Whitehorse administration says it has learned some valuable lessons after the tendering process for an infrastructure upgrade went sideways last year.
The MacIntyre Creek pumphouse needs work to meet the needs of the growing Whistle Bend, Porter Creek and Kulan neighbourhoods.
City staff expected this upgrade, and identified it as necessary back in 2003. However, said Peter O’Blenes, manager of infrastructure and operations, increased demand came about sooner than expected.
At the regular council meeting on Jan. 14, council discussed the initial tender for the project, which was issued in May 2018. It was cancelled after the city received only one bid, from Duncan’s Ltd., that came in over the city’s $207,258 budget. A second tender was issued in October. Again, Duncan’s was the only company to respond, but said the timeframe specified by the city wasn’t feasible.
City staff then went on to negotiate a contract agreement with Duncan’s, with a new price tag of $375,231 and a new completion date.
The cost will be funded by the water and sewer reserve, which will then be reimbursed by gas tax dollars.
Coun. Jocelyn Curteanu said it concerned her that the only company to respond was given the opportunity to negotiate new timelines and costs with the city. If other companies had been looking at a similar timeline and a budget more in line with the actual costs of the work, she said, they may have bid on it.
Coun. Dan Boyd agreed. He said it’s a case of one company getting lucky. Had the tender initially been realistic, he said, there may have been more bidders.
“We seem to have missed this one by quite a bit and I’m not really comfortable with the cancelling of tenders and re-tendering and cancelling again and negotiating, not disclosing what the tender prices were, the tender we got, so we don’t know that information and been told we don’t get to know that information which I would be prepared to argue differently.” he said.
It’s a little unsettling and I’ve been scratching my head trying to figure out what could we do to avoid this situation in the future and is there any alternative other than what we have before here.”
Coun. Steve Roddick said it’s definitely “a pickle,” but he recognizes that city staff are trying to balance various public interests, including having a transparent process, finding value for money, and completing the project in a timely manner.
He said city staff’s recommendation to proceed with a contract with Duncan’s might be the best way forward, but he would like to city staff do better in order to avoid a similar sole-sourcing issue in the future.
City manager Linda Rapp said city staff have been asking those questions and looking at whether the problem is isolated, a larger part of the city process that needs fixing, or, given the fact that a number of projects are getting few bids, whether the city is being too conservative in price estimates.
O’Blenes said that, in the last two years, as Whistle Bend was further developed and the continuing-care facility came online, a second line was put into the water system, and the upgrade was needed early (he said this upgrade will be able to support future expansion in Whistle Bend, Porter Creek and Kulan).
He said the city needs to better understand the ramifications of new infrastructure, and begin earlier negotiations with partners on cost. In the case of the pumphouse upgrades, he said, rising steel tariffs and an increasingly busy market for mechanical contractors impacted the increased cost.
Cabott said she wants to hear more than just that the city has learned lessons — she wants staff to come back to council and explain what happened and how staff expect to avoid those issues in the future.
Contact Amy Kenny at amy.kenny@yukon-news.com