August 30, 2006

Construction

Cancelled project irks industry

City of Ottawa’s tender process in question

PATRICIA WILLIAMS

staff writer

TORONTO

The cancellation by the City of Ottawa of a tender for reconstruction of part of King Edward Avenue has raised the ire of the local contracting community.

Low bidder R.W. Tomlinson Ltd. was notified in mid-August that the tender was being cancelled. The firm had submitted a $21.6 million bid.

“Unfortunately, the bids received for the work were considerably higher than the city’s budget for this project,” said purchasing officer Patty Arguin. “A decision was made to cancel the tender.”

The bid reportedly was $8 million above budget.

John DeVries

In a letter to Mayor Bob Chiarelli, Ottawa Construction Association president John DeVries said his organization believes this decision “and the underlying assumptions behind it are flawed and need to be revisited immediately as a result.

“This major reconstruction is a complex, multi-faceted project that resulted in two competitive bids, of $21.6 million and $23.4 million,” he said.

Phase 2 of the renewal project involves reconstruction from the MacDonald Cartier Bridge/Sussex Drive to St. Patrick Street.

Included is installation of a new watermain, sewer relining, preparation for burial of overhead utilities and completion of roadway reconstruction.

DeVries said “it is the association’s understanding that prime engineering consultant Delcan Corp. had provided the city with a budget estimate some $8 million below the low tender and had subsequently provided an opinion that the bids are overpriced.”

Delcan declined comment on the letter.

The company referred calls to city senior project manager Phill Kerridge. He could not be reached for comment.

“They are playing Monday morning quarterback now after receiving two competitive bids,” DeVries told Daily Commercial News.

Bert Hendriks, executive vice-president of Tomlinson’s municipal division, believes his firm submitted a “realistic” price given the complexities of the project, which he said involves digging five metres through solid rock.

“It’s crazy,” Hendriks said in an interview. “I thought we were pretty aggressive as it was. We beat the other guy by $2 million. Does that mean I have to beat somebody by $8 million to get the job.”

For its part, the association told the mayor that Tomlinson should be given the opportunity “to rebut possible erroneous assumptions and conclusions as to current construction market pricing.”

DeVries said city didn’t even sit down with the low bidder to negotiate changes, which would be in keeping with recommended procedures under the Canadian Construction Documents Committee document 23, a guide to calling bids and awarding construction contracts.

The association has not received a response to its letter.

But Hendricks said “the word on the street is that the matter is being re-evaluated.

“I heard that the consultants have taken another look at the budget and that they are now up to around $19 million or something.”

DeVries told the mayor that cancelling “this properly tendered project is unfair and has the potential to erode the excellent tendering relationship the city enjoys with the local construction industry.”

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