The City of Penticton’s procurement policy may not have been followed, but the installation of LED lighting at the South Okanagan Events Centre and other arenas was not a quick decision, according to the facility management.
The city has come under fire for allowing Spectra, which manages the SOEC complex for the city, to enter into a $233,000 contract for LED lighting in the three arenas without going to tender first. City policy mandates that purchases over $50,000 go through a tendering process.
“We didn’t rush into this at all,” said Dean Clarke, regional vice president for Spectra, noting that there were about 18 months of evaluation, research and testing.
Clarke said Spectra initially interviewed three LED lighting suppliers. In one case, they didn’t like the product, and the price was too high in the other cases.
“The cost to do this project was well beyond what the city was willing to pay,” said Clarke. The project was going to be shelved, he added, when they were introduced to an Australian LED system, being distributed locally by Lumalex Canada.
Rob Campbell is managing partner at Lumalex, and was formerly a partner in the Trio Marine Group. Mayor Andrew Jakubeit denies that the lack of a formal request for proposals was a sign of preferential treatment, but an oversight due to the drawn out process, and excitement that the Lumalex proposal was $233,000, less than half what had been earmarked.
“I think the problem was it was budgeted to be over $500,000 and it was literally half that. I think people were excited there was going to be significant cost savings,” said Jakubeit, adding that council should have held a vote on whether to sole-source the contract.
“The fact of the matter was we had a written quote for almost half a million dollars and a local business came and said ‘I think I could put LED lights in there and save you some money’,” said Jakubeit. “Then he came back with a quote for the entire complex, which was half of what we had seen in the past, and projections of energy efficiency. I think that kind of clouded our better judgement.”
Clarke contends that in the end, going with Lumalex was a good decision. He said they were skeptical of the Lumalex system, but decided to test the light in one of the arenas.
“We put the light through its paces to see if it would work, because it was more of a warehouse light rather than a sport lighting package,” said Clarke, explaining that SOEC staff co-ordinated with city staff in the process. “We put the lights through a significant multiple-month test.”
The results of that test, he said, showed that Lumalex could do the job, and at a lower cost. That, plus being able to negotiate a “bumper-to-bumper” warranty for the life of the bulbs, Clarke continued, made it a good contract.
“I understand we did not follow the exact protocols, but this will, when it is all said and done, be one of the best purchases, one of the best capital projects at the SOEC complex,” said Clarke.
Colin Fisher, the city’s chief financial officer, admits city policy was not followed. The problem he said, was not with the controls in the city policy, but a lack of adherence to those controls.
“It has now been made clear that Spectra has to comply with the city policy,” said Fisher.
Jakubeit added that all the city’s partnering agencies have been reminded they are responsible to follow city policy.
Clarke said projections are the LED lighting switchover is generating savings of between $4,000 to $7,000 per month. He added added that other facilities, both Spectra-managed and not, have not been seeing similar savings through their conversions to more expensive LED lighting packages.
“We ended up in the end with the cheapest lights and the most efficient lights,” said Clarke, who added that in order to have a true understanding of the light’s performance, they will need a full year of data to evaluate. At that time, he expects the value of the contract to full prove itself in full.