City hid contract penalty
Delaying water treatment plant renovations to cost $ 500,000
A decision by Montreal civil servants to suspend $ 12 million in renovation work at a municipal water- filtration plant in Pierrefonds that went nearly unnoticed is resulting in at least $ 500,000 in contract penalties for the city.
What’s more, the incident, which came to light accidentally in early March, is spurring calls for better internal reporting and a review of millions of dollars that are being spent to upgrade Montreal’s water filtration plants.
However, the demand for greater transparency in this case isn’t coming from a member of the public but from city councillors.
“It’s clear the information is insufficient,” said Dida Berku, a councillor in the suburb of Côte- St- Luc and vice- chairperson of the contracts review committee at Montreal city hall. The committee draws its members from Montreal city council and the agglomeration council that includes Montreal and demerged island suburbs because it examines certain contracts at both levels.
It was during a committee session on March 11 to review a $ 3- million contract for architectural and structural work on part of the Pierrefonds water- treatment plant that Berku and other panel members learned that three previous renovation contracts for the plant awarded in late 2012 and early 2013, and worth about $ 12 million, had been suspended by civil servants within Montreal’s water department before the November 2013 municipal election and that the holdup is costing island taxpayers at least $ 500,000.
The matter came up because Berku says she asked a question at the meeting about a $ 30- million contract for renovation work at the Charles- J. Des Baillets water plant that was also put before the panel.
Berku says she asked the civil servants at the session why the city was going with a general contractor for the Des Baillets plant but had broken up the renovation work on the Pierrefonds plant into smaller contracts.
That’s when a civil servant said the previous Pierrefonds contracts, which are for electrical, mechanical and heating and ventilation upgrades, are suspended until the new $ 3- million contract, which is to repair the envelope of the building, is completed.
However, that wasn’t written anywhere in the civil service’s executive summary on the contract. The executive summary that accompanies any resolution of the city and agglomeration councils is the only information councillors have to go on.
“This was the thing that really surprised us,” Berku said. She also learned from the exchange that the decision to suspend the other contracts was costing the city at least $ 500,000 in penalties.
A section labelled “previous decisions” in the executive summary refers to the previously awarded contracts, but doesn’t mention what happened to them. Another section labelled “major impact” makes an oblique reference to delays if the new contract isn’t approved.
The decision to suspend the contracts and incur the cost of penalties didn’t require the approval, or apparently the knowledge, of elected officials.
Andrée- Anne Toussai nt , a spokesperson for the executive committee, said the contracts were suspended under the previous administration in 2013. The executive committee is checking with the water department about what happened and will be able to comment afterward, she said late Monday.
Berku’s panel approved the $ 3- million contract, which was then ratified by the agglomeration council last week, but the panel’s report to council on the contract slammed the process.
“The members were very surprised to learn that several con- tracts worth about $ 12 million had been suspended for a long time,” it said. The panel’s report also describes the vague reference to work delays in the executive summary as “incomplete and practically incomprehensible.”
For Berku, who has been on the panel since its creation in 2010, the case illustrates why the city should broaden the purview of the contracts review committee so it can follow up on contracts that have already been awarded. The executive committee has consistently refused the request.
“That, to me, is the natural evolution of the contracts committee,” she said. “Were they ( past contracts) done on schedule, with extras, with overruns? We’d like to do a performance review after the execution of the contract. And cer- tainly those that come to us now, we want to see how the previous related contracts evolved.”
Berku said the committee will make the same request in its 2014 annual report, to be tabled at the next Montreal and agglomeration council meetings in late April.
The committee also wants more information in the civil service executive summaries, she said.
And because a flurry of multimillion dollar contracts are being awarded to upgrade other municipal water treatment plants, Berku said there’s a need for a reporting mechanism on how those contracts are advancing and where the city’s investment stands.
“The contracts are coming fast and furious for the water- treatment plants, and I think it’s time we had some sort of plan to see how they ’re approaching these projects,” she said.
The contracts are coming fast and furious for the watertreatment plants, and I think it’s time we had some sort of plan to see how they’re approaching these projects.
DIDA BERKU