Purchase of Bulk Common Course Rock Salt (Road Salt)

The Works and Utilities Committee recommends the adoption of the joint report dated August25, 1998, from the Chief Financial Officer and Treasurer and the Commissioner of Works and Emergency Services.

The Works and Utilities Committee reports, for the information of Council, having requested the Chief Financial Officer and Treasurer and the Commissioner of Works and Emergency Services to submit a joint report to the Strategic Policies and Priorities Committee on a policy for including in such reports the following information:

(1)comparable costs for the two previous years; and

(2)a sampling of five-year pricing in other municipalities surrounding the Greater Toronto Area and the Cities of London and Ottawa.

The Works and Utilities Committee submits the following joint report (August 25, 1998) from the Chief Financial Officer and Treasurer and the Commissioner of Works and Emergency Services:

Purpose:

The purpose of this report is to advise the Committee of the results of the tender issued for the supply and delivery of bulk common coarse rock salt, used for de-icing road surfaces for the 1998-99 winter season, and to request authority to award a contract to the recommended bidders.

Source of Funds:

Funds are available in the appropriate accounts for this project.

Recommendations:

It is recommended that:

(1)the tenders as noted below for the supply and delivery of approximately 130,866 tonnes of bulk common coarse rock salt, used for de-icing road surfaces for the 1998-99 winter season, in accordance with specifications, be accepted, being the lowest tenders received:

(a)Sifto Canada Limited for approximately 25,633 tonnes for the Etobicoke District in the amount of $1,248,254.28 including Goods and Services Tax, Ontario Retail Sales Tax and all other charges; and

(b)The Canadian Salt Company Limited for approximately 105,233 tonnes for the Toronto Core, North York/York, and Scarborough/East York Districts in the amount of $5,364,586.09 including Goods and Services Tax, Ontario Retail Sales Tax and all other charges; and

(2)the appropriate officials be authorized to complete the necessary contract documents.

Council Reference/Background History:

The Bid Committee, at its meeting held on July 29, 1998, opened the following tenders for the supply and delivery of bulk common coarse rock salt, used for de-icing road surfaces for the 1998-99 winter season.

Tender No. 77-1998:

Tenderers:

Price Per Tonne, Exclusive of all Taxes

Scarborough/

East YorkNorth York/EtobicokeToronto (Core)

DistrictYork DistrictDistrictDistrict

A - Stockpiling Shipments - (bulk deliveries to fill salt domes)

to be shipped between October 15, 1998 and November 21, 1998

The Canadian Salt Company$44.34$43.09$44.34$44.34

Limited

Sifto Canada IncorporatedNo bidNo bid$41.50No bid

Cargill Salt $46.58$46.58$46.58$46.58

B - Additional Shipments - ( for delivery as and when required)

to be shipped between November 22, 1998 and April 30, 1999

The Canadian Salt Company$45.09$43.84$45.09$45.09

Limited

Sifto Canada IncorporatedNo bidNo bid$42.50No bid

Cargill Salt$47.58$47.58$47.58$47.58

Above prices are subject to 8 percent Ontario Retail Sales Tax and 7 percent Goods and Services Tax.

One deterrent to bidding on this annual tender which has been identified by potential suppliers of this commodity is the large volume of the City of Toronto requirement. It was determined that by dividing the City into four districts, additional competition could result in lower prices. The dividing of the City into four districts resulted in an additional supplier being able to bid on one part of the requirement. The district boundaries were selected for the purpose of establishing a basis to obtain competitive bids for this commodity.

A comparison of the low price for each district against the pricing received last year is as follows:

A - Stockpiling Shipments

B - Additional Shipments

The low bid in the Etobicoke district from Sifto Canada Limited can be attributed to competition in the market price in that Sifto, who was unable to bid on previous tenders for the former City and Metro Toronto due to the large volume of the requirement, submitted the lowest priced bid. Sifto has advised that presently, they do not have the capacity to service more than one district and determined that they could only guarantee supply at this time to one district. They advise that they are expanding, and hope to bid on all districts next year.

The low bid for the other three districts is offered by the Canadian Salt Company Limited. In the North York/York District, the pricing is unchanged from 1997. The price increase in the Scarborough/East York and Toronto (Core) Districts is less than that experienced this year by the following municipalities: Burlington/Halton (9.8 percent), Cambridge/Kitchener (7.4 percent), Durham Region (4.2 percent) and York Region (4 percent). Further rationalization of yard operations in the Works and Emergency Services Department may allow for additional efficiencies in the delivery and pricing of this commodity being achieved in future years.

Comments and/or Discussion and/or Justification:

The Tender documentation submitted by the recommended bidders has been reviewed by the Commissioner of Works and Emergency Services and was found to be in conformance with the Tender requirements.

The Manager, Fair Wage and Labour Trades Office has reported favourably on the firms recommended.

Conclusion:

This report requests authority to award contracts and for the appropriate officials to complete the necessary contract documents for the supply and delivery of bulk common coarse rock salt, used for de-icing road surfaces for the 1998-99 winter season in accordance with specifications to the lowest bidders, Sifto Canada Incorporated to the Etobicoke District in the amount of $1,248,254.28 including Goods and Services Tax and Ontario Retail Sales Tax, and The Canadian Salt Company Limited to the Scarborough/East York, North York/York, and Toronto (Core) Districts in the amount of $5,364,586.09 including Goods and Services Tax and Ontario Retail Sales Tax.

Contact Name:

L.A. Pagano, Director, Purchasing and Materials Management

Phone: 392-7312

B. Mason, Manager, West District, Transportation Services

Phone: 392-5640.