City within legal rights to give spray park tender to lowest bidder

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FORT ST. JOHN, B.C. – After a local construction company voiced concerns over the way the city was awarding tenders, specifically with the new spray park, the City has received legal confirmation that they were within the right to give it to the lowest bidder.

Kalmar Construction and the Northern Regional Construction Association expressed numerous concerns at a Council Meeting on June 27th.

Of major concern was the Spray Park tender process and subsequent course of action by the City to award this tender.

“Kalmar and the Construction Association’s concerns on this project were that the bids received were over budget and the City had chosen to negotiate with the low bidder to reduce the scope of the project and bring the project in line with the approved budget.

Both Kalmar and the Construction Association’s opinion was that the project, if being reduced in scope, should be re-tendered and that the City should not be negotiating with the low bidder.”

While Kalmar had concerns, the city also said that the project is on a time restraint and needs to be awarded before July 22nd of this year.

“Time is of the essence for this project as Section 5.1 of the Unit Price Contract of the Master Municipal Construction Document stipulates the terms of the irrevocable offer and acceptance by the owner is 45 days. This means that the prices contained in the tender are valid until July 22nd and that the tender needs to be awarded before this date.”

With the concerns that were brought to light by Kalmar and the Northern Regional Construction Association, also pointing out that legal issues were in play, the city sought legal advice as well after the meeting.

“City staff sought a legal opinion on the recommendations and direction staff indicated in Administration Report No. 113/16. The legal opinion received by the City indicates that the City is within its rights to negotiate with the low bidder, and in this circumstance, actually have a duty of fairness to do so with the low bidder.”

The motion was moved, and seconded by council, signalling that the lowest bidder, TKG Irrigation, will receive the tender, despite concerns brought forward.

“THAT, Council acknowledge that the tenders received for the Rotary Spray Park came in over budget, AND THAT, staff be authorized to enter into negotiations with the lowest bidder, TGK Irrigation Ltd., from Burnaby, BC to investigate cost savings that would decrease the total cost of the work to the budgeted amount of $611,000, AND FURTHER THAT, if negotiations are successful, that the Spray Park Installation project tender be awarded to TGK Irrigation Ltd.”

Kalmar had also submitted a bid along with TGK Irrigation Ltd. TGK is from Burnaby, while Kalmar is local, here in Fort St. John. Below are the two bids that were submitted for the spray park tender, with TGK the lesser of the two.

TGK Irrigation Ltd. from Burnaby, BC $722,820.00 GST Included

Kalmar Construction from Fort St. John, BC $787,643.02 GST Included

The project still comes in over budget with TGK’s offer. The City says funds will be used from reserves to fund the remaining cost of the spray park.