Red flags after snow clearing bids disqualified
More than half of city contracts awarded to only remaining bidder
Three years after the inspector general of Montreal revealed patterns of collusion in municipal snow-clearing work, the city has just awarded 16 contracts that suggest the same patterns still exist, the opposition at city hall contends.
“We’re still seeing the tendencies of what could be perceived as collusionary activity,” said Lionel Perez, leader of Opposition party Ensemble Montréal, the renamed political formation once led by former mayor Denis Coderre. Perez said he’s calling on the Inspector General’s Office to conduct a followup to its 2015 investigation.
The latest contracts, worth $79 million combined, were awarded at a Montreal city council meeting last week for the district of Côte-des-Neiges and the boroughs of Montreal North, St-Léonard and Ville-Marie.
Each contract elicited multiple bids, but most of the bidders wound up being disqualified in each case, and always for the same reason: they didn’t submit a standard service guarantee with their offer.
As a result, nine of the 16 contracts had one bid left after the rest were disqualified, and the one bidder in each case won the contract.
Another six contracts were left with two bids for the city to choose from after the other offers were disqualified, and the remaining contract had three bids left after two others were disqualified.
Providing a service guarantee, which is essentially an insurance policy in case the contractor is unable to complete the work they start, is standard procedure, Perez said. He was responsible for infrastructure as a member of the city executive committee under Coderre.
“It’s a normal thing to do, so I don’t know why it was an issue here,” he said.
He added that he found no other contracts in the past two years where bidders disqualified themselves by not providing a service guarantee.
“It’s feasible that this is potentially another mechanism that if bidders wanted to direct certain contracts to certain companies, they ’d be able to do so,” Perez said.
The members of Perez’s party nevertheless voted in favour of awarding the contracts after raising their concerns in council.
“Unless we have direct proof, which is very difficult to have, we don’t want to presume anyone guilty,” he said. “But what we are saying is we want the administration to do more, to have more investigations, to report more to the elected officials and to reassure the population that they’re going to scrutinize the procurement process for snow clearing as much as they can because of all of the issues we’ve had in the past.”
For its part, the administration of Mayor Valérie Plante said each contract was awarded to a conforming bid that respected the tender specifications.
The administration also pointed to the benefits of awarding the contracts well before winter begins. Quoting from the civil service report, administration spokesperson Geneviève Jutras wrote in an email on Monday that awarding the contracts now allows the city time to inspect and register the entrepreneurs’ equipment and inform the boroughs about the specifications.
The lead time also allows the entrepreneurs to plan and organize their activities before the first snow, something that was recommended by the inspector general in its 2015 report, the message said.
But Perez pointed to a batch of snow-clearing contracts that his former administration awarded in August 2017 that garnered competition from several bidders.
One contract, for the Rivièredes-Prairies district, elicited six bids, while two contracts for the Sud-Ouest borough elicited five and six bids. A contract for the Ahuntsic district elicited eight bids. None of the bids were disqualified.
For the contracts awarded last week, some showed a big discrepancy between the lowest and highest bids, Perez said, adding that it was a red flag in the inspector general’s 2015 report.
For example, on four of the contracts that were down to two bids after the others were disqualified, the higher bid was double, and even almost triple, the price of the lower bid.
There were also some gaps between the bids and the city’s estimates for the work.
The winner of five of the six contracts that were up for bids has won the snow-clearing contracts in Côte-des-Neiges—Notre-DamedeGrâce since the winter of 19951996, the civil service report says. The company didn’t bid in other sectors of the city.
The firm’s bids were 15 per cent to 39 per cent above the prices the city estimated for the contracts before going to tenders.
The discrepancy also went the other way.
Three contracts were awarded for Ville-Marie borough, two of which went to a company that last had city contracts in the 1990s. The company was the last remaining bidder in both cases after the others were disqualified.
The company’s bids were 31 per cent and 29 per cent below the city’s estimates for the work. That prompted a caveat from the civil service, which wrote: “The low price coupled with the lack of experience of the contractor represent a risk that will be addressed from the beginning of fall at the kick-off meeting (between the city and contractor).”
In Montreal North, one of the contracts elicited five bids, of which four were disqualified. The remaining bid of $2.75 million was a virtual match for the city’s estimate — it was off by $7,914 or 0.3 per cent.
Like a big discrepancy, a near price match is also something to examine, Perez said.
The civil service report indicates that a 17th and 18th contract were cancelled because the lowest qualifying bid in either case was 144 per cent and 185 per cent above the city’s estimate. Those calls for tenders were to be redone.