Construction of Anaerobic Digestion Tanks

Nos. 19 to 22 at the Main Treatment Plant -

Additional Expenditures for Extra Work -

Contract No. WPC-6-97

The Works and Utilities Committee recommends the adoption of the following report (September 30, 1998) from the Commissioner of Works and Emergency Services:

Purpose:

To obtain Council authority to negotiate and authorize additional expenditures for the performance of necessary additional work on Contract No. WPC-6-97 for the construction of anaerobic digestion tanks Nos. 19 to 22 at the Main Treatment Plant.

Funding Sources:

Funds are available in the approved 1998-2002 Water and Wastewater Services Division, Water Pollution Control Capital Account C-WP160, Main Treatment Plant.

Recommendations:

It is recommended that:

(1)additional expenditures in the amount of $1,078,836.93, including Goods and Services Tax, be authorized for the performance of necessary additional work on Contract No. WPC-6-97 for the construction of anaerobic digestion tanks Nos. 19 to 22 at the Main Treatment Plant in accordance with Appendix A attached; and

(2)the appropriate City officials be authorized to take the necessary action to give effect thereto.

Background:

By adoption of Clause No. 28 of Report No. 12 of The Environment and Public Space Committee, the former Metro Council, at its meeting of September 24, 1997, awarded Contract No. WPC-6-97 for the construction of anaerobic digestion tanks Nos. 19 to 22 at the Main Treatment Plant. The contract was awarded to Granville Constructors Limited for the total lump sum tender price of $29,893,000.00 including GST and a Schedule of Prices allowance of $58,000.00 for additional work if required. The order to commence work was dated November 3, 1997, at which time the contract work began.

At the time of award, in accordance with former Metro By-law No. 146-90, as amended, a Department Head had authority to approve additional expenditures on a commitment in accordance with the By-law up to an amount equal to ten percent of the commitment. As such under the former Metro By-law, a further $2,989,300.00, or ten percent of the awarded contract amount, would have been available for required extra work.

At its meeting of January 6, 1998, City of Toronto Council enacted By-law No. 7-1998, Interim Financial Control By-law, which repealed former Metro By-law No. 146-90. As the new By-law contains no provision to exceed the awarded contract value, as confirmed by the City's Legal Division, the Department has effectively lost its ability to authorize the unforeseen and necessary additional work that may arise during construction of capital projects. This is particularly problematic given that the majority of capital construction performed by this Department is tendered on a firm, lump sum basis. For contracts recently tendered, since confirmation of the repeal of former Metro By-law No. 146-90, we have been providing, on an interim basis, a general contingency allowance for possible extra work into the Schedule of Prices for Alterations, Extras, and Deductions for incorporation into the total lump sum tender price. In the case of Contract No.WPC-6-97, however, no such general contingency was added, as we believed it was still available through former Metro By-law No.146-90.

We have been advised by the City's Finance Department that they will be forwarding a report sometime in the month of October 1998 recommending a reinstatement of authorities and responsibilities to Department Heads with respect to authorizing additional expenditures on City Council approved and authorized funding commitments.

Comments and Justification:

Since the commencement of Contract No. WPC-6-97, issues have been identified as necessitating the performance of extra work. In some cases, additional information and unexpected circumstances have arisen during construction which have necessitated changes to the original tendered scope of work. For example, unforeseen soil conditions encountered during construction have resulted in the handling and disposal of large buried concrete rubble. To ensure continuity with respect to liability and warranty issues under the contract, these changes must be implemented by the issuance of extra work orders. In other cases, staff of the Department and/or our consultants have identified changes to the design of the original contract which are now advisable to be performed to conform to changed regulatory code requirements or operating procedures, and which should be implemented to ensure construction of the best possible finished product. For instance, changes are proposed to the raw sludge distribution valving and control systems to be constructed in existing anaerobic digestion tanks Nos. 5 to 12. The changes to instrumentation and control of these 30 to 40-year old digesters are required to provide intrinsically safe process operation to ensure conformance with the digester gas code and the safety of operating and maintenance personnel. These changes will also assist in accommodating recent Main Treatment Plant staff reductions. Again, for the same aforementioned reasons of liabilities and warranty issues, these changes are required to be performed under the contract by the issuance of extra work orders.

The additional expenditures required for extra work in the amount of $1,078,836.93 including GST on Contract No. WPC-6-97 are summarized in Appendix A attached.

Contact Name:

Mr. P.A. Bradley, P.Eng.

Senior Project Engineer, Technical Services Division

Phone: (416) 392-8251.

APPENDIX "A"

Request for Authorization of Additional Expenditures

Contract No. WPC-6-97 - Construction of

Anaerobic Digestion Tanks Nos. 19-22 at the Main Treatment Plant