HomeMy WebLinkAboutFIN-2022-110 - Q22-027 Gas Pipeline Construction
Infrastructure Services Department www.kitchener.ca
REPORT TO: Committee of the Whole
DATE OF MEETING: March 21, 2022
SUBMITTED BY: Ryan Scott, Manager, Procurement, 519-741-2200 ext. 7214
PREPARED BY: Brad Kowaleski, Procurement Specialist, 519-741-2200 ext. 7063
WARD(S) INVOLVED: N/A
DATE OF REPORT: March 11, 2022
REPORT NO.: FIN-2022-110
SUBJECT: Q22-027 Gas Pipeline Construction
RECOMMENDATION:
That Quote Q22-027 Gas Pipeline Construction, be awarded to NPL Canada Limited,
Vaughn, Ontario, at their quoted price of $5,599,817, plus H.S.T. of $836,754.30, for a total
of $6,436,571.77 for the first year of a three (3) year contract, with the option to renew for
one (1) additional two (2) year period.
REPORT HIGHLIGHTS:
The purpose of this report is to obtain approval to proceed with an award as per
Purchasing By-law 2017-106;
There were three (3) submissions received for this procurement;
This report supports the delivery of core services.
BACKGROUND:
The Gas Pipeline Construction Contract addresses the need for several types of projects:
Ώ To install underground gas mains and services to service new customers. This work is
needed to ensure that the City of Kitchener homeowners and business owners all have
equal and safe access to natural gas, if they require it.
Ώ To replace existing piping in locations that conflict with underground infrastructure
proposed by others. This work is needed to comply with regulatory requirements for
utilities to relocate existing infrastructure if requested by the road authority.
Ώ To replace aging or failing existing piping. This work is needed to maintain the safety and
reliability of natural gas supply to existing customers.
The Contractor will maintain the roles and responsibilities as the Constructor for the various gas
pipeline installation and replacement projects for the life of this contract. Staff have purposefully
bundled multiple projects under this single contract to align the City with a partner for an
extended period of time, obtain value for money through better pricing, and streamline
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administrative work. This puts staff in the best possible position to be able to provide quality
customer service to existing customers, shortertimelines to service new customers and address
location conflicts.
The actual spend will depend on the level of activity throughout the term of the contract.
REPORT:
As per clause 170.7.1 of the Purchasing By-law 2017-106, the Director of Supply Services shall
submit a report to Council recommending award of a purchase greater than $750,000.
Submissions were advertised publicly on the City of Kitchener website. Documents were
downloaded by nine (9) interested parties and by the closing date of Thursday February 24,
2022, three (3) quotes had been received.
The following quotes were received:
Bid Price
NPL Canada Ltd. Vaughn, ON $6,436,571,77 *
Aecon Utilities Toronto, ON $7,998,627.20
Clearway Utilities Inc. Maple, ON $8,341,731,79
The quotes were reviewed by S. Eastman, Utilities Engineer, who concurs with the above
recommendation.
The price for gas pipeline construction has decreased 7% from the 2017 contract.
The prices shown reflect the anticipated spend for year one (1), of the initial three (3) year
contract. Anticipated spend in following years is dependent upon the construction schedule
developed by Utilities.
Annual unit price adjustments shall be automatic, based on the annual inflation figure of the
Ontario Consumer Price Index from the preceding year and renewal subject to mutual
agreement.
STRATEGIC PLAN ALIGNMENT:
This report supports the delivery of core services.
FINANCIAL IMPLICATIONS:
The net cost for this quote (A), is fair and reasonable for a project of this scope and the upset
limit is within the funding available (B) for this project. Funding for this project is included within
the approved capital budget. The estimated surplus (E) will remain in the account to fund similar
work conducted by the City. Yearly budgeting for this program is static, however the work
performed fluctuates depending upon growth and redevelopment projects that are outside of
City control.
Q22-027
Gas Pipeline Construction
Estimated Cost
Quote Q22-027 costs, including HST 6,436,571.77
less: HST rebate (740,490.56)
Net Cost Being Awarded 5,696,081.21 A
Projected Costs:
Staff Time 1,018,000.00
Supplies and Materials 849,000.00
Other internal costs 101,000.00
Total Estimated Cost for this Phase of Work 7,664,081.21 C
Funding Available
Budget 2022 - Gas Pipelines 8,589,000.00
Budget 2022 - Gas Capacity Projects 1,050,000.00
Total Budget for this Phase of Work 9,639,000.00 B
Estimated Surplus/(Deficit) for this Phase of Work (B - C) 1,974,918.79 D
Balance in Account, net of encumbrances (523,643.71)
Total Estimated Surplus/(Deficit) 1,451,275.08 E
COMMUNITY ENGAGEMENT:
INFORM
council / committee meeting.
PREVIOUS REPORTS/AUTHORITIES:
There are no previous reports/authorities related to this matter.
APPROVED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services
Department