R E P O R T	TO	WORKS COMMITTEE
	FROM	Ken Thompson, District Engineer
	FILE REF	42.004.005 - OO192437.rtf
	DATE	5 May 2004
	SUBJECT	WAITAKARURU SEWERAGE SCHEME

RECOMMENDATION

THAT the report be received

Tenders were invited for Contract HDC 277 : Waitakaruru Sewerage Project: Design and Build for the new sewerage scheme. After two extensions of time requested by the contractors, the final tender closing date was 29 April 2004.

A previous report on this scheme was made to the Works Committee meeting of 5 November 2003.

The tendering process was preceded by an invitation for registrations of interest. A selection process led to an invitation to the following four companies to tender for the contract:

Heb Contractors Ltd

Innoflow Ltd

Smith & Loveless New Zealand Ltd

Works Infrastructure Ltd

Three tenders were received, from Heb, Smith & Loveless, and Works. Innoflow Ltd withdrew from the tender process before the tender date.

Tender prices varied from $1,296,482.00 to $1,197,315.00. The estimate for the work included in the scope of the contract is $545,800.

The narrow spread of prices would normally be interpreted as showing a consistent understanding of and approach to the contract requirements by tenderers, and as some reassurance that the price was realistic. However, the very large amount by which the average tender price exceeds the estimate and consideration of the method of deriving the estimate indicate that a perception of high risk may have led to consistently high pricing by the tenderers in this case. Accordingly, it is recommended that none of the tenders be accepted, and that alternative methods of provision be explored.

RECOMMENDATION

THAT no tender be accepted for Contract HDC 277 : Waitakaruru Sewerage Scheme

AND THAT alternative methods of provision be explored

Ken Thompson

District Engineer