A project that was tendered and cancelled twice in 2018 may be awarded to the only company to have applied for it both times.
At the Whitehorse city council standing committees meeting on Jan. 7, Geoff Quinsey, manager of water and waste services told council that the McIntyre Creek pumphouse needs an upgrade to “ensure sufficient domestic supply pressures and maintain fire flows for the Kulan, Porter Creek, and Whistle Bend neighbourhoods.”
A tender for the project, issued in May 2018, was cancelled after Duncan’s Ltd. was the only company to respond with a bid that was over budget. A second tender was issued in October. Again, Duncan’s was the only company to respond, this time with a bid that said the project couldn’t be completed within the city’s specified timeframe.
The tender was cancelled again. City staff then negotiated a sole-source contract agreement with Duncan’s, with a new price of $375,231, and a new completion date of July 31, 2019.
Because the contract fee exceeds the initial project budget of $207,258, Quinsey asked council to re-budget the 2018 capital project for the McIntyre Creek Booster Station; amend the 2019 capital budget from $207,258 to $450,000, funded by the water and sewer reserve; waive the public bidding process; and award the contract to Duncan’s.
Coun. Samson Hartland wanted to know if the project was something that had been identified in previous years. Quinsey said it was initially identified in 2015.
Quinsey told council that the difference in price between the estimated cost and the actual cost is the result of a number of factors. He said the cost for mechanical work has changed significantly since 2015. As well, he said it’s difficult to estimate cost before finalizing design, which is something staff were trying to do for this project.
“Without peeling back too many layers, for me, it sort of demonstrates how important an asset management plan or strategy would be,” said Hartland.
Hartland also raised the issue of an asset management plan at the Dec. 10 council meeting, during second and third reading of the 2019 to 2022 capital budget.
“I don’t know if this would help us identify this sooner and potential purveyors to do the work. We’re kind of a victim of the RFP process but, at the same time, a lot of time elapsed before (now) and what I’m reading is, you know, Whistle Bend built out sooner than expected, and we brought the continuing care facility online, and now we need more pressure, and so I struggle with how we find ourselves in this position right now.”
Coun. Jocelyn Curteanu wanted to know if the city had asked other local contractors why they didn’t apply for the job. Quinsey said that staff had, and one company said a lack of capacity meant they were unable to pursue the project.
Curteanu also asked about council’s authority to sole-source a contract. Quinsey told her council does have the authority to okay such a contract.
Hartland asked what it means that city staff have already started negotiating with Duncan’s.
“Are we essentially committed to this or does it depend on council vote?” he asked, noting Quinsey’s characterization of the contract as atypical. “Because I really get the impression that we don’t have much of a choice. I just wonder whether we’re actually locked into something that we most definitely couldn’t back out of. What were to happen if council were to reject this?”
Quinsey said it has been made clear to Duncan’s that there is, at this point, no guarantee of a project. City staff have spoken with the company to look at ways the project might move forward.
“We sought, from Duncan’s, feedback on how they could reduce the cost of the work and also expedite the work because both keeping the project closer to the prescribed budget and achieving that quicker completion date were stated objectives from the city,” he said.
“So we asked Duncan’s to bring forward ideas for how they could make the project more cost-effective, or more time-effective and so that would be how I would typify it as atypical. But no, we were abundantly clear to Duncan’s that this was not a contract-based situation when they sat down with us to negotiate.”
The issue will come forward at the Jan. 14 regular council meeting.
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