In a terse request for proposals posted Monday on the electronic tendering site MERX, Public Works and Government Services Canada invited bids from pre-qualified suppliers for the audit. Bidders have until Aug. 29 to submit proposals.
The document provides only the barest information about the audit, saying only that its purpose is “to get an audit opinion and professional compliance and assurance audit services related to contractual payments and compliance with tendering procedures for three large construction management contracts” issued by Public Works’ Parliamentary Precinct Branch.
Though requests for proposals typically provide extensive information and background about the project involved, in this case Public Works said details “will be emailed directly, from the contracting officer, to the qualified supply arrangement holders who are being invited to bid on this requirement.”
In an email late Monday afternoon, the department said the three construction management contracts in question relate to the rehabilitation and renovation of Parliament’s West Block, the Wellington Building at 180 Wellington St. and the Sir John A. Macdonald Building (formerly the Bank of Montreal Building) at 144 Wellington St.
Work is under way at the three buildings as part of the federal government’s estimated $5-billion restoration and modernization of the crumbling Parliament Buildings and other structures within the Parliamentary precinct.
PCL Constructors Canada Inc. of Ottawa won the contract to manage the ongoing restoration at the West Block, involving $385.5 million of work. Another Ottawa firm, EllisDon Corporation, is managing $143-million of work at the Wellington Building and the $66-million rehabilitation of the Sir John A. Macdonald Building.
In its email, Public Works said all three contracts contain clauses that allow the department to review payments as well as compliance with tendering procedures. In asking for an audit, the department said it is “voluntarily seeking third-party assurance in the verification of contract payments, over and above the due diligence applied in its day-to-day contract financial management.”
The decision to hire an outside firm to conduct the audit mystified New Democrat MP Pat Martin, who chairs the House of Commons’ government operations committee, to which Public Works is answerable.
“The department has ample checks and balances to provide oversight and scrutiny on the procurement of goods and services, up to and including the ultimate watchdog, the auditor general,” Martin said.
He said the decision “smacks of an attempt to examine this without drawing too much attention to it. The only reason I can think of for going outside is they want some control over the final output. And that doesn’t meet any kind of test of prudence and probity that we’d want to see.”
Martin said only the auditor general can provide “the real skinny,” adding: “When you hire an outside auditor, you get some input in steering results. Maybe they want to do a pre-emptive strike here instead of letting the auditor general find it later.”
There’s great potential for embarrassment in the Parliamentary precinct work, Martin said. “We’re witnessing the genesis of a boondoggle, and I think maybe people are starting to get spooked as the price explodes.”
The restoration project has already generated its share of controversy.
In 2010, the RCMP launched an investigation into the relationship between a Montreal construction firm, LM Sauvé, and Gilles Varin, a Conservative fixer and lobbyist. LM Sauvé won an $8.9 million contract to renovate the West Block’s north tower in 2008, but after problems on the site, Public Works revoked the contract.
The company got the contract even though it had sought protection from creditors and its president, Paul Sauvé, was the former partner of Norman Ouimet, a Hells Angel now facing 22 murder charges.
In 2010, Sauvé told a House of Commons committee that he believed his firm was awarded the contract because he paid Varin $140,000 to open doors for him in Ottawa, something Varin denied.
Last year, then auditor general Sheila Fraser said she “would not be at all surprised” if the $5-billion cost of the renovation project rises in coming years. The first five-year phase of the project ends this year, but it’s expected to take 25 years to complete all the work.
The same day that Fraser made that comment, the government announced that the cost of renovating the 156-year-old West Block alone had risen to $863 million, an increase of $94 million since 2005.
According to spending estimates released in May, the government will spend nearly $600 million on the renovation project this fiscal year, primarily on the West Block and the 87-year-old Wellington Building.
Martin said the Parliamentary precinct projects “have been out of control for quite some time. Everybody wants to know why things take 10 times as long and cost 10 times as much.”
No amount of outside auditing will get to the root of the problem, he said, which is “too many cooks in the kitchen spoiling the broth. It’s a dog’s breakfast of overlapping jurisdictions that seems to paralyze progress.”
Asked about the audit Monday, Steve Smith, area manager for EllisDon, said “we don’t know anything of it.” He said EllisDon is in the early stages of both projects and has not yet started to hire any contractors.
A spokesperson for PCL referred the Citizen to John DeVries, the president and general manager of the Ottawa Construction Association. DeVries said he’d heard nothing about any problems with the three contracts, saying both firms are “highly competent and highly ethical.”
But he said the controversy over LM Sauvé’s contract had “created an environment for everyone else.” Public Works is “on pins and needles” about any money spent on the renovation project, he said. “They’re looking probably for (auditing firm) KPMG or someone really just to make sure everything is good.”
Twenty years ago, DeVries said, Public Works would have handled something like this internally. But now, he said, “they just don’t have the staff to look into all those things. They’re lost all their construction experts to the private sector or retirement or downsizing.”
In a release last year announcing the award of the West Block contract to PCL, Public Works said the main reason it was hiring a company to manage the work was to enable multiple construction firms to work on the building at the same time while maintaining clear responsibility for health and safety. “This is critical to completing this major project in a timely manner,” the department said.
The West Block, which has been empty since January 2011, was the first building chosen for rehabilitation because of its advanced state of deterioration. Restoration of the masonry has been completed on the north and southeast towers, but the full restoration won’t be finished until 2017.
The first phase of the Wellington Building renovation and modernization began in 2010 and a second phase — which includes the addition of 69 parliamentary offices and 10 committee rooms — began this year.
The former Bank of Montreal building has been vacant since 2005. Work on its rehabilitation began this year and is scheduled for completion in 2015.
Original Article
Source: ottawa citizen
Author: Don Butler
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