related to this project; and,

14. And that staff be authorized and directed to do all things necessary to give effect to the above resolutions.

EXECUTIVE SUMMARY:

The construction of Birchmount Road Phase 2 will complement the Growth Management destined for the Markham Centre area. The grade separation is a vital link to the Transportation and Transit network supporting the projected travel demands.

The first phase of Birchmount Road extension from Enterprise Boulevard to the CN Rail was completed in October 2009. Birchmount Road Phase 2 from CN Rail to 14th Avenue involves the construction of a temporary rail diversion, a grade separation, a collector road under the CN Rail, the widening of the existing Birchmount Road to 14th Avenue. The Region of York requested that as part of this construction, intersection improvements at the 14th Avenue intersection also be included with cost recoveries from the Region.

The Council resolution of March 24th, 2010 approved the advancement of Birchmount Road Phase 2 from 2011 to 2010. The same Council resolution also authorized the Mayor and the Clerk to sign the CN agreement. The principles of the CN agreement stipulate that the Town will fund the costs for the railway diversion, CN site inspection ad CN flagging operations.

Contractors bidding for this project were required to go through a prequalification process in order

to ensure that they have the necessary qualifications, experience and resources to carry a rail-carrying substructure project in accordance with the Town of Markham and CN Rail requirements and specifications.

Construction is anticipated to start in the first week of August, 2010. After CN forces carry out the railway diversion operation, construction of the CN subway structure will proceed for the remainder of the 2010 construction season and will be completed in the summer of 2011. The construction of Birchmount Road is expected to start in the spring of 2011 and will be completed in the fall of 2011. The intersection improvements at 14^th Avenue will not proceed until after May 1, 2011 following the relocation of some exiting utilities which are to be completed this year. All works are scheduled to be completed by December 31, 2011

PURPOSE:

The purpose of this report is:

· To award the contract for the construction of Birchmount Road Phase 2 from CN Rail crossing to 14^th Avenue including the CN grade separation

· To retain the consultant to provide construction inspection, contract administration, environmental inspection and materials testing services for this project and

· To issue a purchase order to CN Rail to cover the railway diversion, site inspection, engineering administration and CN flagging required for the construction of the grade separation and related temporary rail diversion.

· To advise Council as to the status of MOE approval, properties and easement acquisitions related to the risk of the tender award.

· To issue purchase orders to the various utility companies for the relocation of their existing facilities at the 14^th Avenue intersection

OPTIONS/ DISCUSSIONS:

1. CN Rail

Prior to the construction of the proposed grade separation, the Town is required to sign a CN rail crossing agreement with CN Rail. Included in the principles of this agreement is that the Town will fund the railway diversion, site inspection, engineering administration and flagging operations required for the construction of the proposed grade separation (including the necessary rail diversion). The Council resolution of March 24^th, 2010 has authorized the Mayor and Clerk to sign the CN Agreement in a form satisfactory to the Chief Administrative Officer and the Town Solicitor. The Town’s Legal Department and CN’s legal counsel have reviewed the CN agreement and have agreed on the final form. The agreement is expected to be executed by the end of June.

CN Rail requires that the contractor who will be constructing the grade separation on Birchmount Road has constructed a rail carrying sub-structures within the past 10 years and that members of the construction team including the supervisor and the project management staff for this project must also have worked on a bridge supporting railway tracks also within the past 10 years. A prequalification process therefore had to be carried out to ensure that all bidders would have the qualifications, experience and resources to complete the works in accordance with both the Town of Markham and CN Rail requirements.

2. Special Consulting Services to review CN charges

The CN charges total $2.65 million and to keep the cost under control, staff would like the option of retaining a consultant with an upset limit fee of $25,000 that will audit and review the CN charges to ensure that they are within established confines consistent with industry-standard rates and provide value-engineering alternatives.

3. Region of York

During the approval process, the Region of York requested that the intersection of Birchmount Road and 14^th Avenue be constructed to its ultimate condition with dedicated left-turn lanes and right-turn lanes in support of the traffic study that was submitted as part of this project. The improvements on 14^th Avenue will require pavement widening with tapering lengths as per Regional standards. Existing utilities comprising of facilities from Bell, Telus, Rogers and Powerstream will require relocations to accommodate the pavement widening. The design for the relocation of the existing utilities is underway and relocation works will begin shortly. Utility relocation works are expected to be completed by end of the year.

The cost of construction for the intersection improvements is included in the tender price. The costs for the contract administration and construction inspection for the intersection improvements have been included in the consultation price submitted by the consultant, AECOM. AECOM as well submitted a fee of $85,000.00 inclusive of HST to complete the design of the 14^th Avenue Intersection works. Staff is requesting that a purchase order in this amount be set to cover the design fee. These costs will be upfronted by the Town but with recoveries from the Region of York as summarized in the Financial Consideration of this report. The Region has provided their commitment in support of the recoverable costs.

4. Prequalification

The prequalification was issued in accordance with the Purchasing By-law 2004-341. The Town set out criteria for evaluation and only bidders that score a minimum of score of seventy-five points based on these criteria were considered eligible for prequalification.

PREQUALIFICATION INFORMATION

Advertised, place and date	ETN March 17, 2010
Prequalification closed on	April 9, 2010
Number of Contractors submitting proposals	11
Number of Contractors prequalified	5

5. Construction Tender

The construction tender #105-T-10 was issued in accordance with the Purchasing By-law 2004-311. Engineering and Purchasing staff and the consultant have reviewed the bid documents and are satisfied that all items, conditions, bid prices and specifications comply with the Town’s requirements. The tender results are summarized in the following table:

BID INFORMATION

Tender Release	May 14, 2010
Bids closed on	May 28, 2010
Number of Contractors picking up bid documents	5
Number of Bids Received	5

Detailed pricing information as submitted is as follows;

Contractor	Tender Price (Exclusive of all taxes)	Corrected Tender Price (Exclusive of all taxes)	Tender Price (Inclusive of HST)*

Dagmar Construction Inc.	$ 7,789,551.51	$7,789,551.49	$7,926,647.60
Dufferin Construction Company	$ 8,762,296.52	no changes	$8,916,512.94
Toronto Zenith Contracting	$ 9,323,324.95	no changes	$9,487,415.47
Soncin Construction Corporation	$ 9,857,422.66	no changes	$10,030,913.30
Aecon Construction	$10,068,354.25	no changes	$10,245,557.28

*Prices have been increase by 1.76% to indicate HST

The bids were verified for accuracy and compliance with the tender terms and conditions. There was a slight mathematical error in Dagmar’s bid and the corrected tender price does not affect Dagmar’s lowest tender standing. Town staff has reviewed the tender submitted by Dagmar Construction and are satisfied that all terms, conditions, bid prices and specifications comply with the Town’s requirements. Dagmar Construction provided evidence of company’s past experience in this type of projects and references were checked as part of the prequalification process.

6. Detailed Design, Contract Administration, and Site Inspection Services

The Town’s purchasing By-law 2004-341, Part II, Section 7(1)(h) allows for the acquisition of consulting professional services from a preferred supplier without seeking proposals if the service is non-standard and has a proven track record with the Town in terms of quality, pricing and servicing.

AECOM Ltd.(formerly TSH) was retained by the Town in June 2004 to provide the design services for the entire Birchmount Road extension from Enterprise Boulevard to 14th Avenue. On April 10, 2007 Council authorized staff to retain AECOM to provide construction inspection and contract administration services for the Phase I (Enterprise Drive to CN Rail) portion of the Birchmount Road extension project. AECOM was also retained through authority by Council to provide construction inspection and contract administration in the completion of the default contract of Phase I. Staff is satisfied with AECOM’s performance on the project and is recommending the retention of AECOM to provide the construction inspection, contract administration, environmental inspection and materials testing for Phase 2.

AECOM initially identified a cost proposal of $576,887 (Inclusive of HST) for consulting services based on 62 weeks of construction activity from August 2010 to December 2011. This has been successfully negotiated down by staff to $491,486.55 (Inclusive of HST) or a reduction of $85,400.45 for full-time construction inspection, contract administration, environmental inspection and materials testing. The negotiated fee is approximately 4.1% of the project cost and is considered a very good rate for projects of this magnitude and complexity. Details regarding fees for these services are included in the Financial Consideration section of this report.

Given AECOM’s experience, qualifications, price competitiveness and favourable previous performance, staff is recommending that AECOM be retained to provide construction inspection, contract administration, environmental inspection and materials testing for this project.

7. Streetscape

A landscape plan had been prepared as part of the construction drawing set and had been reviewed by the Town’s Urban Design Group. The landscape design includes the selection of tree species and the number of trees in accordance with the Town’s “Trees for Tomorrow” Streetscape Manual. As part of this project, over 440 new trees will be planted along the Birchmount Road corridor from Enterprise Boulevard to 14^th Avenue. Concrete sidewalks, bike lanes and street illuminations are proposed on both sides of Birchmount Road.

8. Outstanding Issues

a. Outstanding Property Issues

Temporary easements for grading purposes and reconstruction of driveway entrances were previously obtained on the private properties fronting Birchmount Road immediately north of 14^th Avenue during the construction and relocation of existing utilities on Birchmount Road. The terms of the easement agreements however have since lapsed and negotiations are underway to renew these agreements. Until such time that these easement agreements are in place, restrictions have been placed on the contractor to complete the grading for the roadway and the boulevard entirely within the public right-of-way as detailed under interim grading conditions in the contract document. If during the course of construction the Town is granted access to any or all of these properties, the contractor will be required to complete the grading and paving as detailed under ultimate grading in the construction drawings.

b. Permits and Approvals

i. Regulatory Agency Approval

Approvals and permits for the project have been secured from CN Rail, the Toronto Region Conservation Authority (TRCA) and the Region of York.

ii. Ministry of Environment Permits

The Certificate of Approval (C. of A.) from the Ministry of Environment (MOE) for the relocation of the existing storm sewer south of the CN rail track is pending. The application has been submitted and approval is expected in June/July. The relocation of the existing storm sewer cannot proceed until the completion of the railway underpass structure in summer of 2011. The MOE C. of A. should therefore be in place well ahead of the schedule for the sewer construction.

9. Project Schedule

The construction for Phase 2 of the Birchmount Road Extension from the CN Rail to 14^th Avenue is scheduled to begin in the first week in August, 2010. It is anticipated that the construction of the rail diversion grading and sub-ballast will take about 6 weeks after which time forces from CN Rail will carry out utility relocation work within their corridor and complete the track diversion (2 rail tracks). This task will take place over a period of two weekends (one track per weekend).

Construction of the CN subway structure will proceed (following the diversion of the tracks) for the remainder of the 2010 construction season and is expected to be finished in the summer of 2011 at which time CN Rail forces will shift the tracks and relocate their existing utilities on to the new structure.

The construction of Birchmount Road is expected to start in the spring of 2011 and will be completed in the fall of 2011 after the removal of the track diversion.

The design for the relocation of existing utilities on 14^th Avenue is underway and relocation work is scheduled to start shortly with all utility relocation work to be completed by the end of the 2010. In the Birchmount phase 2 contract specifications, the contractor has been warned that the widening of 14^th Avenue cannot proceed until after May 1, 2011.

All works are scheduled to be completed by December 31, 2011.

FINANCIAL CONSIDERATIONS:

Staff recommends that tender for the construction of Birchmount Road Phase 2 from CN Rail crossing to 14^th Avenue including the CN grade separation be awarded to Dagmar Construction in the amount of $7,926,647.60 inclusive of HST. The total cost of the construction of this project with the grade separation and the 14^th Avenue intersection improvements is summarized below:

TOTAL PROJECT COSTS

Item		Cost (Inclusive of HST)*
Construction Cost		$ 7,926,647.60
Construction Cost Contingency		$ 396,332.38
Construction Inspection, Contract Admin., Environmental Inspection and Materials Testing		$ 491,486.55
Construction Inspection, Contract Admin., Environmental Inspection and Materials Testing Contingency		$ 49,148.66
CN Rail:
- Rail diversion - Inspection for the diversion and grade separation construction	$2,086,080.00 $ 254,400.00
- Engineering review and administration	$ 61,056.00
- CN Flagging	$ 254,400.00
CN Rail Total $2,655,936.00		$ 2,655,936.00
CN Rail charges contingency		$ 265,593.60
Special Consulting Service to Review CN charges		$ 25,000.00
Detailed design – 14^th Avenue Intersection		$ 85,000.00
Utility Relocation - 14^th Avenue		$ 200,000.00
Engineering Department Capital Administration Fees @ 4.5% in accordance to the amended fee By-law 2002-276		$ 544,281.52

Total Project Cost		$ 12,639,426.30

*Prices have been increase by 1.76% to indicate HST

The Town share of the Project cost is summarized in the following table:

TOWN-SHARE COSTS

Item	Cost (Inclusive of HST)
Construction Cost	$ 6,765,944.39
Construction Cost Contingency	$ 338,297.22
Construction Inspection, Contract Admin., Environmental Inspection and Materials Testing	$ 429,486.55
Construction Inspection, Contract Admin., Environmental Inspection and Materials Testing Contingency	$ 42,948.66
CN Rail Charges	$ 2,655,936.00
CN Rail charges contingency	$ 265,593.60
Special Consulting Service to Review CN charges	$ 25,000.00
Engineering Department Project Management Fee @ 4.5%	$ 473,544.29

Total Town-Share Cost	$ 10,996,750.71

*Prices have been increase by 1.76% to indicate HST

The Town will upfront the cost for this project and recoveries will be provided from the Region of York: The Region has provided their commitment in support of the recoverable costs.

REGION-SHARE COSTS

Item	Cost (Inclusive of HST)*
14^th Avenue Intersection Improvements Construction Cost	$ 1,160,703.21
Construction Contingency	$ 58,035.16
Detailed design – 14^th Avenue Intersection	$ 85,000.00
Construction inspection and contract administration for the 14^th Avenue Intersection Improvements	$ 62,000.00
Construction Administration Contingency	$ 6,200.00
Utility relocation to facilitate the 14^th	$ 200,000.00
Markham Engineering Department Project Management Fee @ 4.5%	$ 70,737.23

Total Recoverable from the Region of York	$ 1,642,675.59

*Prices have been increase by 1.76% to indicate HST

FUNDING SOURCES

Funding for the project shall be provided from the approved Capital Budget account # 083-5350-8047-005 including any recoveries from the Region of York. The Council resolution of March 24th, 2010 approved the transfer of $10 million from the 2010 Capital funding for Rodick Road Phase 3 account #83-5350-9300-055 to Birchmount Road Phase 2. An additional funding for Birchmount Road Phase 2 in the amount of $1,650,000.00 to be funded from the Town Wide Hard Development Charge Reserve was also included in the same Council Resolution of March 24, 2010. Currently account # 083-5350-8047-005 has an available uncommitted funds for $11.9 million and this, together with the recoverable funds from the Region of York would be sufficient to cover the total project cost of $12.6 million.

The remaining funding of $0.9M for Birchmount Road – Phase 2 Construction account # 83-5350-8047-005 will be used for property and easement acquisitons;

HUMAN RESOURCES CONSIDERATIONS

Not applicable

ALIGNMENT WITH STRATEGIC PRIORITIES:

BUSINESS UNITS CONSULTED AND AFFECTED:

The Finance Department has reviewed and concurs with this report.

RECOMMENDED BY:

________________________ ________________________

Alan Brown, C.E.T. Jim Baird, M.C.I.P., R.P.P.

Director of Engineering Commissioner, Development Services

ATTACHMENTS:

Figure 1: Birchmount Road, Phase 1 and 2

Q:\Development\Engineering\REPORTS\2010\June\Birchmount Road phase 2\Staff Award 105-T-10 ASL (3).docx