Supply chain issues throw monkey wrench into Carbonear’s purchase plans
By Mark Squibb/March 3, 2022
Two vehicles the Town of Carbonear intended to buy using a provincial government standing offer have increased in price due to supply chain shortages caused by the COVID-19 pandemic.
One is a new vehicle for the recreation department.
“It’s going to be an additional $10,000 for that machine,” CAO Cynthia Davis told council last month. “So, if the town wants to replace that machine, it will cost an additional $10,000 over what you originally approved.”
She advised the Town would be wise to get two additional quotes to ensure it’s still getting the best price.
Councilor Ray Noel asked if the provincial government is making available a new standing offer program this year. The program helps towns save money by using the power of a group purchase rate.
“Basically, what happened was, the supplier approached government and explained the supply chain issues they were having, and requested to suspend the current contract, and government approved it,” said director of operations and public works, Ian Farrell. “I’m not sure if you want to call it a ‘Wait and see’ approach or if they’re on hold indefinitely, but if we need vehicles, we have to take another route, and that is to get other prices.”
Davis said the company will hold the vehicles if the Town still wants to make the purchase.
Council was also looking to buy a truck for the public works department.
The price of that truck increased by $8,500.
“But as you all know, the price on that was pretty good as it was,” said Davis, at which point Deputy Mayor Sam Slade observed the price was actually unbelievable.
“So even with that extra $8,500, it’s still not abnormally high by any means,” said Davis.
Noel asked if government has given any indication as to when more standing offers will be made available.
“Or is the whole thing shot because of supply issues?” he asked.
Farrell said as far as he knew, the issuing of standing offers is on hold for the time being.
“They usually approach us when they’re about to go out with a standing offer, but as far as I know they haven’t indicated anything for right now,” said Farrell.
Noel said that suspending the standing offer program puts all municipalities in a difficult position, as it will likely result in higher prices.
Councilor Danielle Doyle noted that council had a meeting with Carbonear – Trinity – Bay de Verde MHA Steve Crocker coming up and that council could put the question to him then. She added the problem is not unique to Carbonear, as folks all over are facing supply chain shortages.
Councilor Chris O’Grady allowed government will not likely be able to put out standing offers until the supply chain shortages are resolved.
“The government can’t really put out a standing offer because they have no idea really what the price is going to be,” said O’Grady “The problem is there’s no supply, and because there is no supply, prices have skyrocketed. If anyone has a truck now, they can pretty well charge what they want.”
Councilor Peter Snow asked how urgently the town needs the new Public Works vehicle, saying that if the truck is really needed the town ought to expedite the process to get the truck as soon as possible, but if it’s not needed at the moment, perhaps the town could hold off a while before making a purchase.
Farrell said he would prefer the town ‘strike while the iron is hot,’ and get more quotes sooner rather than later.
He said the current Public Works truck is working fine at the moment, but the town has sunk a good deal of money into repairs over the years.
“Which is why it’s on the chopping block to be replaced,” he concluded.
Council agreed to seek additional prices and will make a decision in the future