Report to: General Committee Date Report Authored: October 14, 2010

SUBJECT: Award of Contract # 238-S-10 Laboratory Sampling Analysis

PREPARED BY: Karen Dennison, Ext. 2519

Rosemarie Patano, Ext. 2990

RECOMMENDATION:

1) THAT the report entitled “Award of Contract #238-S-10 Laboratory Sampling Analysis” be received’;

2) AND THAT the contract for # 238-S-10 Laboratory Sampling Analysis be awarded to York-Durham Regional Environmental Laboratory in the estimated contract value of $535,752.00 inclusive of HST for a period of 3 years at the same firm fixed prices per the original contract;

3) AND THAT the tender process be waived in accordance with Purchasing Bylaw 2004-341, Part 11, Section 7(1) h which states “where it is necessary or in the best interest of the Town to acquire non-standard items or Professional Services from a preferred supplier”;

4) AND THAT funds for this contract for the 2011 period be drawn from the 2011 Operating Budget Accounts as listed under financial considerations in the estimated amount of $178,584.00 inclusive of HST, subject to approval of the 2011 operating budget;

5) AND THAT the 2012 – 2013 estimated amounts be provided within the respective years budget submission for the Waterworks Department;

· 2012 $178,584.00

· 2013 $178,584.00

6) AND THAT Staff be authorized and directed to do all things necessary to give effect to this resolution

EXECUTIVE SUMMARY:

Not Applicable

PURPOSE:

The purpose of this report is to obtain council approval to award contract #238-S-10 for Laboratory Sampling Analysis for a period of 3 years at the same firm fixed prices.

BACKGROUND:

The York Durham Regional Environmental Laboratory (YDREL) was established as a joint venture between both York and Durham Regions. On July 14, 1992 Council approved the use of YDREL and since, the YDREL has been the preferred supplier for the Town’s laboratory analysis.

The YDREL is an accredited laboratory and is licensed by the Ministry of Environment (MOE). The Town of Markham is legislated to comply with MOE regulations regarding the drinking water distribution system for assurance of water quality.

The Town of Markham Waterworks department collects and tests over 10,000 samples every year to ensure the safety and quality of the drinking water supplied to our residents. Of these, approximately half must be conducted by an accredited laboratory, licensed by the MOE. Four licensed laboratories are located within the GTA. They are YDREL in Pickering, Maxxam in Mississauga, AGAT in Mississauga and Caduceon in Richmond Hill. Of these laboratories Caduceon is the most recently established, having been in business at this location for only a few months, Staff will review / monitor performance of this laboratory as they become better established prior to next contractual term. AGAT and Maxxam have both been in operation for a longer period of time, but are not as conveniently located as our current laboratory, the York-Durham Regional Environmental Laboratory (YDREL).

OPTIONS/ DISCUSSION:

We are recommending that the Town’s laboratory sampling analyses contract be giving to YDREL, due to the following reasons:

Past Performance, Reliability, and Quality of Service – The YDREL has been the sole provider of microbiology and chemical analyses for the Town of Markham for the past 18 years. During this time we have received excellent and professional service. Without fail, the laboratory has carried out all of the regulatory sampling accurately and promptly. It is critical that the Town minimize its water quality and safety risks by ensuring that reliable and accurate analyses are undertaken and correct documentation is received from the sampling laboratory. While other laboratories have had issues with failing to report adverse results to the Ministry of the Environment (MOE) we have had no such issues with YDREL. This permits us to ensure the safety of the drinking water system that we provide to our residents. Currently all municipalities within York Region, as well as York Region, utilize the services of YDREL.

Comparable Price – The prices of sample testing at YDREL have proven to be competitive with other MOE approved laboratories within the GTA. YDREL has not increased fees to the Town of Markham over the previous four years and have communicated fees will remain constant for 2011.

The prices charged by YDREL for various tests are comparable to other MOE approved laboratories within the GTA region. Staff conducted market research to ascertain price variances by contacting three other MOE approved laboratories within the GTA. While prices were comparable with two of the laboratories, YDREL was 4% higher than one and 5% lower than the other MOE approved laboratories. However, the above noted two comparable MOE approved laboratory are approx. 18kms further than YDREL and considering the frequency of staff trips, this would lead to additional mileage costs of approx. $5,600 a year and increased vehicle gas emissions. When taking into considerations these additional fuel costs, YDREL would change from 4% higher to 1% lower and 5% lower to 10% lower plus a decrease in vehicle gas emissions.

The most recently established laboratory (Richmond Hill) is approximately 12% lower in cost. However, the price they provided is only fixed until December 31, 2010 and at this time they could not provide assurance to the Town that these costs would not be increased in 2011 and if so, by how much. Additionally, upon closer review it was determined that YDREL does not charge an additional fee for the service of uploading results to the MOE, a requirement of our drinking water testing. This new laboratory charges an additional 5% of the invoice cost to upload sample results to the MOE, which is an approximately yearly fee of $5,000. YDREL has also been able to provide us with our raw data on demand without an additional charge, facilitating the preparation of reports for the MOE. The other laboratories noted above will be charging a percentage for this service but without definite cost estimates it is unclear the amount of potential hidden costs associated with this fee.

Also, the turnaround time from the new laboratory for bacteria samples are 3 to 5 days.  If the Town requires a sample in 24 hours (as needed for New Development) a surcharge of 50% is added.    The new laboratory (Richmond Hill) would add a surcharge of $15.00 per sample, therefore charging $45.00 per sample or an additional cost of $10,590.00 per year. When you take into the added uploaded charge and surcharge for 24 hour turnaround time, YDREL would be 3% higher in cost to this new laboratory.

Proximity to Town – The nature of the business requires frequent laboratory visits by staff (3-4 times per week). Of the four laboratories located within the GTA, which are MOE accredited to perform drinking water testing, YDREL is close to us at approximately 32 km from 8100 Warden. The newest laboratory (Caduceon) opened for operation on June 1, 2010 and is closer to the Town but the potential of risk of using a laboratory without an established record is much too high for the Town of Markham and its residents at the current time. Currently, no Municipalities are utilizing them and their site in Richmond Hill only tests for bacteria and pH.  All other tests (Organic, Inorganic, Nitrate, Nitrites, Lead, Metals, THM) are sent off-site by courier to either their Kingston or Ottawa offices.

Legal Sampling Requirements – Waterworks conducts reactive compliance surveillance to ensure the integrity of our sewage infrastructure. These tests must be performed by an accredited laboratory to guarantee the admissibility of the results in a court room. To ensure the safety and security of both projects the choice of a reputable, reliable laboratory is very important and thus the YDREL is recommended.

FINANCIAL CONSIDERATIONS AND TEMPLATE:

The following table is a summary of the financial considerations for this report:
			Account Name	Account #
2011 Operating Budget	$94,919		Reg. Lab Chgs.-Exist Water		760-160-5343
	$42,910		Reg. Lab Chgs.-New	760-160-5342
	$40,755		Reg. Lab Chgs.-Existing	760-530-5343
Total Budget	$178,584	*
Less Cost of Award	($178,584)	*
Budget Remaining	$0

*Annual operating budget and cost of award required for 3 years (2011-2013). Budget and award amount contingent on 2011, 2012 and 2013 operating budget approval.

Note: Please note that part of the cost reflected in the operating budget includes budget for new system sampling from new developments and capital projects (Account # 760-160-5342; $42,910.00). These costs will be off set by user fees charged to developers and from reciprocal sampling charges to contractors.

HUMAN RESOURCES CONSIDERATIONS

Not Applicable

ACCESSIBILITY CONSIDERATIONS:

Not Applicable

ALIGNMENT WITH STRATEGIC PRIORITIES:

The Laboratory Sampling Analysis Contract is consistent with the Town’s corporate goals of Infrastructure Management and Quality Community.

The program enhances several key Waterworks service delivery components:

· Proactive and preventative strategies to identify and manage risks to public health;

· Continuous Improvement of Waterworks activities and service delivery;

Infrastructure Management:

The Laboratory analyses undertaken are a prerequisite to Markham’s building, renewing and strategically managing the Town's infrastructure to meet the demands and expectations of a growing community including the provision of safe drinking water.

Managed Growth:

Provide a framework for the timely delivery of well-planned new communities that are phased and coordinated with the provision of infrastructure, a component of which involves the water distribution system. Timely and accurate Laboratory testing and analysis of drinking water is necessary in the provision of safe quality water to residents.

BUSINESS UNITS CONSULTED AND AFFECTED:

Finance department has been consulted.

RECOMMENDED BY:

ATTACHMENTS:

None