Municipalities continue to deal with explosive inflation in the world of vehicle pricing, as the County of Stettler set aside the results of grader tenders that were about $300,000 higher than expected. The tender was presented at the March 8 regular meeting of council.
Councillors read a memo from Director of Operations Joe McCulloch describing the results of a tender the county recently released looking for three brand new graders with snow plowing attachments.
“Invitation to bid was advertised on the Alberta Purchasing Connections (APC) website (Reference Number: AB-2023-00897),” stated McCulloch’s memo.
“The tender closed on Feb. 24, 2023 at 2 p.m. A public tender opening was held immediately following the tender closure.”
McCulloch’s memo included the following results of the tender: Brandt Tractor of Red Deer offered a John Deere 872GP all-wheel drive (AWD) grader with five-year, 7,500 hour and seven year, 9,000 hour warranty options for $760,600.
Brandt Tractor of Red Deer also offered a John Deere 772GP AWD grader with the same warranty options for $708,200.
Finning of Red Deer offered a Caterpillar 150 AWD grader with seven-year, 9,000 hour or seven-year, 7,500 hour warranty options.
McCulloch noted these three offers came in much higher than expected.
“The operations department has allocated $600,000 plus tax per unit for a grader with snow equipment,” stated the memo.
“As you can see, significantly more than we were expecting,” said McCulloch during the discussion, adding that the combined difference was somewhere between $200,000 and $300,000.
McCulloch stated he contacted the Rural Municipalities Association (RMA) and the County of Stettler is planning on meeting with RMA’s purchasing department to discuss why these tenders came back so much higher than expected.
As well, McCulloch stated the County of Stettler plans to work with RMA in an attempt to purchase the graders at a lower price. He noted that may not include a tender process.
Several councillors chipped in with questions and concerns about attachments for the graders, including which attachments were needed and which ones had failed in use.
County Chief Administrative Officer (CAO) Yvette Cassidy noted working with RMA on purchasing is unfamiliar territory for the County of Stettler.
“We’ve never really done that before,” said Cassidy although she added that the municipality has cut deals with Finning before.
Coun. Les Stulberg commended McCulloch for coming back to council with this information and Stulberg stated he was glad the county didn’t just dig into its reserves and pay the extra money.
He noted some pencil sharpening was needed to stay within the budget.
The director of operations also described some issues with tenders for other vehicles; it seems municipalities and their fleets are not the top priority for vehicle manufacturers.
McCulloch noted there was some talk about dropping the graders down in size to save money.
Coun. Dave Grover was opposed to this. Grover noted he doesn’t like “baby graders;” the County of Stettler grader operators have a job to do and they should be given the machines they need to do that job.
Councillors unanimously accepted McCulloch’s memo as information.
Local Journalism Initiative reporter