HomeMy WebLinkAboutFIN-2022-492 - Fergus Avenue Reconstruction Purchase Order Extension
Development Services Department www.kitchener.ca
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: December 12, 2022
SUBMITTED BY: Steve Allen, Manager, Engineering Design and Approvals,
519-741-2200 ext 7584
PREPARED BY: Steve Allen, Manager, Engineering Design and Approvals,
519-741-2200 ext 7584
Chris Spere, Manager, Construction Engineering,
519-741-2200 ext. 7412
WARD(S) INVOLVED: 2
DATE OF REPORT: December 2, 2022
REPORT NO.: FIN-2022-492
SUBJECT: Fergus Avenue Reconstruction Purchase Order Extension
RECOMMENDATION:
That the Purchase Order for T21-092 Fergus Avenue (Weber Street East to Thaler
Avenue) Clover Place Reconstruction, issued to Steed and Evans Limited, St. Jacobs,
Ontario be increased in the amount of $90,000 funded by an existing surplus in the
project account.
REPORT HIGHLIGHTS:
The purpose of this report is to increase the purchase order to account for higher
than anticipated costs during construction.
There is sufficient surplus in the project account to fund the PO increase.
This report supports the delivery of core services.
BACKGROUND:
The reconstruction of Fergus Avenue is identified as a priority infrastructure replacement
project within the Water Infrastructure Program (WIP). The purpose of the project is to
replace aging underground infrastructure and rebuild all surface features including curb,
sidewalks and asphalt roadway. Funding for the completion of the construction phase of
the project was approved by Council as part of the 2021 Budget.
Work for the Fergus Avenue reconstruction was publicly tendered by the city in June 2021
and was awarded in July of 2021 at a cost of $4,241,989.50 including taxes. Work started
in August of 2021. Due to the size of the project, it was tendered as a 2-year project to be
completed in 2021 and 2022. The construction of Fergus Avenue Reconstruction is now
essentially complete
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REPORT:
The reconstruction tender was awarded July 2021 and construction was completed over two
construction seasons (2021 and 2022). A number of unforeseen circumstances such as a
utility conflicts, greater quantity of impacted soils than anticipated, and asphalt price indexing
have resulted in additional costs and a requirement to increase the purchase order.
On September 9, 2022, the purchase order was increased by 10% ($375,397.30), the
maximum allowable amount under the past Purchasing By-law, Item 170.7.6. This increase
covered the items as detailed above however additional funds are required to close the
project out.
A number of the out-of-scope changes required using current material and labour pricing
rather than unit pricing from the original contract. Material and labour costs have risen
sharply over the last 12-18 months from when the contract was executed in 2021.
Additionally, the contract includes price indexing provisions for asphalt cement which is a
standard provision. As the price of asphalt has increased significantly between the time of
bids being submitted (July 2021) and the placement of the asphalt, the city is obligated to
compensate the contractor for this price increase as per the terms of the executed
agreement.
STRATEGIC PLAN ALIGNMENT:
This report supports the delivery of core services.
FINANCIAL IMPLICATIONS:
Capital Budget The recommendation has no impact on the Capital Budget. Sufficient
surplus funding exists in the project account.
COMMUNITY ENGAGEMENT:
INFORM
the council / committee meeting.
PREVIOUS REPORTS/AUTHORITIES:
There are no previous reports/authorities related to this matter
APPROVED BY: Justin Readman, General Manager, Development Services