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4. DELEGATION OF AUTHORITY – CONTRACTS AWARDED FOR THE
PERIOD JANUARY 1 TO MARCH 31, 2010, AND LEGAL OUTSOURCING COSTS DÉLÉGATION DE POUVOIR –
CONTRATS ACCORDÉS POUR LA PÉRIODE DU 1er JANVIER AU 31 MARS 2010
ET FRAIS LÉGAUX D’IMPARTITION |
That Council receive this report for information.
Recommandation du ComitÉ
Que le Conseil prenne connaissance du présent
rapport.
DOCUMENTATION
1.
City
Treasurer’s report dated 6 July 2010 (ACS2010-CMR-FIN-0051).
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-0051 |
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 January 1 to March 31, 2010 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 |
2 |
$26,015 |
2 |
- |
- |
2 |
- |
- |
- |
- |
|
CM |
76 |
$13,880,814 |
38 |
2 |
- |
34 |
2 |
1 |
2 |
1 |
|
CO |
362 |
$39,038,171 |
58 |
9 |
- |
57 |
- |
- |
- |
10 |
|
ISCS |
475 |
$163,641,971 |
182 |
8 |
- |
48 |
2 |
- |
- |
140 |
|
Total |
915 |
$216,586,971 |
280 |
19 |
- |
141 |
4 |
1 |
2 |
151 |
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 January 1 to March 31, 2010, 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.
|
2010 Q1 |
Total Contracts |
% of Total
Contracts |
Total Amount |
% of Total
Amount |
|
Purchases 10K – 25K |
289 |
31.6% |
$4,700,060 |
2.2% |
|
Purchases 25K - above |
626 |
68.4% |
$211,886,911 |
97.8% |
|
Total |
915 |
100% |
$216,586,971 |
100% |
2010 Q1 Purchases by Type
|
Type |
# of Contracts |
|
|
Fleet |
118 |
$33,957,282 |
|
Construction & Technical Services |
287 |
$125,429,243 |
|
Professional Services |
299 |
$27,169,010 |
|
Goods |
211 |
$30,031,436 |
|
Total |
915 |
$216,586,971 |
Professional and Consulting Services Contracts >
$10,000
|
2010 Q1 |
Total Contracts
|
Total Value
|
|
Professional
Services |
$26,239,431 |
|
|
Consulting Services |
19 |
$929,579 |
|
Total |
299 |
27,169,010 |
Document 2
Legal costs paid for
the first Quarter 2010 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 the first quarter of 2010, as well as identifying disbursement and GST
costs for that same period of time as per subsections 13(1) and (2) of the Purchasing By-law. Also included in the 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.
The information
provided in Document 2, is a summary of external legal services costs for the
first quarter of 2010. Council-driven
initiatives continue to result in legal costs.
The table below summarizes a number of these projects and expenditures
in the first Quarter of 2010:
|
Council-Driven
Initiative |
2010
Q1 Legal Costs |
|
Lansdowne
Partnership Plan, Injunction and Exhibition Hall RFP |
$179,537 |
|
Plasco Energy
Group |
$34,611 |
|
ATU Interest
Arbitration 2009 |
$17,540 |
|
Urban Boundary
Expansion Issues |
$10,500 |
|
Pay and Display
Contract |
$10,449 |
|
Orgaworld |
$5,847 |
In addition, there
were several litigation matters, which resulted in significant expenditures in
the first Quarter, including the court-ordered arbitration initiated by R.W.
Tomlinson regarding the Springhill Landfill ($334,489); the Marked Paintball
Injunction arising from the enforcement of the City’s Comprehensive Zoning
By-law ($18,747); the $10M claim by the Ottawa Lynx ($12,873) and the $3M claim
by the Ottawa Rapidz ($8,841); the claim by the City for approximately $600,000
in emergency repair costs, as well as the $2M claim against the City for loss
of business associated with Somerset House ($54,247); and employment law issues
associated with the Keefer Regulator ($19,956) and D. Wilson ($56,687).
The vast majority of
outsourced work is with the City’s three Strategic Standing Offer firms, being
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:
Finally, 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 January 1 to March 31, 2010. (Previously distributed and held on file)
Document 2 - Expenditures for outsourced legal services
in the first quarter of 2010. (Previously distributed and held on file)
Report forwarded for information pursuant to the Purchasing By-law.