Report to/Rapport
au :
Corporate Services and Economic
Development Committee
Comité des services organisationnels et du développement
économique
and Council / et au Conseil
21 September 2009 / le 21 septembre 2009
Submitted by/Soumis par: Marian Simulik, City
Treasurer/Trésorière municipale
Contact/Personne-ressource: Daniel Farrell, Program Manager, Purchasing
Unit / gestionnaire de programme,
Division de la gestion de l'approvisionnement,
(613) 580-2424 ext./poste 21505; Daniel.Farrell@ottawa.ca
That the Corporate Services and Economic Development Committee table this report, to be received and discussed at the next scheduled meeting of CSEDC, and then forwarded to Council for information.
Que le Comité des services organisationnels et
du développement économique dépose le présent rapport, qui sera discuté à la
prochaine réunion prévue du CSODE, puis transmis au Conseil municipal pour
information.
The
Purchasing by-law requires the Supply Branch to report to Council on a
quarterly basis. Each quarterly
report:
1. contains information on contracts exceeding $10,000 awarded
under delegated authority;
2.
identifies all
contracts categorized as:
(a) Consulting Services
(b) Professional Services
(c) Follow-on Contracts
(d) Amendments
3.
identifies the reason
for outsourcing in accordance with the definitions discussed below.
4.
includes details about
the Legal Outsourcing Costs.
Document 1
The
contracts approved for the period of April 1 to June 30, 2009 are listed in
Document 1.
Where appropriate, staff used the following definitions
as outlined in the Purchasing By-law to identify the contract category, the
outsourcing reason and the non-competitive exception.
Professional
Services
Professional Services means services requiring the skills of professionals for a defined service requirement or for a specific project related deliverable including but not limited to the areas of engineering, architecture, design, planning, information technology, financial auditing and fairness commissioners.
Consulting Services
Consulting Services means assistance to management, including but not limited to the areas of strategic analysis, organizational design, change management, policy development, feasibility studies and other services intended to assist decision making within the organization.
An amendment is an increase in the scope of an approved contract, which is unanticipated. Those amendments that are both greater than $50,000 and 50% of the original contract will be identified in the quarterly report.
Follow-on Contract
A follow-on contract differs from an amendment in that the original contract or bid solicitation document recognizes the fact that it is likely that the initial defined contract scope may be expanded to include a number of related phases that are either included in the tender document, or are customary in relation to the work assignment. Rates charged for the follow-on contract are reviewed by the Supply Branch, and must be based on those rates proposed by the service provider in the original competitive “bid”.
An extension to a contract is not categorized as an
amendment or a follow-on contract. An
extension is a contract term allowing the City to continue purchasing the good
or service for an extended period of time where the option to extend the
contract was outlined in the bid document, or is deemed to be in the best
interest of the City.
Reasons for Outsourcing the
Work
The
reason Consulting and Professional Service contracts are let is identified as
follows:
(a) workload
related or lack of internal resources by a “W”;
(b) need for specialized expertise by an “E”;
(c) need for independent third party oversight by an
“I”;
(d) regulatory requirement by an “R”;
(e) proprietary service or unique market position by a
“P”; and
(f) business
model required outsourcing by an “O”.
The following table summarizes the total number and value of the contracts as well as the different categories under which the applicable contracts fall.
|
Total # of Contracts |
Total $ Value |
#
Prof. Services |
#
Consulting |
Workload
|
Specialized
|
Independent
third party oversight "I" |
Regulatory
|
Proprietary
|
Business
model outsourcing "O" |
AG |
13 |
$259,008.84 |
13 |
- |
- |
13 |
- |
- |
- |
- |
CM |
54 |
$14,236,907.68 |
30 |
3 |
- |
27 |
1 |
- |
- |
5 |
CO |
422 |
$51,363,290.08 |
79 |
20 |
- |
68 |
1 |
- |
- |
30 |
ISCS |
430 |
$200,535,896.80 |
147 |
7 |
- |
31 |
1 |
- |
- |
122 |
Total |
919 |
$266,395,103.40 |
269 |
30 |
- |
139 |
3 |
- |
- |
157 |
Non-Competitive Purchases
22(1) The
requirement for competitive bid solicitation for goods, services and
construction may be waived under joint authority of the appropriate Director
and the Supply Branch and replaced with negotiations under the following
circumstances:
a. where competition is precluded due to the application of any Act or legislation or because of the existence of patent rights, copyrights, technical secrets or controls of raw material,
b. where, due to abnormal market conditions, the goods, services or construction required are in short supply,
c. where only one source of supply would be acceptable and cost effective,
d. where there is an absence of competition for technical or other reasons and the goods, services or construction can only be supplied by a particular supplier and no alternative exists,
e. where the nature of the requirement is such that it would not be in the public interest to solicit competitive bids as in the case of security or confidentiality matters,
f. where, in the event of a "Special Circumstance" as defined by this By-law, a requirement exists,
g. where the possibility of a follow-on contract was identified in the original bid solicitation.
h. where the total estimated project cost for professional services does not exceed $50,000, or
i. where the requirement is for a utility for which there exists a monopoly.
22(7) Any non-competitive contract that does not satisfy the provisions of Subsection 22(1) is subject to the City Manager’s approval.
Document 1 identifies all non-competitive purchases as well as references the appropriate subsection 22(1) and 22(7) exception.
Supply
Branch certifies that all the contracts awarded under Delegation of Authority
for the period of April 1 to June 30, 2009, are in compliance with the
Purchasing By-law.
Since previous reports have been based on a
reporting threshold of $25,000, and this report, as well as all subsequent
reports, includes contracts with a value of $10,000 or more, statistical
comparisons should be viewed within that context.
In an effort to enhance the revised reporting methodology approved by
Council 22 April 2009, and add perspective to the data, staff provided the
following overview.
Purchases > $10,000, and > $25,000
2009 Q2 |
Total Contracts |
% of Total
Contracts |
Total Amount |
% of Total
Amount |
Purchases 10K – 25K |
314 |
34.2% |
$5,027,089 |
1.9% |
Purchases 25K - above |
605 |
65.8% |
$261,368,014 |
98.1% |
Total |
919 |
100% |
$266,395,103 |
100% |
2009 Q2 Purchases by Type
Type |
# of Contracts |
|
Fleet |
127 |
$86,502,635[1] |
Construction & Technical Services |
289 |
$120,700,879[2] |
Professional Services |
299 |
$30,692,421[3] |
Goods |
204 |
$28,499,168[4] |
Total |
919 |
$266,395,103 |
Professional and Consulting Services Contracts >
$10,000
2009 Q2 |
Total Contracts
|
Total Value
|
Professional Services |
$24,302,666 |
|
Consulting Services |
30 |
$6,389,754 |
Total |
299 |
$30,692,420 |
Document 2
Legal costs paid for the second Quarter 2009 are listed in Document 2.
Although the City Clerk and Solicitor is required by the Purchasing By-law to identify those law firms in receipt of an annual cumulative total of $100K or more, in an effort to be completely transparent the Branch has identified all of the law firms providing external legal services to the City during the second Quarter of 2009, as well as identifying disbursement and GST costs for that same period of time as per Sections 13(1) and (2) of the Purchasing By-law. Also included for the second Quarter of 2009 are the amounts paid to external law firms with respect to litigated insured claims. These amounts represent legal fees and disbursements associated with litigation, which are funded by the City's Self-Insurance account and therefore, are not paid from the Legal Services' budget. Similarly, the amounts reported for external legal services provided with respect to the Light Rail project and litigation are not paid from the Legal Services’ budget, and instead, are paid from the North-South Light Rail budget within the Infrastructure Services and Community Sustainability Department.
CONSULTATION
The preparation of this report is required by the Purchasing By-law and as such no public consultation is required.
There are no adverse legal or risk management implications as the information is required to be disclosed pursuant to the Purchasing by-law.
Prior to a contract approval, Supply Branch staff
confirms that the appropriate funds are available in the budget, based on
receipt of a funded requisition in SAP.
The availability of funds is a condition of approval under the
Purchasing By-Law.
Report forwarded for information pursuant to the Purchasing By-law.
[1] Includes supply of 80 Hybrid Buses to Transit Services - $50.35 M
[2] Includes:
· Wellington Street West Reconstruction, Parkdale Avenue to Bayview Avenue - $10.61 M
· Bank Street Rehabilitation from Somerset Street to Arlington Street - $8.87 M
[3] Includes:
· Engineering services - $14.27 M
[4] Includes business and enterprise operations software licensing, complete with support, for Information Technology Services - $3.84 M