TIRM Disposal Request for Proposals -

Submission by Ref-Fuel Canada Ltd.

The Works Committee recommends that the proposal submission by Ref-Fuel Canada Ltd. be excluded from any further consideration in the Toronto Integrated Solid Waste Resource Management (TIRM) Disposal Request for Proposals process.

The Works Committee submits the following joint report (January 11, 2000) from the Commissioner of Works and Emergency Services and the City Solicitor:

Purpose:

The purpose of this report is to report to the Works Committee, as requested at its special meeting of January 10, 2000, on the issue of the formality of the submission made by Ref-Fuel Canada Ltd.

Financial Implications and Impact Statement:

There are no financial implications by this report.

Recommendation:

It is recommended that this report be received for information.

Background:

The Works Committee, at its special meeting on January 10, 2000, heard presentations from each of the qualified respondents to the Toronto Integrated Solid Waste Resource Management Process ("TIRM") Solid Waste Disposal Request for Proposals ("RFP"). The Committee was advised by the Commissioner of Works and Emergency Services that one of the respondents, Ref-Fuel Canada Ltd. ("Ref-Fuel"), had failed to provide the required agreement to provide a letter a credit and was considered to be informal. The respondent requested the Committee to direct staff to request clarification of the omission and that it be permitted to proceed in the process. The Committee requested a report at its meeting on January 12, 2000, on the omission.

Comments:

(1) The RFP Requirements and Ref-Fuel's Omission:

Section 2 of Part B of the RFP sets out the specific conditions, declarations, requirements, securities and agreements that were to be provided by a respondent and included as part of its Technical Proposal (Envelope One). In particular, the RFP provides for certain operations performance securities that were to be included as part of Envelope One. Section 2.6 of the RFP states, in part, as follows:

"Toronto requires evidence that the successful Respondent will provide a Performance Bond and an Irrevocable Letter of Credit securing the obligations of the Contractor to ensure the proper management of the Contractor's solid waste management facilities."

The section then goes on to indicate the requirement that the Letter of Credit must be in the amount of thirty percent (30%) of the estimated annual value of the contract and then states as follows:

"The Respondent shall submit an agreement from a Canadian Chartered Bank listed in Schedule "A" or "B" to the Bank Act (Canada) to provide an irrevocable letter of credit. Form A-6 provides a sample of an agreement."

Ref-Fuel provided a letter, dated December 14, 1999, from the Chase Bank of Texas, signed by a senior vice president of corporate banking. The letter is neither from a Schedule "A" or "B" bank nor is it an agreement to provide a letter of credit. The letter states, in part, as follows:

"American Ref-Fuel has been a customer of Chase Texas for several years and Chase Bank of Texas will be pleased to give due consideration to a request for a letter of credit from American Ref-Fuel once a credit request is received. Credit approval for such a request would need to be obtained. This letter is not a commitment to issue the referenced letter of credit."

The City has a discretion to waive irregularities as set out in section 4.2.6 of the RFP and as acknowledged in the Declaration of Proposal Submission signed by each respondent. It is staff's position, however, that in the context of this RFP, a mandatory requirement has not been met and there should be no waiver of the requirement.

Contacts:

Lawson Oates

Manager, Strategic Planning

Solid Waste Management Services

Tel: 392-9744; Fax: 392-4754

lawson_oates@toronto.ca

James Anderson

Director, Municipal Law

Tel: 392-8059; Fax: 397-5624

jandersl@toronto.ca

_________

The Works Committee reports, for the information of Council, having also had before it during consideration of the foregoing matter the following:

(1) confidential report (January 11, 2000) from the City Solicitor, a copy of which has been forwarded to all Members of Council under "confidential" cover, respecting the formality of the submission by Ref-Fuel Canada Ltd.; and

(2) communication (January 12, 2000) from Mr. Dave Gutacker, Chief Operating Officer, American Ref-Fuel Company, respecting the response of Ref-Fuel Canada Ltd. to the Solid Waste Disposal RFP; and the interpretation of the financial assurance letter that was submitted in Ref-Fuel's proposal.

Mr. Derek Veenhof, Business Manager, Ref-Fuel Canada Ltd., appeared before the Works Committee in connection with the foregoing matter.