Graham new pier contractor, as joint venture with Jardeg

Burlington pier - completion in 2013 for $15M

I’ll be asking for transparency on legal costs; our other options; and design changes.

Graham Infrastructure of Mississauga, in a joint venture with Jardeg Construction Services Ltd., is the winning bidder to complete the Brant Street pier, following a unanimous vote at council Sept. 26.

Graham/Jardeg was one of seven prequalified bidders, and was the lowest of four who submitted a bid, at $5.9m net of HST.

Lowest bidder explained

Recognizinig that residents may have some concerns about going with the “lowest bidder” I asked staff what reassurances they could offer residents that the contractor would be successful. Contractors had to be pre-qualified to bid on the project, by demonstrating appropriate marine and construction experience. That was true of the original bid process, also, but staff advised that changes were made to the pre-qualification process this time around, making it more stringent. Any one of the prequalified contractors could have done the work, so once they are prequalified, the only differential among contractors is the price, staff explained.

Joint venture with unknown Jardeg

Though Graham clearly has the experience needed to complete the job (visit their webpage here, their bid is a joint venture with a subcontractor Jardeg – a company about which little is known other than they have partnered with Graham before. There was no information about Jardeg in the city staff report, Jardeg is not mentioned on Graham’s corporate website, they don’t have their own website, and only a smattering of information is available in news articles online.

I raised concerns about this at committee – who’s going to be in charge on the ground: Graham’s expertise or Jardeg’s? Staff advised that Graham will be the lead on the project, but I still have reservations about the joint venture arrangement.

Optional ramp to beach

Council accepted two optional items – additional paving around the pier walkway and a ramp to the sand beach on the west side of the pier. Worth $167k and $144k respectively, those are included in the bid price. A third optional item – a $100k temporary floating dock for boats – was not supported by staff or council.

Some preparatory work is expected to be done this fall, with construction to begin in spring 2012, for a 2013 completion.
Council receives regular reports on the progress of the pier every three weeks at each Community Services Committee.

Litigation update

With the retender underway, city council will now have to consider our litigation strategy – whether we aim for a court date or a negotiated settlement. Staff are expected to report back to council in the coming months on litigation. The original contractor, the original design engineer and others have been sued by the city for damages arising from delays.

Transparency update

On behalf of residents, I will continue to ask for transparency on three key items: legal fees, options for completion examined, and design changes. As the pier progresses, there will be opportunities for disclosure that don’t compromise our legal position, and I will be looking for those transparency moments to ensure residents receive this information as soon as feasible.

Legal fees: At my request, legal staff are looking into whether legal fees spent on the pier can be released, without jeopardizing our legal strategy. They are expected to report to council in November.

Design changes: With the public release of the retender documents this summer, the changes to the pier design became a matter of public record. I recently met with city staff to discuss those changes, and in particular whether they were requested by the original contractor. Residents deserve an explanation of the changes, and I have requested staff to advise what can be released and when, given that the design dispute forms a significant part of the litigation with the original contractor.

Cost of alternatives: Now that the retender is underway, I have asked staff to release the confidential staff reports outlining the options, costs and time lines that council considered to complete the pier before voting for the retender. This includes the report considered in September 2010 by previous council when they voted to retender, as well as the outline of costs and options considered in December 2010 when current council voted to retender, as well as the offer from the bonding company in Spring 2011. Releasing this information should not affect our litigation, since the parties to the litigation know these numbers already, and it cannot affect the retender bids, since they are now complete.

Costs almost double original projections

The original approved construction budget for the pier in 2006 was $6m (net of GST) with a total budget of $7.7m (see staff report here. Some provisional items were later added, bringing the construction cost to $6.4m, and total budget to $8.1m. (See staff report here

Though not all of that money has been spent, it has been set aside for use to complete the pier. The construction budget to bring the pier from its current state to completion is $5.7m (net of HST), with additional costs for consulting, project management and other items, bringing the total project budgert to $15.07 m. (See staff report, pg. 4 here

Thus, the total project budget for the pier has increased from $8.1m to $15.07 million. The federal government is contributing $4.36m, Region of Halton $2.5m, and Burlington Hydro $100k, with Burlington funding the remainder (See staff report here. The money has been set aside in various funds to be used as the project progresses.

My Take: I did not support the retender path because of the additional costs and timelines, but alternatives to complete the pier are now closed, so we need to get on with the retendering. However, I remain concerned about the amount of money spent on this project when we have other significant priorities – our hospital and infrastructure repair, to name just two. I also have reservations about the joint venture with Jardeg. Finally, I will continue to push for transparency on the legal costs, design changes and alternatives considered on this project, so residents can hold your representatives accountable for the decisions we’ve made.

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