Commentary: Do away with messy public tenders, pre-approve instead (October 26, 2016)

by Dermod Travis,


News that’s guaranteed to cheer the hearts of a small number of B.C. companies is word that they’ve been added to a list of pre-qualified suppliers to the B.C. government.

The lists are intended to offer all the appearances of open and transparent procurement. They can be anything but.

It’s one way to get around the bad optics of sole-sourcing too many public contracts.

You can imagine the minister’s briefing note: “We chose from a long list of well-qualified firms who were put through a rigorous vetting process by the ministry.”

Two wrinkles: what companies are on those lists and what criteria are used to pre-qualify them?

Like a private club, the government is reticent to disclose the names, which makes it difficult to know whether there’s a wee bit of favouritism in compiling them, how other companies stack up and whether B.C. is getting best value for its dollar.

From a B.C. Hydro response to a 2016 freedom of information request: “We are not providing information on secondary sourcing contracts where (BC Hydro) has previously established a list of pre-qualified suppliers or contractors…”

One thing is for sure: keep your membership in good standing and the lists keep on giving and giving. The same names keep popping up year after year in the Public Accounts.

You’d expect to find pre-qualified lists in the Ministry of Transportation and Infrastructure (MOTI) for road improvements, potholes and the like.

In 2014/15, MOTI awarded 478 contracts of $10,000 or more worth $322.1 million.

Fifty-two companies took home 168 of the contracts totalling $233.8 million, nearly three quarters of the haul.

Coincidentally, those 52 companies have donated $1.2 million to the B.C. Liberal Party since 2005. One company was awarded 16 contracts worth $7.9 million. They donated $111,000.

The 25 largest contracts – ringing in at more than $189 million – went to 14 companies. All but one – a Quebec-owned company – are party donors. Collectively they’ve given more than $220,000.

How many of the 52 are on a pre-qualified list is anyone’s guess. Hush hush.

Seven of the 52 companies did pass the hat and found $31,685 for the B.C. NDP, with 90 per cent of it ($28,695) flowing into the party’s coffers over a nine month stretch from September 2012 to May 2013.

Scuttlebutt has it the government wasn’t so amused about those donations post-election. Only one of the seven has donated since.

Don’t think donations are intended to influence decision makers? Think again.

The Ontario Municipal Employees Retirement System (OMERS) doesn’t donate “in cash or cash equivalent” to political parties, but it does buy tickets that may have “a fundraising component to them.”

There was likely a smidgen of a fundraising component to the $7,000 they paid for “an evening with Mike de Jong” last year, also one with the $3,500 for golf with Premier Christy Clark last fall and the $5,000 for dinner with Norm Letnick and Clark last November.

Full marks for transparency, though.

OMERS actually put its justification for buying high-priced tickets down in writing: “Participation in the political process may be directly relevant to minimizing risk and achieving investment objectives.”

Coincidentally, in 2013, OMERS was seeking the government’s approval of a proposed merger between its LifeLabs Medical Services and B.C. Biomedical Labs.

Notwithstanding then-Health minister Margaret MacDiarmid’s concerns over whether it “could result in a substantial reduction of competition,” the approval came through in lickety-split time, 76-days later.

If donations don’t count why go to all the trouble of breaking Canada’s Elections Act to make them, as SNC-Lavalin did at the federal level through an elaborate scheme stretching from 2004 to 2011?

In its compliance agreement with Elections Canada, SNC-Lavalin “acknowledges that, in offering to reimburse its employees for federal political contributions, and in reimbursing such contributions, it was in fact making those contributions itself.”

SNC-Lavalin won two MOTI contracts worth $1.25 million. They’ve donated $27,647 to the B.C. Liberals.

Everything may be on the up and up in B.C. At least that’s what Natural Gas Minister Rich Coleman says.

Last spring Coleman stated: “If you want to donate to a political party, you can donate to a political party. But if you think you’re buying anything, you’re not.”

Martyn Brown, former chief of staff to Premier Gordon Campbell begged to differ: “(Donations) make the government stand up and listen and anybody who pretends otherwise is not telling the truth.”

It certainly doesn’t instill confidence in the government’s procurement efforts when the 2014 core review into Partnerships B.C. noted: “More than half of the contract files reviewed did not contain adequate documentation such as the justification for hiring the successful contractor, the reasons for direct awarding contracts to individuals and small firms or the rates paid.”

Mind you tossing a photocopy of the donor’s cheque in the file might not work either. Could open up a whole can of worms.



Dermod Travis is the executive director of IntegrityBC.