Please see feedback …

Please see feedback (comments, questions, and recommendations) in regards to MTO TCP Notice. No. 000-0141 on: New SSP 100S72 Payment Adjustment for Changes in the Steel Price Index. - Supporting attachments where applicable are provided.

01 - Typically, we will subcontract the related steel items to different subtrades. That is structural steel, h-piles and r-steel will be different subcontractors. For r-steel we can also get two different subcontractors, for example Harris doing the bridge work and Bauer doing the caissons including r-steel in his subcontract. What happens if some subcontractors want to opt out and others don’t?

02 - Also does this apply to pre-stressing strand and r-steel for prestressed girders, and r-steel for other precast concrete products such as concrete culverts?

03 - The definition does not include all types of metal piles. How do we ensure that all metal piles are included? For example: Helical Piles, micro piles, etc... Perhaps a more generic definition that would account for any metal pile would be more appropriate.

Since rebar and structural steel is also included in this specification, should there be a definition OR since there could be several different types of steel product (expansion joints, girders, plates, poles, steel beam guiderail, etc...) should there be a generic definition of metal products?

04 - It would be helpful if the specification provided a more specific website addresses and some direction as to how to find the steel price index.

05 - Not sure how the steel identified in table 1 will be populated.
What happens if the steel we are considering to purchase is not in the list?

06 - The payment adjustment for changes in the steel price index shall be applied only when the difference between the published steel price index in the month and year for when the steel adjustment is made, and the published steel price index in the month prior to tender closing is great (add er to the end of the word "great") than or equal to a 10% difference.

07 - The payment adjustment for reinforcing steel bars, and piles shall be calculated and applied based on the month of installation into the Work.
- Why is this only for rebar and piles?
- If the rebar is to be based on the month when the installation takes place could this cause cost differences if the material was purchased for a specific scheduled installation but the project was delayed and the rebar is installed significantly later?

08 - The definition for R includes values for steel that can vary.
Should we identify an index or something like that to be
reference as a value of material?

NOTES TO DESIGNER:
What about other steel like Girders, expansion joints, plates, poles, sign structures, steel beam guiderail, etc.? Some of these are not structure related but still involve significant quantities of steel.

09 - Why is stainless steel not included? Can we not reference a different index number and apply to the same formula?

10 - Does this only apply to tender items specific to the steel products listed? Does it apply to prestressing strand and reinforcing steel for girders, and reinforcing steel for other precast concrete products such as culverts? What about other embed items like bearing plates?

11 - Why is the adjustment only made after a greater than or equal to 10% difference? Payment adjustment criteria for Asphalt Cement is half, set at greater than 5%. A 10% change in the index pricing over a 6 month span is only really applicable to the recent volatile period from 2020-08 to 2021-06. Similarly over a 12 month span it only occurred 28 times from 2010 to 2023. It’s not until you look at a 2 year time frame that it becomes increasingly relevant (Approx 30% of the time). Even then most Suppliers and Contractors would only carry a 5% escalation not 10%.

12 - Why is the formula set up to only paid out for the amount above 10%? If you have a 12% increase (or decrease) you only get 2% compensation.

13 - How is the reference price (R) determined? $700/tonne is low for rebar based on current market prices. There should be an adjustment for R. i.e., R=(It x 700) / 100 assuming $700/tonne is the value of rebar when the index number is at 100.

14 - .10 It is unclear why this is required. The formula for Ip>It is confusing. Why is R divided by 100? Should the index number difference not be divided by 100? I.e., Cspa = Qs x R x [Ip- (1.10 x It)]
100

15 - The Ip < It formula is confusing as well.
A = (0.9 x It)-Ip, but the formula reads in reverse [Ip – (0.9 x It)]. We understand this is to provide a negative value for Cspa, but why not state for clause .11 that if Ip > It then the value of Cspa should be credited to the Contractor and if Ip < It the Contractor shall credit the Owner the value of Cspa?

09 - We need a copy of the index for “Basic and semi-finished products”.

10 - This is written well for H-pile, or predesigned structural steel (WWF beams) where the bid item is in “tonne”. Note that bid items for supplier designed girder bridges and modular bridges is typically “lump sum”. How would this be handled?

11 - Aside from some spelling and grammar in .06 and .07, respectively, we have the following:
For .07 and .08, the timing of when the payment adjustment should apply does not match when our prices are set in Contracts. The steel adjustment index should be determined at the time the supplier orders from the mill. We often order piles, and reinforcement, months or in some cases over a year in advance of installation (especially for staged jobs). For this SP to reflect accurately price escalations (or reductions) that we realize, the index comparison should be the difference between steel prices at the time of quote (just prior to tender close), and the time that we're locked in with the supplier. The period of time where everyone is exposed is from when the job is awarded and we issue purchase orders at the quoted prices, and when all shop drawings are finalized and the material is actually ordered. Especially for structural steel, this can be a long period, and the suppliers determine their price increases from when they order the plate. We're just trying to avoid a situation where we opt in, order piles and take delivery 6 months in advance of their installation with no price changes, then steel prices plummet prior to the installation and we are required to pay a credit to the Ministry that we can't pass on to our supplier.

The reference prices should not be prescribed, and they should be broken down further. Structural Steel, H-Pile, Sheet Pile and Tube Pile have drastically different prices/tonne, there should be a separate reference for each.

Also, reinforcement should be broken down into stainless and black. Regarding the prices in the SP, they are not representative of current prices, they are too low. A more accurate amount for H-Pile currently is closer to $2000, and for sheet and tube pile it's well over that. It would be better if we could either accept the prescribed R, or submit a price for these such as what we do with AC. We understand that the SP is trying to capture the raw cost of the material, which we agree should be the same for at least the non-rebar items, but the price movements we see do not support that.

09 - .03 needs more clarity.

20 – WARRANT: Does this no mean that H-Piles, tube piles ans sheet piles will now have a supply item?