Meeting Date: January 24, 2003

Subject: Procurement Authorization - Supply And Disposal Of Rectifier Transformers - Various Locations

Recommendation

It is recommended that the Commission authorize the acceptance of the tender submitted by The State Group Industrial Limited (State) in the amount of $1,450,660.00, which includes an amount of $58,660.00 for Specified Options 1 through 4 inclusive, for the supply of seven new rectifier transformers and two new rectifiers including disposal of the old existing units.

Funding

Sufficient funds have been included under Project 2.1 - Electrical Systems, Traction Power (Work Order #7633 – Replace/Rebuild Rectifier Transformers), as set out on pages 109 to 114 of the 2003-2007 "State of Good Repair" Capital Program, as approved by the Commission at its meeting of November 15, 2002.

Background

Rectifier transformers are major components in the conversion of AC power to DC traction power for the streetcar, subway and Scarborough Rapid Transit systems. A feasibility study on the replacement of leaking rectifier transformers at various traction power substations recommended replacement of such transformers based on life expectancy, parts availability, service reliability, annual operating costs, and environmental impact due to oil leaking. The Commission previously approved replacement of seventeen rectifier transformers at nine substations. There are 52 substations with a total of 118 rectifier transformers in the Commission.

The next transformers scheduled for replacement are the two located at Warden Substation, two located at Hillcrest Substation, two located at Lippincott Substation and one at Pleasant Substation. Hillcrest and Lippincott Substations supply traction power for the streetcar system operating in the Toronto downtown area. Warden Substation supplies traction power for the Bloor-Danforth subway line. Pleasant Substation supplies traction power for the Yonge subway line and for the streetcar system. Each substation consists of a building and an adjacent fenced area. The rectifier transformers are located outdoors in the transformer yards. These transformers have developed miscellaneous problems, e.g. oil leaks and tap changer defects. An emergency patchwork method of repairs, which has been carried out to date, is no longer considered acceptable. In addition, because of a special construction of the Warden’s rectifier transformers and rectifiers, where the rectifier diodes are mounted directly on the existing transformer tanks, two new rectifiers shall be purchased and supplied with the new rectifier transformers.

The rectifier transformers and rectifiers at Warden and Hillcrest Substations are scheduled to be replaced in 2003, and the rectifier transformers at Lippincott and Pleasant Substations in 2004.

Discussion

Specifications and drawings were prepared for the supply of new and disposal of existing rectifier transformers and rectifiers. A request for tenders was posted on TTC’s Web site on November 27, 2002. Three companies submitted tenders out of six companies that requested copies of the tender documents.
State submitted the lowest priced tender and did not state any exceptions or qualifications nor offer any alternatives for consideration. State also submitted pricing for the specified options for the design, fabrication and installation of seven oil containment systems for Hillcrest, Warden, Lippincott and Pleasant Substations. They have satisfactorily completed work of a similar size and nature for the Commission in the recent past. Their tender is considered acceptable. The Agreement to Bond submitted by State covers both a Labour and Material Payment Bond and a Performance Bond. The surety noted on the tender is licensed to transact business under the Insurance Act of Ontario.

Stein Industries Incorporated (Stein) submitted the second lowest priced tender. However, their Agreement to Bond form contained an exception which is not acceptable. Therefore, Stein’s tender is not considered acceptable.

Black & McDonald Limited (B&M) also submitted a tender, however, there was an obvious error on the face of the tender in that the written portion of the offer reads a different amount from the numerical portion of the offer. As such, B&M’s tender is not considered acceptable.

Justification

The existing rectifier transformers have exceeded their operational lifespan and parts for repair are no longer available. These transformers have developed miscellaneous problems that are beyond repair. Failure of these transformers could result in substation shutdowns and disruption to revenue service.
The tender submitted by the State Group Industrial Limited is the only commercially and technically acceptable tender.

January 3, 2003

6-235-235

Attachment – Appendix ‘A’