Item - 2022.IE30.4

The Infrastructure and Environment Committee:

1. In accordance with Section 195-8.4A of Toronto Municipal Code Chapter 195 (Purchasing), authorized the Chief Engineer and Executive Director, Engineering and Construction Services to negotiate and enter into agreements under terms and conditions satisfactory to the Chief Engineer and Executive Director, Engineering and Construction Services and in a form satisfactory to the City Solicitor with:

a. 2489960 Ontario Incorporated, for Service Area A, in the amount of $47,975,420.02 net of all taxes and charges ($54,212,224.62 including Harmonized Sales Tax, $48,819,787.41 net of Harmonized Sales Tax recoveries) inclusive of contingencies and price escalations; and

b. 2489960 Ontario Incorporated, for Service Area B, in the amount of $43,044,116.88 net of all taxes and charges ($48,639,852.08 including , $43,801,693.34 net of Harmonized Sales Tax recoveries) inclusive of contingencies and price escalations; where 2489960 Ontario Incorporated submitted the highest scoring compliant proposal and met the specifications in conformance with the Negotiated Request for Proposal Document Number 3166773834; where,

2489960 Ontario Incorporated submitted the highest scoring compliant proposal and met the specifications in conformance with the Negotiated Request for Proposal Document Number 3166773834.

The purpose of this report is to advise of the results of the Negotiable Request for Proposal Document 3166773834 for the construction of watermains at various locations across the City in 2022, 2023 and 2024 and to request the authority to award two (2) separate contracts:

a.  Service Area A (Scarborough, East York and North York Districts), to 2489960 Ontario Incorporated in the amount of $48,819,787.41 net of Harmonized Sales Tax recoveries ($54,212,224.62 including all taxes and charges, $47,975,420.02 net of Harmonized Sales Tax); and

b.  Service Area B (Etobicoke and North York Districts), to 2489960 Ontario Incorporated, in the amount of $43,801,693.34 net of Harmonized Sales Tax recoveries ($48,639,852.08 including all taxes and charges, $43,044,116.88 net of Harmonized Sales Tax).

This is the third strategic sourcing initiative in watermain construction through the Purchasing and Materials Management Division's Category Management and Strategic Sourcing Team. Strategic sourcing is part of the City's category management approach to procurement. It relies on analyzing information about the supplier market, anticipated volumes and dollar value of purchases. Negotiations with suppliers and assessments of supply transactions are hallmarks of effective strategic sourcing.

As a result of this strategic sourcing approach, the contract pricing after negotiations represents a reduction of 9.1 percent and 10.6 percent for Service Area A and Service Area B, respectively, compared to the pre-solicitation engineering estimates.