May 26, 1998
To:The Urban Environment and Development Committee
From:Interim Functional Lead, Transportation
Subject:Extension of Contract No. T-27-96;
Maintenance of Traffic Control and Related Devices
Purpose:
To extend by one year the contract for the maintenance of traffic control and related devices - Contract No. T-27-96.
Funding Sources:
The funds for the activities included within this contract will be contained in the Works and Emergency Services Current
Budget estimates for 1999.
Recommendations:
It is recommended that Contract No. T-27-96 with Stacey Electric Company Limited be extended from January 1, 1999 to
December 31, 1999, under the terms and conditions of the original contract, by exercising the AOption of Extension@
clause (Part C, Section 15).
Background:
Contract No. T-27-96 encompasses the maintenance of all traffic control signals within the boundary of the new City of
Toronto; and all pedestrian crossovers and illuminated signs on major arterials which were formally Metro roads. It also
includes sign installation and a small element of pavement markings on major arterials.
Contract No. T-27-96 was issued as a two-year contract from January 1, 1997 to December 31, 1998, with two one-year
extensions: 1999 and 2000. Each extension requires the approval of Toronto City Council.
Discussion:
Considerable staff time and effort was spent in 1995 and early 1996 to research and re-write our municipal traffic plant
maintenance tender. The three principal objectives were as follows:
(1)to provide greater accessibility for contractors by reducing the barriers to bidding, through the size, scope and duration
of the contract;
(2)to provide incentives for contractors to deliver their services at a lower cost to the municipality;
(3)to provide a contract structure which is manageable and contract services which are efficiently co-ordinated.
The result was a brand new tender which fundamentally changed the structure and administration of the historical traffic
plant maintenance contract.
One of the primary innovations was the change from a Atime and materials@ base to a Aset price@ performance base.
The new contract provides a fixed fee per intersection to the contractor to maintain the traffic control signals, rather than
paying for each visit to the site. Therefore there is an incentive for the work to be of high quality and performed as
efficiently as possible, to avoid repeated site visits by the contractor.
In order to provide for the opportunity for smaller contractors to compete, the tender was organized into three districts,
which lowered the financial obligation required and the potential investment in equipment and vehicles. In order to fully
realize the benefits of their investment, it was understood that the contract should be three or four years long. However,
because of fundamental changes to the previous contract, it seemed prudent to provide both the City and the contractor with
an option to terminate the contract after two years if it was not working. The expectation amongst staff and contractors was
that the AOption of Extension@ would be exercised by both parties if the quality of work was good, if the anticipated
savings materialized, and if the savings could be sustained by extending the contract.
The significant effort applied to rewrite the tender has provided the benefits which staff had hoped for. Not only is the
quality of work being performed as prescribed in the contract, the cost of electrical maintenance in 1997 was 13% less than
in 1996, a saving of over $600,000.00.
When Contract No. T-27-96 was awarded in 1996, bids were received from three contractors and the contract was awarded
to the lowest bidder, Stacey Electric Company Limited. The annual total bid prices submitted were as follows:
Stacey Electric$4,033,072
Guild Electric$4,514,406
Cliffside$12,692,272
Stacey Electric Company Limited have agreed to an extension of the contract with no increases to the current bid prices,
and under the terms of the existing contract. Therefore staff recommend that Contract No. T-27-96 with Stacey Electric
Company Limited be extended from January 1, 1999 to December 31, 1999.
The one-year extension lends itself to the on-going amalgamation process. The current contract is based on three districts,
but, as a result of amalgamation, the number and area of each district will be different. Secondly, maintenance of traffic
plant under the jurisdiction of the former municipalities is currently delivered through a combination of in-house and
contracted out service arrangements. Therefore, a consolidated service delivery plan will be developed in 1998 and a tender
re-write will be undertaken early in 1999 to prepare for the new service delivery requirements in the year 2000.
Conclusions:
Contract No. T-27-96 was written in order to achieve cost savings in the area of maintenance of traffic control devices,
while maintaining the quality of maintenance work. These benefits have been experienced with the current electrical
contractor, Stacey Electric Company Limited, and staff recommend that the contract be extended by one year according to
the provisions of the contract.
Contact Name:
Peter K. Hillier, Senior Manager
Traffic Regions
416-392-5348
D.P. Floyd
Interim Functional Lead, Transportation
Reviewed by Barry Gutteridge
Commissioner, Works and Emergency Services
PKH/jr
