HomeMy WebLinkAboutFIN-20-058 - T20-123 Water Heaters Preventative Maintenance Inspections & De-liming ServicesREPORT TO: Committee of the Whole
DATE OF MEETING:2020-08-24
SUBMITTED BY: Ryan Scott,Manager of Procurement, 519-741-2200 ext. 7214
PREPARED BY: Adam Buchholtz, Associate Procurement Specialist,519-741-2200 ext.
7217
WARD (S) INVOLVED:N/A
DATE OF REPORT:2020-08-12
REPORT NO.: FIN-20-058
SUBJECT: T20-123 Water Heaters: Preventative Maintenance Inspections and De-
Liming Services
__________________________________________________________________________________________
RECOMMENDATION:
That Tender T20-123 Water Heaters: Preventative Maintenance Inspections and De-
Liming Services, be awarded to 4 Seasons Heating and Cooling Ltd.,Waterloo, Ontario,
at their tendered price of $473,100.00, plus H.S.T. of $61,503.00, for a total of $534,603.00
per year, for a two (2) year term, with an option to renew for two (2) additional twelve (12)
month terms.
BACKGROUND:
The water hardness in Kitchener is in excess of 25 grams per gallon. The hardness of the water
contributes to reduced life of rental water heater assets. The inspection and removal of lime
increases safety and extends the life of water heaters up to an additional three (3) years.
Inspection and de-liming of the water heater is intended to meet regulatory obligations of the
Technical Standards and Safety Authority. Preventative maintenance is based on the age of the
water heater and will determine if the water heater also requires de-liming.
This tender is based on fixed unit prices for two (2) years for preventative maintenance and de-
liming of residential water heaters. Under the previous contract, the City was not able to provide
the level of service expected and this service had been underspent year over year. This contract
is functioning as a catchup and the amount of planned work will increase significantly from prior
years in order to inspect and maintain a higher percentage of rental water heaters. The quantity
planned through this tender processwill startthe practice of inspecting each asset once at
roughly the mid-point of it’s ten-yearlife.
This increase in service will initially create a budget deficit, however it will be funded in full from
increased budgeted rental revenue. The incremental revenue budget is based on current
existing deployed rental units at current approved rates.
*** This information is available in accessible formats upon request. ***
Please call 520-741-2345 or TTY 1-866-969-9994for assistance.
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With a more regimented inspection schedule, staffexpect long-term savings from both
replacement costs by extending the life of the assets, as well as reduced risk of catastrophic
failure of the tanks reducing claims for damage against the City.
The average annual spend over the past three (3) years was $75,368. The actual spend will
depend on the level of activity throughout the term of the contract.
REPORT:
Tenders were advertised publicly on the City of Kitchenerwebsite. Documents were downloaded
by five (5) interested parties and by the closing date of Wednesday July 15,2020,three (3)
tenders had been received.
The following tenders were received:
Bid Price
4 Seasons Heating and Cooling Ltd. Waterloo ON $534,603.00 *
Triple 8 Plumbing & Heating Inc.Kitchener ON$679,695.00
CJs Express Plumbing and Electrical Ltd.Cambridge ON $1,118,700.00
The price for preventative maintenance inspections and de-liming serviceshas increased 18.8%
from the 2019contract.
The tender was reviewed by J. Thomson, Manager of Business Development and Customer
Experience and D. Oswald, Supervisor Customer Service Utilities, who concur with the above
recommendation.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
The recommendation of this report supports the achievement of the city’s strategic vision through
the delivery of core service.
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FINANCIAL IMPLICATIONS:
The net cost for this request for tender(A), is fair and reasonable for a project of this scope and
the upset limit exceeds the budget allowance (B) provided within the budget.The estimated
deficit (D) will be funded through a conservative increase in budgeted revenues.
Financial Summary for Request for Tender T20-123
Water Heaters: Preventative Maintenance Inspections & De-Liming Services
Total
Estimated Cost
Request for Tender T20-123 costs, including HST534,603.00
less: HST rebate on tender(61,503.00)
Net Cost Being Awarded473,100.00 A
-
Estimated Cost473,100.00 C
Funding Available
Contracted Services320,000.00
Total budget320,000.00 B
Estimated Surplus/(Deficit) (B -C)(153,100.00)D
COMMUNITY ENGAGEMENT:
INFORM – This report has been posted to the City’s website with the agenda in advance of the
council / committee meeting.
ACKNOWLEDGED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services
Department
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