March 8, 1999

To:Works & Utilities Committee

From:Commissioner of Works & Emergency Services

Subject:Additional Expenditures for Extra Work

On Capital projects Currently in Progress

Purpose:

To obtain Council authority to negotiate and authorize additional expenditures for the performance of necessary additional work on various contracts within the Water and Wastewater Services Division as outlined in this report.

Funding Sources:

Funds are available in the approved 1999-2003 Water and Wastewater Services Division Capital Accounts for each contract outlined in this report.

Recommendations:

It is recommended that:

(1)additional expenditures in the amount of $307,141.80 including Goods and Services Tax be authorized for the performance of necessary additional work on Water and Wastewater contracts, as described herein and in accordance with the estimates listed in Appendix B attached; and

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

Background:

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meeting of January 6, 1998 City of Toronto Council enacted By-law No. 7-1998, Interim Financial Control By-law, which repealed former Metro By-law No. 146-90.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 the contracts identified herein, however, no such general contingency was added, as we believed it was still available through former Metro By-law No. 146-90.

At the time of award and/or contract tendering, 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 ten percent of the awarded contract amount for each of the contracts identified herein would have been available for required extra work on each contract.

Comments and Justification:

Shown in Appendix A is a listing of contracts requiring the performance and/or payment of approved extra work. In all of the contracts, additional information and unexpected circumstances have arisen during construction, which have necessitated changes to the original tendered scope of work. To ensure continuity with respect to liability and warranty issues under the contracts, these changes must be implemented by the issuance of extra work orders. In some of the contracts, 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.

Appendix B identifies as of March 1, 1999, the extra work necessary to be performed for each of the contracts described in Appendix A along with their corresponding costs.

The total value of the extra work required as a percentage of the overall value of the contracts is equivalent to 0.57%.

Conclusion:

The additional expenditures required for extra work in the amount of $307,141.80 including GST applicable to various contracts are summarized in Appendix B attached. This additional work is necessary to either meet regulatory code requirements and/or ensure construction of the best possible product.

Contact Names and Telephone Numbers:

Pagnanelli, P.Eng.A.F. Piccolo, P.Eng.

Manager, Plant & Facility ConstructionSenior Project Engineer

Engineering Services-Works Facilities & StructuresEngineering Services-Works Facilities & Structures

Technical Services DivisionTechnical Services Division

Telephone No. (416) 392-8245Telephone No. 392-8853

T.G. Denes, P.Eng.B.H. Gutteridge

Executive DirectorCommissioner of Works and Emergency Services

Technical Services

APPENDIX A

WATER AND WASTEWATER SERVICES DIVISION

CAPITAL CONTRACTS REQUIRING THE PERFORMANCE

AND/OR PAYMENT OF APPROVED EXTRA WORK

EPS : Environment and Public Space Committee

WU : Works and Utilities Committee

APPENDIX B

Request for Authorization of Additional Expenditures

For Extra work on Water and Wastewater

Contracts Identified in Appendix A APPENDIX B (Cont'd.)

Request for Authorization of Additional Expenditures

For Extra work on Water and Wastewater

Contracts Identified in Appendix A