Amendment to Contracts, , , for Repairs of Water and Sewer Connections, Mains and Appurtenances

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1 PW9.9 STAFF REPORT ACTION REQUIRED Amendment to Contracts, , , for Repairs of Water and Sewer Connections, Mains and Appurtenances Date: October 28, To: From: Wards: Reference Number: Public Works & Infrastructure Committee General Manager, Toronto Water Director, Purchasing and Materials Management Division All Wards P:\\Cluster B\TW\PWI15026 SUMMARY The purpose of this report is to request authority to amend Contract for Repairs of Water and Sewer Connections, Mains and Appurtenances in the Toronto East York District; Contract for Repairs of Water and Sewer Connections, Mains and Appurtenances in the Etobicoke York District and; Contract for Repairs of Water and Sewer Connections, Mains and Appurtenances in the North York District as a result of increased work volumes in the first three quarters of and projected work load volumes to December 31,. RECOMMENDATIONS The General Manager of Toronto Water and the Director of Purchasing and Materials Management recommend that: 1. Public Works and Infrastructure Committee in accordance with Section C of the City of Toronto Municipal Code Chapter 71 (Financial Control By-Law), grant authority to amend Contract with OJCR Construction Ltd., for Repairs of Water and Sewer Connections, Mains and Appurtenances in the Toronto East York District, Tender , by an additional amount of $1,700,000 net of all taxes Mains and Appurtenances 1

2 ($1,729,920 net of HST recoveries) revising the current value from $8,637,700 to $10,337,700 net of all taxes ($10,519,644 net of HST recoveries). 2. Public Works and Infrastructure Committee in accordance with Section C of the City of Toronto Municipal Code Chapter 71 (Financial Control By-Law), grant authority to amend Contract with OJCR Construction Ltd., for Repairs of Water and Sewer Connections, Mains and Appurtenances in the Etobicoke York District, Tender , by an additional amount of $3,200,000 net of all taxes ($3,256,320 net of HST recoveries) revising the current value from $6,071,175 to $9,271,175 net of all taxes ($9,434,348 net of HST recoveries). 3. Public Works and Infrastructure Committee in accordance with Section C of the City of Toronto Municipal Code Chapter 71 (Financial Control By-Law), grant authority to amend Contract with Finch Paving (1993) Ltd., for Repairs of Water and Sewer Connections, Mains and Appurtenances in the North York District, Tender , by an additional amount of $300,000 net of all taxes ($305,280 net of HST recoveries) revising the current value from $4,813,050 to $5,113,050 net of all taxes ($5,203,040 net of HST recoveries). Financial Impact The three (3) contract amendment requests included in this report will increase the total contract values for all contracts combined by $5,200,000 net of all taxes ($5,291,520 net of HST Recoveries). The following table illustrates the account allocations for the distribution of requested amendments. Contract Contract Contract Awarded Value $7,365,084 $4,651,628 $3,676,640 Amendment 1 $1,424,640 $1,526,400 $1,221,120 Subtotal (a) $8,789,724 $6,178,028 $4,897,760 Amendment 2 CPW $610,560 $254,400 $50,880 CWW $763,200 $2,493,120 $203,520 TW $0 $508,800 $50,880 TW $356,160 $0 $0 Subtotal Amendment 2 (b) $1,729,920 $3,256,320 $305,280 Revised Target Value (a+b) $10,519,644 $9,434,348 $5,203,040 Note: above figures are Net of HST Recoveries. The Deputy City Manager & Chief Financial Officer has reviewed this report and agrees with the financial impact information. Mains and Appurtenances 2

3 DECISION HISTORY On December 18 and December 23, 2014, by authority of Bid Committee, Contracts , and respectively were awarded to two (2) vendors for the Repairs of Water and Sewer Connections, Mains and Appurtenances in each of the respective districts. Each contract was issued to cover the period from January 1, to December 31,, with one (1) additional option year. The following are the links to the Bid Committee approvals for the three affected contracts: The Public Works and Infrastructure Committee considered a report to amend these contracts and adjust funding in the Operating Budget for District Operations at its meeting of June 17, which was adopted without amendment by City Council on July 7,. The report can be found at the following link: ISSUE BACKGROUND General repair contracts are issued annually to supplement operations and maintenance of Toronto Water's infrastructure. Contractors are used to peak shave workloads to ensure response to emergency and priority repairs/replacements of water mains; sewers; drains; water services along with maintenance holes; valve chambers and hydrants. Infrastructure repairs and replacements undertaken also include construction works that are more complex requiring specialized equipment and/or processes that typically are not undertaken by City staff. Toronto Water issues these contracts with estimates generated by the work production of the average of the previous two contract cycles. In, the contract work load increased as a result of the unprecedented cold winter weather. These contractors, during the months of February and March, predominately thawed and/or replaced frozen water services. In July, City Council approved an amendment to the contract value to cover the cost of the unanticipated work. Work orders issued to these contractors continued throughout the year at a level that exceeded the projections made at the contract estimate phase. As the work, work type and complexity is very unpredictable the target contract values are at a point where they have been exceeded and/or are projected to be exceeded by December 31,, the end of the first contract year. Mains and Appurtenances 3

4 COMMENTS In early, Toronto Water endured an emergency when in excess of 4500 no water complaints generating 1680 work orders for frozen water services. Contractors under these contracts responded to and thawed 914 services as outlined in the report referenced in the decision history section of this report. As a result Purchase Order Amendments totaling $5,495,040 Net of HST recoveries were made to the contracts. Work Orders issued to contractors continued to increase in exceeding the projections made at the time of contract preparation and competitive bidding. Contract Repairs of Water and Sewer Connections, Mains and Appurtenances in the Toronto East York District Work Type Contract Work Order Analysis Tendered Actual Work Increased / Work Order Order Volume to Decreased Volume to September 15, Volume over September 15, Estimate Projected Work Volume to December 31, Sewer Drain Repair Or Replacement % 6 Water Main Repair % 13 Water Service Replacements % 41 Main Sewer Repair % 8 Total Work Orders % 68 Repair/replacement work in Toronto/East York District increased a combined 16% across all asset classes during the first three quarters of. The majority of the increase in cost is a result of work completed on the City's main sewer and drain connections. To date Toronto Water has spent or committed works that exceed the contract value by $110,000. Toronto Water is projecting that additional work to December 31, will require an additional $1,590,000 to complete. The requested contract amendment for this contract is $1,700,000 net of all taxes. Mains and Appurtenances 4

5 Contract for Repairs of Water and Sewer Connections, Mains and Appurtenances in the Etobicoke York District Work Type Contract Work Order Analysis Tendered Actual Work Increased / Work Order Order Volume to Decreased Volume to September 15, Volume over September 15, Estimate Projected Work Volume to December 31, Sewer Drain Repair % 46 Or Replacement Water Main Repair % 5 Water Service % 59 Replacements Main Sewer Repair % 9 Total Work Orders % 119 Repair/replacement work in Etobicoke York District increased a combined 103% across all asset classes during the first three quarters of. To date, Toronto Water has spent or committed works that exceed the contract value by $1,200,000. Toronto Water is projecting the additional work to December 31, will require an additional $2,000,000 to complete. The requested contract amendment for this contract is $3,200,000 net of all taxes. Contract for Repairs of Water and Sewer Connections, Mains and Appurtenances in the North York District Work Type Contract Work Order Analysis Tendered Actual Work Increased / Work Order Order Volume to Decreased Volume to September 15, Volume over September 15, Estimate Projected Work Volume to December 31, Sewer Drain Repair % 26 Or Replacement Water Main Repair % 7 Water Service % 19 Replacements Main Sewer Repair % 7 Total Work Orders % 59 Mains and Appurtenances 5

6 Repair/replacement work in North York District increased a combined 2% across all asset classes during the first three quarters of. Notwithstanding a reduction in drain repairs and water main repairs there was a significant increase of 84% of work undertaken in upgrading and/or replacing substandard water services. Toronto Water is projecting the additional work to December 31, will require an additional $300,000 net of all taxes to complete. The requested contract amendment for this contract is $300,000 net of all taxes. CONTACT Frank Trinchini Manager, Contract Services Toronto Water Phone: ftrinchi@toronto.ca Allison Phillips Manager, Professional Services Purchasing and Materials Management Phone: aphilli2@toronto.ca SIGNATURE Lou Di Gironimo General Manager Toronto Water Michael Pacholok Director Purchasing and Materials Management Mains and Appurtenances 6