BIG PAYOUTS FOR FAILED BIDS,

The Saskatchewan government is standing by its practice of paying out millions of dollars to companies that submit failed bids on provincial construction projects.

“It’s a standard part of P3 practice that honorariums are paid to unsuccessful bidders,” SaskBuilds Minister Gord Wyant said.

In 2015-16, Saskatchewan paid private companies $5.6 million for unsuccessful bids on provincial P3 projects.

According to Wyant, that equals about 30 per cent of the total design cost in a public-private partnership project. In other words, 30 per cent of the cost paid for the design of P3 projects is for designs that were not used.

“It’s not an unknown protocol with respect to other design-build contracts as well.”

“So it’s not unique to P3s, but typically those honorariums are paid to the unsuccessful proponents,” he told a legislative committee last week.

In exchange, according to Wyant, the proprietary information prepared by the companies becomes the province’s.

“It’s important to remember that the people that are bidding on these contracts put a significant amount of time and energy and resources into preparing their bids, and so it’s a standard part of P3 practice that honorariums are paid to unsuccessful bidders,” he said.

Two payments of $300,000 were made for failed bids on the Swift Current long-term care facility. The new North Battleford hospital involved two payments of $500,000.

The Regina Bypass project paid three companies $1.5 million for failed bids. Payments were also made for failed bids on the province’s joint-use schools.

According to the premier’s office, the practice is a standard one — followed by NDP governments in the past — and also applies to projects not funded through the P3 model.

Payments are made, according to a government spokesperson, because private-sector competition is key to project savings and bidding on large projects is “risky and expensive for the private sector, which discourages competition.”

Wyant told reporters Monday that his “suspicion is if we didn’t pay the honorarium, we wouldn’t get people to bid” and that, overall, P3 projects are cheaper than traditional builds.

NDP SaskBuilds critic Cathy Sproule questions if the money being spent on unsuccessful bids is a justifiable expense given the “cold-hearted” cuts made by the provincial government recently.

She noted the companies that receive the payments are typically multinationals and not based in Saskatchewan.

“We see really large companies putting together these bids,” she said. “I don’t know if those are the people who need the money the most.”

MICHAEL BELL Three companies that submitted unsuccessful bids for the Regina Bypass, now under construction, were paid $1.5 million as a means of compensation for ‘risky and expensive’ work in their bid proposals.