HomeMy WebLinkAboutINS-17-020 - Water Meter Replacement Program - Purchasing Clarification
REPORT TO: Finance and Corporate Services
DATE OF MEETING: March 6, 2017
SUBMITTED BY: Cynthia Fletcher, Interim Executive Director (INS), 519-741-
2600 X4424
PREPARED BY: Angela Mick, Utilities Water Engineer, 519-741-2600 X4408
WARD(S) INVOLVED: All
DATE OF REPORT: February 8, 2017
REPORT NO.: INS-17-020
SUBJECT: Water Meter Replacement Program – Purchasing Clarification
______________________________________________________________________
RECOMMENDATION:
For Information
BACKGROUND:
Council awarded a contract to Neptune Technology Group (Canada) in 2015 for the
supply and installation of water meters. The contract was for a one-year term ending
May 2016, with two one-year renewals ending May 2017 and May 2018. The report
which recommended approval of the contract inadvertently omitted wording to indicate
the actual spend would be based on the number of units required to be installed in a
given year, which is standard report wording for a contract of this nature. The purpose
of this report is to correct that omission in a transparent fashion so that staff may
administer the contract as required to address meter installations based on actual new
construction demand and lifecycle replacement requirements.
REPORT:
In 2013, the City of Cambridge issued a proposal for the Supply and Installation of Water
Meters and subsequently awarded to Neptune Technology Group (Canada) Limited, as
the vendor proposed the most favourable overall value. The City of Cambridge’s
specification stated that other municipal agencies may participate in the contract. As a
result, the City of Kitchener engaged in dialogue with Neptune Technology Group
(Canada) who provided the City of Kitchener with a proposal based on the City’s
requirements.
On March 23, 2015, Council awarded the supply and installation of water meters to
Neptune Technology Group (Canada) Limited for an annual value of $733,121, plus HST
of $95,305.73 for a total annual spend of $828,426.73 with an option to renew for two (2)
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additional twelve (12) month periods with the initial term being March 2015 to May 27,
2016. The contract anticipated 1380 contractor meter replacements annually. Typically,
the associated staff report would reference a projected annual spend and indicate that the
actual cost would vary based on the actual number of units actually required to be
installed. This language was inadvertently omitted from the staff report. To ensure
transparency and compliance with the City’s purchasing policy, staff are providing this
information report to address the omission.
There are annual variations in the contract due to the number of new water meters
installed (development based) and replacement water meters installed (for those
reaching end of lifecycle). The following is a summary of the actual and expected
activity levels:
Year ending May 2016: The work program did not meet the annual target due to
mobilization of the contract and the suspension of water meter installations at the
time of the SAP conversion. Annual spend to the end of May 2016: $ 539,000
Year ending May 2017: The work program included the backlog from the year
ending May 2016, as well as the current year target. In addition, meters required
for new development were substantially higher than anticipated. Projected
annual spend to the end of May 2017: $ 1,200,000
Year ending May 2018: It is anticipated that meters required for new
development will continue to exceed original projections along with increased
replacement requirements for meters at the end of lifecycle. Projected annual
spend to the end of May 2018: $. 1,200,000
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.
FINANCIAL IMPLICATIONS:
As outlined above. The current capital budget is sufficient to provide for the anticipated
meter requirements.
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: Cynthia Fletcher, Interim Executive Director, Infrastructure
Services Department
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