3.2 TENDER FOR MAINTENANCE OF HEATING VENTILATION AIRCONDITIONING (HVAC) EQUIPMENT AND ASSOCIATED WORKS (CF :RR)

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1 Council Meeting, 27 May 2014 Section Page TENDER FOR MAINTENANCE OF HEATING VENTILATION AIRCONDITIONING (HVAC) EQUIPMENT AND ASSOCIATED WORKS (CF :RR) Responsible Director: Ossie Martinz EXECUTIVE SUMMARY To seek Council s approval to accept tenders from appropriately qualified and capable companies to undertake the routine servicing, reactive maintenance, repair and planned replacement / upgrades of Heating Ventilation and Air-Conditioning (HVAC) systems in Council buildings. This contract has an initial term of one year with three, two year extensions. KEY CONSIDERATIONS/ISSUES The tenderers are assessed against the following requirements: company size, structure, management and resources qualifications, experience and current work load customer relationship management sustainable work practices & environmental protection service delivery, methodology, subcontractor management OHS management system information and data management value / price, financial viability, references The evaluation team also considered the value of forming a panel to provide quoted services thus ensuring Council receives the best value at any given time during the contract. All contractors must have passed a Dunn and Bradstreet financial risk assessment. Tender Panel concluded that: 1. One contractor be appointed to provide the routine servicing and reactive maintenance 2. A panel of 5 contractors be appointed to provide an appropriate pool of resources for larger repairs, replacements and upgrades 3. Products used are to be from reputable manufacturers and suppliers that promote fair trade and contractors seek to reduce environmental impacts and energy consumption FINANCIAL IMPLICATIONS Expenditure for this contract is budgeted for in the budget. Rise and fall is calculated annually based on the Melbourne All Groups CPI. CONCLUSION/RECOMMENDATION That Council adopts the recommendation to appoint one contractor for routine servicing / reactive maintenance and five contractors to form a panel of providers for quoted works.

2 Council Meeting, 27 May 2014 Section Page TENDER FOR MAINTENANCE OF HEATING VENTILATION AIRCONDITIONING (HVAC) EQUIPMENT AND ASSOCIATED WORKS (CF :RR) Ward: All Responsible Director: Ossie Martinz RECOMMENDATION That Council: 1. Accepts the tender from TCM Solutions Pty Ltd, for Part A Major HVAC, Part B Minor HVAC for an annual lump sum price of $65,782 (inc GST) for a period of one (1) year with three (3), two (2) year extensions commencing 1 July 2014; 2. Accepts the tender from Precise Air Pty Ltd, TCM Solutions Pty Ltd, CFM Airconditioning Pty Ltd, Quadrant Pty Ltd and Entire Air-Conditioning Pty Ltd to form a panel for Part C quoted repairs, replacements and upgrades based on an agreed schedule of for a period of one (1) year with three (3), two (2) year extensions commencing 1 July 2014; 3. Approves an annual contingency sum of $165,000 (inc GST) plus CPI to be used in Part A, B and C as required to undertake reactive maintenance; 4. Approves an annual sum of $250,000 (inc GST) plus CPI to be used in Part C to undertake plant renewal or replacement; 5. Authorises the Chief Executive Officer to execute the contract agreement; (and) 6. Authorises the Chief Executive Officer to approve each of the extension option(s) the contract agreement, subject to satisfactory performance. INTRODUCTION Council has advertised for appropriately experienced companies to tender for the testing, servicing, maintenance and installation of Heating, Ventilation, Air- Conditioning (HVAC) in Council buildings. BACKGROUND Council buildings contain a wide variety of HVAC equipment, ranging from cooling towers to air-conditioning units. The Building Code of Australia (BCA), Australian Standards, and Occupational Health and Safety legislation, together with the expectations of building occupants, create a complex environment for routine and reactive maintenance activities.

3 Council Meeting, 27 May 2014 Section Page 6 CONTRACT PERIOD The contract is in 3 parts: Part A major plant, Part B minor plant, Part C repairs, replacements and upgrade works. The initial contract period is one (1) year with three (3), two (2) year extensions subject to satisfactory performance. NOTIFICATION Advertisements were placed in The Age newspaper calling for Tenders. Eleven (11) submissions were received by the closing date. TENDERS RECEIVED TCM Solutions Pty Ltd ASM Chilltech Pty Ltd Conte Service Pty Ltd Entire Air Conditioning Pty Ltd Quadrant Pty Ltd CFM Air Conditioning Renown Pty Ltd Inter-Chillers Pty Ltd Trilogy Building Services Pty Ltd Precise Air Pty Ltd Fridgeair EVALUATION Evaluation Panel: The evaluation panel consisted of: Ross Kaplan Facility Services Coordinator Paul McMillan Building Contracts Officer Rob Renshaw Manager Asset Maintenance Services Derek Naylor E Con Strategic (Independent) Basic Compliance Check and Lump Sum Price Assessment: The submissions were subjected to a compliance and lump sum price test. The four highest priced bids were excluded from further assessment as their price exceeded the available budget. Preliminary Evaluation and Interview: The tenders received were assessed according to the following criteria listed in the documentation: company size, structure, management and resources qualifications, experience and current work load customer relationship management sustainable work practices & environmental protection subcontractor management

4 Council Meeting, 27 May 2014 Section Page 7 service delivery financial viability methodology execution of services OHS management system information and data management references value / price Following the evaluation, five (5) of the contractors were short listed. The short listed Tenderers were: TCM Solutions Pty Ltd CFM Air Conditioning Precise Air Pty Ltd Quadrant Mechanical Services Pty Ltd Entire Air Pty Ltd The top three (3) of those TCM Solutions Pty Ltd, CFM Air Conditioning and Precise Air Pty Ltd were invited to attend an interview and present their tenders. All three companies interviewed well and provide valuable information on how each company intended to deliver against the specification. Reference checks were also carried out on all short listed contractors. DISCUSSION The Tenderer with the best overall score was TCM Solutions Pty Ltd, operating out of Melbourne. The company has a strong reputation in the industry for responsive service delivery and quality. The company s investigation and problem solving capabilities are also excellent and are highly regarded in industry. The next highest overall score was Precise Air Pty Ltd. With a head office in Sydney and operations in New South Wales, Victoria, Australian Capital Territory and Queensland. Recent growth in Victoria is supported by interstate administration. Precise Air has a good reputation for delivery of services. The third highest scorer was CFM Air-Conditioning. Based in Melbourne, the company has a good history of service delivery and are implementing new systems of management that will provide excellent reporting and data management in time. The submissions from the other short listed contractors, not interviewed, were all strong in terms of quality, management and reporting, however their pricing for routine servicing was such that they would not provide the best value. However, all companies are well regarded and if offered the opportunity to quote for major repairs, replacement and upgrade works would be highly recommended if they provided the best price on the day. SOCIAL IMPLICATIONS

5 Council Meeting, 27 May 2014 Section Page 8 The major social impacts identified include; energy consumption, noise pollution, release of greenhouse gasses and the disposal/recycling of surplus equipment. Council has specified that all goods must be high efficiency and that annual condition reports products highlight equipment where further efficiency can be achieved. Contractors are required to follow recognised disposal methods to ensure materials are recycled wherever possible and disposed of in an environmentally responsible manner. Contractors are required to observe equal employment opportunity (EEO) together with Occupational Health and Safety requirements for their staff and contractors. Products used are to be from reputable manufacturers and suppliers that promote fair trade principles to eliminate exploitation of persons in the manufacture or distribution of products. FINANCIAL IMPLICATIONS Expenditure for this contract is planned for in the budget. Rise and Fall is calculated annually based on the Melbourne All Groups CPI. CONCLUSION The evaluation panel recommends the appointment of TCM Solutions Pty Ltd, for Part a Major HVAC, Part B Minor HVAC for an annual lump sum price of $65,782 (inc GST). It is also recommended that a panel be appointed for Part C Quoted works. This will ensure that for any larger works the best price can be obtained. It is proposed five contractors be appointed being; TCM Solutions Pty Ltd, CFM Air Conditioning, Precise Air Pty Ltd, Quadrant Mechanical Services Pty Ltd and Entire Air Pty Ltd. The estimated annual value of the contract is approximately $480,000 including GST for an initial term of one (1) year with three (3), two (2) year extensions subject to demonstrated performance. This calculated expenditure includes a reactive contingency sum of $165,000 including GST and $250,000 including GST per annum required to undertake major repairs, replacement and upgrades.

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