City ends parts contract, seeks new supplier

Summary#

Montréal city council unanimously adopted a position to end the framework agreement with Services de mécanique mobile B.L. inc. for genuine Freightliner parts. The agglomeration council makes the final decision at a later meeting; the agreement has not yet been terminated under this decision. City staff say ending it would let the City seek a new supplier.

  • The agreement was for five years, with two possible 12-month extensions, and was estimated at 1 655 640 $, taxes included.
  • It followed a public call for tenders that received two bids, one of them compliant.
  • The supplier told the City it could not perform the contract and did not have Freightliner’s authorization to distribute parts in Montréal.

What it means for you#

  • City operations: City staff say the parts are needed to maintain and repair municipal heavy vehicles. They plan a new call for tenders after the agreement is terminated.
  • Taxpayers: The decision does not itself approve a new contract or set its price.
  • Supplier: City staff say the company remains responsible for damages resulting from its refusal to perform, including tender-process and termination-management costs. This decision does not award a specific amount of damages.

Money#

City staff say terminating the agreement would require no payment by the City because no purchases had been made under it.

  • The cancelled agreement was estimated at 1 655 640 $, taxes included. That was its estimated value, not a payment made to the supplier.
  • No cost estimate is provided for the new tender or any damages the City may seek.

What is unclear#

  • The agglomeration council’s final decision has not yet been made in the materials provided.
  • The materials do not say when the new call for tenders will begin, what it will cost, or what a replacement agreement may be worth.
  • They do not say whether the City will recover any tender or termination costs from the supplier.

Case for#

  • City staff say the supplier cannot meet the contract’s requirements. Ending the agreement would allow the City to seek a supplier able to provide the parts.
  • Staff say keeping the agreement in place would prevent a new call for tenders.

Case against#

  • The original tender produced only one compliant bid. A new tender may not quickly produce a replacement supplier; the materials give no timeline.
  • Although staff say termination requires no payment, the materials do not estimate the costs of running another tender or show whether damages will be recovered.