National Post (National Edition)
Bus tender goes round and round
An Ontario Superior Court decision ordering Southwestern Ontario Student Transportation Services (STS) to withdraw a request for proposals for school bus services has left the parents of 18,000 Thames Valley District School Board and London Catholic School Board students wondering how their children will be getting to school in the fall.
“As of the end of June, our contracts with one-third of the routes that service our area will expire,” says Dave Williams of London’s Harrison Pensa LLP who represents STS. “We’re going to have to find some way to negotiate a new arrangement in compliance with the law, and although we don’t have the solution yet, we won’t allow the new school year to start without proper transportation in place.”
The school bus case, F.L. Ravin v. Southwestern Transportation Services, is one of the first tests of the Broader Public Sector Accountability Act, a new Ontario statute that spells out mandatory procurement requirements.
In argument before Justice Mary Jo Nolan, Mr. Williams told the court that granting an injunction would affect “all competitive processes in Ontario” by threatening their legal and rational foundations. But in a precedent-setting ruling, Justice Nolan ruled that there is a serious issue as to whether the request for proposals (RFP) contravened the Act.
The Ontario government intervened in the case, arguing that respondents to a tender had no standing to object to the terms of the tender.
“This is the first time an RFP has been stopped by an injunction before it closed over the [education] ministry’s objection that the plaintiffs had no standing to object to the terms of an RFP,” said Jonathan Lisus of Toronto’s Lax O’Sullivan Scott Lisus, who represents the plaintiffs F.L. Ravin Ltd. and The Badder Group Inc.
The case is part of a much broader controversy around student transportation, which has a $1-billion annual spend in Ontario and which was the subject of a task force led by the former associate chief justice of Ontario, Coulter Osborne.
Before STS and similar consortia were established, individual boards of education negotiated student services. “There is no question that the process of negotiation under
This is the first time an RFP has been stopped by an injunction
that regime was not competitive,” Justice Nolan wrote in her reasons granting the interim injunction.
Bus companies continued to provide services in their areas for an agreed price unless significant service problems arose. Because the companies were all part of the same trade association, they did not encroach on each other’s territories.
In the face of this situation, the education ministry took steps to implement a competitive procurement process, including issuing guidelines, contracts and RFP templates. It designated three pilot sites to test the new process and in the interim, told the transportation consortia not to renegotiate contracts beyond the 2011-12 school year, with the expectation that the new procedures would apply generally by the 2012-13 year.
STS was not one of the pilot sites, but it decided to pursue a more aggressive schedule than that ordained by the ministry, and issued an RFP for the 201112 school year. The RFP covered one-third of the STS territory.
When the results were announced, Ravin and other larger firms lost many routes. The winning bids, however, were for rates 20% below what an advance Deloitte study of the STS RFP procedure had recommended as the minimum amounts required for safe and reliable service.
In June 2011, after similar issues arose throughout the province, the ministry imposed a six-month moratorium on the procurement practices and established the task force. STS nonetheless issued an RFP for another one-third of its routes. None of the routes subject to this second RFP affected Ravin or Badder.
Subsequently, on Jan. 8, 2013, STS issued an RFP for the final one third of its routes. Unlike other consortia, STS refused to temporarily withdraw or suspend the RFP. The refusal led to the plaintiff ’s successful claims for injunctive relief.
At press time, it was unclear whether the STS case would be consolidated for trial with a similar case scheduled to be heard in June 2013. If it is not, Justice Nolan indicated that she could set a trial date for the week of Sept. 12, 2013.