Meeting Date: November 28, 2005

Subject: Procurement Authorization - Supply Of Syenite Rail Sand

Recommendation

It is recommended that the Commission approve the issuance of a purchase order to Rock Products Ltd. for the supply of syenite rail sand on an as required basis for the period of January 1, 2006 to December 31, 2006 in the total upset limit amount of $225,000.

Funding

Sufficient funds will be included in the 2006 TTC Operating Budget for the supply of syenite rail sand.

Background

The Commission has an ongoing requirement for syenite rail sand which enhances the streetcar braking system.  The Commission currently has a three and a half year contract with H.J. Skelton Canada Ltd. for the supply of syenite rail sand.  This contract is scheduled to expire on December 31, 2005.

The current streetcar sanding system has proven to be unreliable in the winter months and is costly to maintain.  The alternative sanding system may use a different material in its system, thereby lessening the reliance on the syenite sand.  Staff is in the process of evaluating an alternative sanding system for the Commission’s streetcar fleet and as a result, the new contract will be for a one year period only.

Discussion

Most of the aggregate companies that are in operation are unable to quote on this requirement due to the specialized refining process to remove all moisture from the sand.  This syenite silica free sand is only manufactured by one supplier (Unimin Corporation).  They only authorize distribution through two companies; Rock Products Ltd. and Bell and MacKenzie Company Ltd. who utilize H.J. Skelton Canada to act as their agent.

Three companies were invited to submit proposals.  Two companies submitted proposals as detailed on the attached Appendix ‘A’. 

The proponents were required to provide pricing for syenite rail sand based on an estimated number of tonnes for a one year period as well as a delivery charge per metric tonne.

Rock Products Ltd. submitted the lower proposed price and did not submit any exceptions/qualifications.  Rock Products Ltd. have performed this work in the past for the Commission and have performed satisfactorily.  They are considered acceptable and recommended for award.

H.J. Skelton Canada Ltd. submitted the other bid.  Their bid was commercially compliant, but was not considered further due to their higher pricing.

The unit price per tonne submitted by Rock Products Ltd. is approximately 0.5% lower than the pricing under the current contract.

The unit price per tonne for delivery charges is approximately 29% higher than the pricing under the current contract.  This price increase is directly related to higher fuel costs over the last 3.5 years as the current contract pricing is from July 1, 2002 to December 31, 2005.

The recommended upset limit includes an allowance of 10% for variation in usage over the one year contract period.

Justification

Award of a contract to Rock Products Ltd. will ensure the uninterrupted supply of syenite rail sand for the Commission’s ongoing operation requirements for 2006.

November 1, 2005

9-118-86

Attachment -  Appendix ‘A’

Appendix ‘A’

Supply Of Syenite Rail Sand

Cost Summary

Proponent / Total Proposed Price

Rock Products Ltd. / $204,884.00 (Recommended for Award)

H.J. Skelton / $214,678.55

(Recommended for Award)