1. DELEGATION
OF AUTHORITY – CONTRACTS AWARDED FOR THE PERIOD OCTOBER 1 TO DECEMBER 31, 2009,
AND LEGAL OUTSOURCING COSTS
DÉLÉGATION DE
POUVOIR – CONTRATS ACCORDÉS POUR LA PÉRIODE DU 1er OCTOBRE AU 31 DÉCEMBRE 2009 ET FRAIS LÉGAUX
D’IMPARTITION
COMMITTEE RECOMMENDATION
That Council receive the report for information.
RecommandationS du ComitÉ
Que le Conseil prenne connaissance du rapport.
DOCUMENTATION
1. City Treasurer’s report dated 22 March 2010 (ACS2010-CMR-FIN-0017).
Corporate Services and Economic Development
Committee
Comité des services organisationnels et du développement économique
and Council / et au
Conseil
Submitted by/Soumis par : Marian Simulik, City Treasurer/Trésorière
municipale
Contact
Person/Personne ressource : Jeff Byrne, Manager, Supply / Gestionnaire,
Approvisionnement
Finance
Department/Service des finances
(613)
580-2424 x25175, Jeff.Byrne@ottawa.ca
|
Ref N°: ACS2010-CMR-FIN-0017 |
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 October 1 to December 31, 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.
Amendment
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 |
5 |
$228,640.70 |
5 |
- |
- |
5 |
- |
- |
- |
- |
|
CM |
55 |
$12,104,812.97 |
21 |
1 |
- |
18 |
1 |
- |
- |
3 |
|
CO |
338 |
$40,747,154.19 |
85 |
7 |
- |
81 |
1 |
- |
- |
10 |
|
ISCS |
459 |
$193,686,842.36 |
178 |
5 |
- |
32 |
2 |
- |
1 |
148 |
|
Total |
857 |
$246,767,450.22 |
289 |
13 |
- |
136 |
4 |
- |
1 |
161 |
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.
Document 1 identifies all non-competitive purchases as well as references the appropriate subsection 22(1).
Supply Branch certifies that all the contracts awarded under Delegation
of Authority for the period of October 1 to December 31, 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, include 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.
|
2009 Q4 |
Total Contracts |
% of Total
Contracts |
Total Amount |
% of Total
Amount |
|
Purchases 10K – 25K |
308 |
35.9% |
$5,053,098.33 |
2.0% |
|
Purchases 25K - above |
549 |
64.1% |
$241,714,351.89 |
98.0% |
|
Total |
857 |
100% |
$246,767,450.22 |
100% |
2009 Q4 Purchases by Type
|
Type |
# of Contracts |
|
|
Fleet |
94 |
$35,079,455.92[1] |
|
Construction & Technical Services |
261 |
$165,891,635.88[2] |
|
Professional Services |
302 |
$31,226,437.75[3] |
|
Goods |
200 |
$14,569,920.67 |
|
Total |
857 |
$246,767,450.22 |
Professional and Consulting Services Contracts >
$10,000
|
2009 Q4 |
Total Contracts
|
Total Value
|
|
Professional
Services |
$30,607,701.71 |
|
|
Consulting Services |
13 |
$618,736.04 |
|
Total |
302 |
$31,226,437.75 |
Document 2
Legal costs paid for the fourth 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 Department has identified all of the law firms providing external legal services to the City during 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 in this report 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, but rather, are paid from the North-South Light Rail budget within the Infrastructure Services and Community Sustainability Department.
The information provided in Document 2, is a summary of external legal
services costs for each of the four quarters in 2009 and provides a year-end
total on the second page.
There were a number of Council-driven initiatives in 2009, which
resulted in significant legal costs. The
table below summarizes a number of those projects and expenditures:
|
Council-driven Initiative |
2009 Legal Costs |
|
Lansdowne Partnership Plan and Injunction |
$260,250 |
|
Minto-Manotick (OMB and Judicial Review) |
$176,280 |
|
Pay and Display Contract |
$161,470 |
|
ATU Interest Arbitration 2009 |
$151,820 |
|
The School of Dance |
$ 65,780 |
|
Plasco Energy Group |
$ 59,900 |
|
Smart Bus |
$ 51,550 |
|
Voice Over Internet (VOIP) Contract |
$ 51,540 |
|
Orgaworld Canada Inc. Contract |
$ 42,390 |
|
Integrated Street Furniture |
$ 25,295 |
In addition, there were several litigation matters, which resulted in
significant expenditures, including the $10M claim by the Ottawa Lynx and the
$3M claim by the Ottawa Rapidz against the City ($95,950 and $20,700 in legal
costs respectively); the claim by the City for $600K in emergency repair costs
and the $2M claim against the City for loss of business associated with
Somerset House ($98,110 in legal fees); Employment law issues associated with
the Keefer Regulator ($74,164 in legal fees) and D. Wilson ($61,540 in legal
fees).
The vast majority of outsourced work is with the City’s three Strategic
Standing Offer firms, i.e. Borden, Ladner, Gervais (Corporate, Commercial and
Development files); Heenan, Blaikie (Litigation files); and Hicks, Morley
(Labour and Employment Law files). Work
may be outsourced to external law firms for the following reasons:
1. Specialized area of expertise not available in-house (i.e. defamation);
2. Professional conflict of interest that would prohibit in-house lawyers from carriage of file/matter;
3. Second opinion required to protect City’s interest;
4. Volume/Scope/Magnitude of file/matter that requires resources beyond those available in-house;
5. Workload issues – in-house resources are not available by virtue of existing workloads;
6. Sensitivity of issue;
7. Direction from City’s insurer.
Legal Services
will be negotiating a new Strategic Standing Offer for the provision of
external legal services later this year.
There are no rural implications.
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.
Document 1 - List
of Contracts with a value of $10K or more, awarded under delegated authority
for the period October 1 to December 31, 2009 (Previously distributed and held on file).
Document 2 - Expenditures for outsourcing legal services
in the first, second, third and fourth quarters of 2009 (Previously
distributed and held on file).
Report forwarded for information pursuant to the Purchasing By-law.
[1] Includes
the rental of dump trucks and dump trailers for snow removal for 2009/2010 –
$6.0 M
[2] Includes:
·
Hazeldean
Road Widening (Phase 1 and Phase 2) - $40.1 M
·
Baseline
Station Transitway Tunnel, College Avenue Overpass and Navaho Drive Overpass -
$29.4 M
·
Construction
of a Central Archives and Ottawa Public Library Materials Centre - $26.3 M
[3] Includes:
·
Engineering
Services – $17.5 M