City of Powell River Council has approved awarding of a construction oversight services contract for the consolidated wastewater treatment plant to Associated Engineering (AE) for an amount up to $4,333,994.
At a special council meeting on July 30, councillors unanimously approved the expenditure. The matter was referred from a city finance committee meeting held on July 23.
When councillors were offered the opportunity for discussion on the matter, none chose to do so.
According to a written report to council from Nagi Rizk, manager of engineering services, he stated that the city does not meet current federal wastewater systems effluent regulations regarding sewage effluent treatment quality and has received written warnings of alleged contraventions of the Fisheries Act from Environment and Climate Change Canada.
“Significant fines and penalties will result from ongoing non-compliance,” stated Rizk. “Design of the plant is nearing completion and is awaiting the outcome of the value engineering study mandated by Green Infrastructure – Investing in Canada Infrastructure Program fund. The city is currently in the final stages of the value engineering process, which will enable completion of design. Tenders for construction can then be issued.”
The contract approved for Associated Engineering is sole-sourced, which means it did not go out for competition.
During the question period, the city was asked why it awarded the contract to AE without going to other firms.
Rizk said it costs a lot of money to put the contract out for tender, and if the lowest bidder is not the designer, there is a process for them to catch up and become conversant with design work that involves a lot of work and expense. He said it’s best to avoid that scenario, although it does happen.
There was also a question of whether there was a conflict with awarding the contract to Associated Engineering.
Rizk said it’s almost the opposite because AE is the designer and the company wants to see it constructed properly.
“It’s in their interest to make the design work,” said Rizk. “That’s why we have recommended going with the designer and not anyone else.”
Rizk said there was also a third party, Colliers International, looking over the shoulder of Associated Engineering to make sure fees and services being paid for are completed according to the contract.
“They have been with us through the design phase,” said Rizk. “They review what Associated Engineering has done, they compare it to the contract we have with them, they then either stamp it approved or ask to go back and clarify the item.
“It comes back to me, and the finance department and we certify those things were done.”
In his report, Rizk stated the city could consider pursuing pricing from other engineering firms, which may or may not yield lower fee proposals and cost savings.
“At this time, this process may create scheduling challenges and although it may yield some apparent cost savings, we believe these cost savings will not materialize,” stated Rizk. “If selected, the lowest bidder, other than Associated Engineering, would require time and effort to become familiar with the design and sufficiently comfortable to take on professional responsibility in overseeing the construction and certifying the constructed plant and conveyance. There is an inherent risk to the city and consultant if this option is selected.”