Forfeiture of Tender Deposit
The Works and Utilities Committee recommends the adoption of the following report (May 14, 1998) from the
Interim Functional Lead for Water and Wastewater:
Purpose:
To provide full and final authority to the City of Toronto - Scarborough District, Works and Emergency Services
Department staff representative to settle this case, if so advised by the City Solicitor, which is being referred to the
Alternative Dispute Resolution Centre for a mediation session on June 25, 1998, at 2:00 p.m. between Cambridge
Landscaping Inc. v. Scarborough.
Funding Sources, Financial Implications and Impact Statement:
Cambridge Landscaping Inc. is taking legal action against the City for repayment of their forfeiture of tender deposit in the
amount of $62,597.00.
Subsequent to the award of Contract No. 2941 (Highland Creek Rehabilitation Project) to Cambridge Landscaping Inc.,
Scarborough Council directed that the tender deposit be forfeited as a result of the contractor=s inability to obtain a 100
percent performance bond for this project.
Recommendations:
It is recommended that:
(1)the City of Toronto Council reconfirm the decision that Cambridge Landscaping Inc. forfeit the $62,597.00 tender
deposit as a result of their inability to fulfill the terms of the contract, which recommendation was embodied in Report No.
13 of the Administrative Committee as adopted by Scarborough Council on June 24, 1997; and
(2)an appropriate staff representative from the Works and Emergency Services Department be directed to attend the
Alternative Dispute Resolution Centre on June 25, 1998, at 2:00 p.m., and have full and final authority to settle the dispute,
if so advised by the City Solicitor.
Council Reference/Background/History:
City of Scarborough Council awarded Contract No. 2941, Proposed Rehabilitation of Highland Creek (Markham Branch)
from Highway 401 south to Markham Road, to Cambridge Landscaping Inc., the low bidder, at their submitted unit prices
totalling $1,251,922.26 based on estimated quantities.
Cambridge Landscaping Inc. indicated that they were denied the 100 percent Performance Bond required for them to
proceed with construction and were therefore unable to fulfill the terms of the contract.
Scarborough Council then directed staff to withdraw the award of Contract No. 2941 from Cambridge Landscaping Inc.,
and that the tender deposit of $62,597.00 be forfeited. Subsequently, the award of this contract was made to the second low
bidder, Ron Robinson Limited, at their submitted unit prices totalling $1,910,007.09 based on estimated quantities.
The difference in total unit prices resulted in the City of Scarborough spending an additional $658,084.83 to construct this
project. Further, the delay in construction start dates prevented completion of hydro seeding along the majority of exposed
slopes prior to winter 1997/98, resulting in erosion and additional cost to the contract.
Comments and/or Discussion and/or Justification:
The contract requires that the contractor submit with the tender and contract, a tender deposit by way of certified cheque in
the amount of five percent of the estimated tender price, or $150,000.00, whichever is less. The City will award the contract
within thirty days from the date bids are opened, unless otherwise specified in the tender. Between the time period tenders
are opened and the contract award is made, tenders cannot be withdrawn. If the contractor requests that the tender be
withdrawn between this time period, or if upon being awarded the contract the contractor does not proceed to commence
work within ten working days of formal notification to commence, the tender deposit is forfeited to the City as damages
and not as a penalty.
Conclusions:
The tender document clearly outlines the instructions to bidders in submitting prices for City contracts. This policy is in
place to ensure that the tender process is fair and equitable to all contractors and further protects the interests of the City.
It is recommended that an appropriate staff representative from the Works and Emergency Services Department attend the
Alternative Dispute Resolution Centre on June 25, 1998, at 2:00 p.m. with full and final authority to settle this case, if so
advised by the City Solicitor.
Contact Name:
R. T. Quinn, Director, Environmental Services, 396-7113, E-mail: rtquinn@city.scarborough.on.ca.
+W. Adams, Director, Central Services, 396-7228, E-mail: @city.scarborough.on.ca.
