Purchase Of Union Switch And Signal Parts
Meeting Date: January 12, 2005
Subject: Purchase Of Union Switch And Signal Parts
It is recommended that the Commission authorize the award of a three-year inventory supply contract for the supply of various signal parts for the period from January 2005 to December 2007 to Union Switch & Signal Incorporated in the upset limit amount of $278,000 (CDN) including applicable taxes.
Sufficient funds are available in the 2005 TTC Operating Budget which was approved by the Commission at its November 17, 2004 Commission meeting and will be included in future Operating Budgets as required. These inventory materials will be charged to the appropriate budget at the time of issuance from Stores.
The subject signal parts are used for the maintenance of signal equipment within the Commission. Several examples include train stop gears, trip arms and various signal relay parts.
On October 12, 2004, Union Switch & Signal Incorporated was invited to submit a proposal on the basis of single source as they are the Original Equipment Manufacturer and the only known source of supply for these parts.
The Proposal requested pricing on 49 part types. Union Switch & Signal Incorporated submitted pricing for 41 part types at a total proposed value of $185,792.31 (USD) or $219,940.93 (CDN) based on the published exchange rate of 1.1838. The remaining 8 part types are comprised of 6 part types that have been identified as obsolete and 2 part types that are no longer available as sub-components. These 8 part types will require further investigation by staff, which may be the subject of a future proposal.
Their proposal also contained qualification regarding part number revisions on 11 part types. Their qualification indicated no change to fit, form or function but were merely administrative thereby not rendering these parts as alternative.
The pricing for this new three-year inventory supply contract is approximately 25% lower in the first year than the current price. The pricing will be approximately 3% higher in year two based on year one pricing and approximately 3% higher in year three based on year two pricing. Staff contacted Union Switch & Signal Incorporated to negotiate a price reduction but were advised that no further reduction was available.
The total upset limit amount of $278,000 includes approximately 20% contingency for variances between forecasted and actual usage and new parts yet to be identified which may be added to this contract during the contract term. As well an additional 5% has been added to cover freight, duties and brokerage over the course of this contract.
These signal parts are required in order to support the Commission’s signal maintenance needs.
December 10, 2004