Meeting Date: April 18, 2007

Subject: Purchase Order Amendment Authority - Completion For The Supply Of 2007 Surface Special Trackwork Castings, H.J. Skelton

Recommendation

It is recommended that the Commission authorize an increase of $1,223,000 in Canadian funds to H. J. Skelton for the completion of the 2007 supply of surface special trackwork castings increasing the total authorization from $11,056,250 to $12,279,250.

Funding

Sufficient funds to accommodate this expenditure are included in project 1.2 Surface Special Trackwork Replacement Program, as set out on pages 85 to 87 in the “State of Good Repair /Safety” category of the TTC 2007-2011 Capital Program, approved by the City of Toronto Council on March 7, 2007.

Background

At its meeting of January 21, 2001, the Commission awarded a 5 year contract to H.J. Skelton in the amount of $11,000,000 for the period of 2002-2006 for the supply of surface special trackwork castings. The contract was amended to include $56,250 for the supply of 10 pairs of rail expansion joints.  In 2005, a further amendment was approved to extend the supply contract to December 31, 2007 for one additional year since significant funds were remaining after the completion of the 2006 work.  With the finalization of the TTC 2007-2011 Surface Special Trackwork Replacement Program, it was then determined that insufficient funds existed in the upset limit of the contract.  Hence the purchase order amendment is required to increase the upset limit authority.

On January 31, 2007, the Commission approved the TTC 2007-2011 Capital Program to include the following 2007 special trackwork locations:

1) Dundas & Bay
2) Dundas & Church
3) Dundas & McCaul
4) Dundas & Ossington
5) Queen & Bathurst
6) Roncesvalles Yard Tracks 1 & 2 Re-design

The status of Purchase Order PC33246 is as follows:

Authorized Upset Limit: $11,000,000.00
Previous Increase: $56,250.00
This amendment: $1,223,000.00
Revised Upset Limit: $12,279,250.00

Discussion

The requested increase is required to complete the 2007 Surface Special Trackwork Replacement Program.  The estimated final cost for the 2007 Surface Special Trackwork castings is $3,700,000.  The material required for the 2007 Surface Special Trackwork is the same type as the material included in the current contract. Contract pricing is based on the unit pricing submitted for 2002, with this pricing adjusted for subsequent years based on a pre-determined formula included in the contract.  H.J. Skelton’s performance has been satisfactory.  The purchase order’s outstanding amount (PC33246) prior to placing the 2007 casting order was approximately $2,477,000.  The purchase order amendment is now needed to cover this difference of approximately $1,223,000 and continue the timely deliveries of the 2007 castings, as there is insufficient time to re-tender this requirement and receive delivery of the material as required in 2007.

Justification

The purchase order amendment of $1,223,000 to H.J. Skelton will ensure the necessary upset limit contract amount is in place for the final purchase of the 2007 Surface Special Trackwork castings.

March 29, 2007
5-11-82