Item - 2021.IE21.2

The Infrastructure and Environment Committee:

1. In accordance with Section 195-8.4A of Toronto Municipal Code Chapter 195 (Purchasing), authorized the General Manager, Toronto Water to negotiate and enter into agreements with Fer-Pal Construction Ltd. having submitted the highest scoring compliant Proposal and having met the specifications in conformance with the Negotiable Request for Proposals Doc2795975900 requirements, in the amount of $63,565,193 net of all taxes, including 10 percent contingency ($64,683,941 net of Harmonized Sales Tax recoveries, including contingency), all in accordance with the terms and conditions as set out in the Negotiable Request for Proposals and any other terms and conditions satisfactory to the General Manager, Toronto Water and in a form satisfactory to the City Solicitor.

The purpose of this report is to advise on the results of Negotiable Request for Proposals Doc2795975900, Contract Number 21TW-CTS-02CWD for the Trenchless Rehabilitation of Watermains (Cured-In-Place-Pipe Structural Lining) at various locations across the City of Toronto in 2021, 2022 and 2023, and to request the authority to award the Negotiable Request for Proposals to Fer-Pal Construction Ltd (Fer-Pal) in the amount of $63,565,193 net of all taxes, including 10 percent contingency plus an annual escalation adjustment of three (3) percent in Phase 2 and Phase 3 (2022 and 2023) of the contract to account for commodity and labour price adjustments specified in the Negotiable Request for Proposals ($64,683,941 net of Harmonized Sales Tax recoveries, $71,828,688 including Harmonized Sales Tax).

This Negotiable Request for Proposals is the first strategic sourcing initiative for Cured-In-Place-Pipe lining of watermains under the Purchasing and Materials Management Division's Category Management and Strategic Sourcing. Strategic Sourcing is a collaborative effort between various City Divisions and Purchasing and Materials Management Division to plan and execute sourcing strategies based on analysis of the supplier market, industry constraints, market data, and volume/type of work. Negotiation with potential contractors, consolidation of spend, creating efficiencies within the procurement lifecycle, and collaboration with the supplier community are all hallmarks of effective strategic sourcing.  Purchasing and Materials Management Division has been working with a number of other Divisions to conduct strategic sourcing initiatives since 2019.

As a result of this Watermain Cured-In-Place-Pipe lining strategic sourcing initiative, the City successfully secured a contract for $3,942,353 (net of Harmonized Sales Tax and contingencies) or 6.4 percent below the pre-solicitation engineering estimate. This represents an average annual cost savings of $1,314,117 (net of Harmonized Sales Tax and contingencies).