Item - 2023.GG6.16

The General Government Committee recommend that:

1. City Council grant authority to the General Manager, Fleet Services Division to extend the term of the non-competitive Blanket Contract number 47022700 by entering into an amending agreement with Toromont Industries Ltd. for the supply and delivery of proprietary original equipment manufacturer parts and specialized services for Caterpillar equipment repair, warranty and non-warranty repair and maintenance, which includes the implementation of a telematics solution that will support these services through remote monitoring and proactive scheduling, based on the following conditions:

a. the initial term of this extension will be for a period of one (1)-year, commencing on November 1, 2024 to October 31, 2025 with the option to renew the contract for four (4) additional one (1)-year periods, subject to the exercise of each option year being at the sole discretion of the General Manager, Fleet Services Division and subject to the amounts payable under the contract being available under the current Fleet Services Division budget approval(s). This extension will revise the current maximum term duration from five (5) years to ten (10) years, where all optional extension years are exhausted;

b. the value of this extension, inclusive of an increase to the final year of the previous term and all additional option years for this extension, is $3,072,164 net of all taxes and charges ($3,126,234 net of Harmonized Sales Tax recoveries);

c. the agreement will be based on the condition that Toromont Industries Ltd. continues to be the exclusive distributor for the proprietary original equipment manufacturer parts and specialized services for Caterpillar equipment; and

d. on other terms and conditions satisfactory to the General Manager, Fleet Services, and in a form satisfactory to the City Solicitor.

The purpose of this report is to request authority from the General Government Committee to amend non-competitive Blanket Contract number 47022700 with Toromont Industries Ltd., for the supply and delivery of proprietary Original Equipment Manufacturer parts and specialized services for Caterpillar equipment warranty and non-warranty repair and maintenance, to extend the term by five (5) separate one (1)- year periods, and to increase the Blanket Contract value by $3,072,164 net of all taxes and charges ($3,126,234 net of Harmonized Sales Tax recoveries).

The term extension will revise the term of the contract from five (5) years to ten (10) years, where all current optional extension years are exhausted after the fifth year of the contract. The parts and specialized services cannot be obtained through the competitive procurement process as Toromont Industries Ltd. is the only authorized dealer in the Greater Toronto Area, and this has been confirmed by the equipment manufacturer Caterpillar Inc.

This equipment is critical to providing public service by supporting transfer station and haulage operations for Solid Waste Management and maintaining water infrastructure for Toronto Water Operations. Access to original equipment manufacturer parts and warranty or non-warranty services is critical to ensure that units are safe, reliable, and available when required.

City Council approval is required in accordance with Municipal Code Chapter 195- Purchasing, where the current request exceeds the Chief Procurement Officer's authority of the cumulative five (5) year commitment for each vendor, under Article 7, Section 195-7.3 (D) of the Purchasing By-Law or exceeds the threshold of $500,000 net of Harmonized Sales Tax allowed under staff authority as per the Toronto Municipal Code, Chapter 71-Financial Control, Section 71-11.1.