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2014-05-05 01:08:21 UTC
Ottawa Citizen - May 4, 2014
Auditor general readies report on relocation-contract mess
OTTAWA – Auditor General Michael Ferguson’s report this week into the
contracting process for a 2009 deal to relocate thousands of
bureaucrats, military and RCMP will the latest instalment in one of the
most complicated, investigated and longest-running procurement disputes
in decades.
The awarding of the 2009 contract was supposed to fix the controversy
and allegations of bid-rigging around two previous relocation contracts.
Instead, the deal ended up mired in accusations of unfairness.
The auditor general’s spokesperson, Ghislain Desjardins, said the office
regularly examines procurement issues and the 2009 contract was flagged
as an “area of higher risk and interest to Parliament and Canadians.”
The Integrated Relocation Program, developed by Treasury Board, costs
the government about $500 million a year to relocate employees – not
including moving costs, which are covered by another contract. The
government relocates between 15,000 and 20,000 federal employees a year,
with military moves accounting for about 85 per cent of those moves.
The relocation contract, dating back to 1999, is already one of the most
scrutinized deals in recent history.
The handling of 2002 and 2004 contracts has already cost the government
millions, after an Ontario Superior Court judge found bureaucrats rigged
the contracts to favour Royal LePage Relocation Services (RLRS) – now
Brookfield Global Relocation Services.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
The court ordered the government to pay an unprecedented $40 million to
the losing bidder, Envoy Relocation Services. (Although the government
filed notice to appeal the decision, it has since reached a settlement
with Envoy for an undisclosed amount.)
In fact, then-auditor general Sheila Fraser delivered a bombshell report
that triggered the lawsuit. She found that the 2004 relocation bidding
process was unfair and used wrong business volumes that favoured
Brookfield. Brookfield has held the contract since 1999.
Rather than cancel the 2004 contract, then-Public Works Minister Michael
Fortier promised to re-tender when the contract expired in 2009. That
contract was supposed to fix all the problems and plug the contracting
weaknesses that had derailed the 2004 contract.
But Envoy President Bruce Atyeo argued the 2009 contract was also unfair
and stacked to rule out all competitors except RLRS. He appealed to the
House of Commons’ public accounts committee to investigate the handling
of the 2009 contract and the government’s plans upon expiry.
Atyeo argued that Public Works and Government Services misled MPs in
2009 about bidder complaints that the tender call had impossibly tight
deadlines. The winner would have had to start delivering the service so
quickly that no supplier other than RLRS could mount a credible bid.
Indeed, in the end, no firm other than winning bidder RLRS – now
Brookfield – submitted a bid.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Documents obtained under Access to Information raised questions about
whether the government decided to proceed with a request for proposals
knowing it was unfair, effectively eliminating all competition other
than Brookfield. Memos showed senior bureaucrats were sounding the alarm
with politicians about delays in getting the RFP out that would affect
the fairness of the competition.
The auditor general’s office is now reviewing the 2009 contracts in two
parts. The first focuses on whether key players – Public Works, Treasury
Board Secretariat, National Defence and the RCMP – followed all the
contracting rules.
The second part, expected in the fall, will examine the delivery of
relocation services.
The studies come at a time when the program is up for review. The
military’s “final move” policy landed Lt.-Gen. Andrew Leslie in hot
water for claiming $72,000 in expenses by using a benefit that allows
all long-serving Canadian Forces members one final paid move when they
retire.
The existing contract expires this year and the government had
originally planned to issue an RFP in January, with a new contractor in
place by December. It’s unclear what’s behind the delay, but Public
Works and Government Services Canada said, “the government continues to
consider its business requirements and options, as a result of a number
of consultations with industry.”
By the numbers:
$2.45 billion: Estimate total value of relocation contracts over five years.
$500 million: Estimated total relocation costs per year.
Up to 20,000: Number of public servants, military and RCMP moved per year.
$30 million: Annual administration fee the contractor charges government.
One: Number of bidders for the 2009 contract. The only bidder, and
winner of the contract, was Brookfield Global Relocation Services.
Formerly known as Royal LePage Relocation Services, it has had the
contract for 14 years.
_________________________________________
"A million here . . . a million there . . . after a while it starts to
look like real money".
Auditor general readies report on relocation-contract mess
OTTAWA – Auditor General Michael Ferguson’s report this week into the
contracting process for a 2009 deal to relocate thousands of
bureaucrats, military and RCMP will the latest instalment in one of the
most complicated, investigated and longest-running procurement disputes
in decades.
The awarding of the 2009 contract was supposed to fix the controversy
and allegations of bid-rigging around two previous relocation contracts.
Instead, the deal ended up mired in accusations of unfairness.
The auditor general’s spokesperson, Ghislain Desjardins, said the office
regularly examines procurement issues and the 2009 contract was flagged
as an “area of higher risk and interest to Parliament and Canadians.”
The Integrated Relocation Program, developed by Treasury Board, costs
the government about $500 million a year to relocate employees – not
including moving costs, which are covered by another contract. The
government relocates between 15,000 and 20,000 federal employees a year,
with military moves accounting for about 85 per cent of those moves.
The relocation contract, dating back to 1999, is already one of the most
scrutinized deals in recent history.
The handling of 2002 and 2004 contracts has already cost the government
millions, after an Ontario Superior Court judge found bureaucrats rigged
the contracts to favour Royal LePage Relocation Services (RLRS) – now
Brookfield Global Relocation Services.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
The court ordered the government to pay an unprecedented $40 million to
the losing bidder, Envoy Relocation Services. (Although the government
filed notice to appeal the decision, it has since reached a settlement
with Envoy for an undisclosed amount.)
In fact, then-auditor general Sheila Fraser delivered a bombshell report
that triggered the lawsuit. She found that the 2004 relocation bidding
process was unfair and used wrong business volumes that favoured
Brookfield. Brookfield has held the contract since 1999.
Rather than cancel the 2004 contract, then-Public Works Minister Michael
Fortier promised to re-tender when the contract expired in 2009. That
contract was supposed to fix all the problems and plug the contracting
weaknesses that had derailed the 2004 contract.
But Envoy President Bruce Atyeo argued the 2009 contract was also unfair
and stacked to rule out all competitors except RLRS. He appealed to the
House of Commons’ public accounts committee to investigate the handling
of the 2009 contract and the government’s plans upon expiry.
Atyeo argued that Public Works and Government Services misled MPs in
2009 about bidder complaints that the tender call had impossibly tight
deadlines. The winner would have had to start delivering the service so
quickly that no supplier other than RLRS could mount a credible bid.
Indeed, in the end, no firm other than winning bidder RLRS – now
Brookfield – submitted a bid.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Documents obtained under Access to Information raised questions about
whether the government decided to proceed with a request for proposals
knowing it was unfair, effectively eliminating all competition other
than Brookfield. Memos showed senior bureaucrats were sounding the alarm
with politicians about delays in getting the RFP out that would affect
the fairness of the competition.
The auditor general’s office is now reviewing the 2009 contracts in two
parts. The first focuses on whether key players – Public Works, Treasury
Board Secretariat, National Defence and the RCMP – followed all the
contracting rules.
The second part, expected in the fall, will examine the delivery of
relocation services.
The studies come at a time when the program is up for review. The
military’s “final move” policy landed Lt.-Gen. Andrew Leslie in hot
water for claiming $72,000 in expenses by using a benefit that allows
all long-serving Canadian Forces members one final paid move when they
retire.
The existing contract expires this year and the government had
originally planned to issue an RFP in January, with a new contractor in
place by December. It’s unclear what’s behind the delay, but Public
Works and Government Services Canada said, “the government continues to
consider its business requirements and options, as a result of a number
of consultations with industry.”
By the numbers:
$2.45 billion: Estimate total value of relocation contracts over five years.
$500 million: Estimated total relocation costs per year.
Up to 20,000: Number of public servants, military and RCMP moved per year.
$30 million: Annual administration fee the contractor charges government.
One: Number of bidders for the 2009 contract. The only bidder, and
winner of the contract, was Brookfield Global Relocation Services.
Formerly known as Royal LePage Relocation Services, it has had the
contract for 14 years.
_________________________________________
"A million here . . . a million there . . . after a while it starts to
look like real money".