Bruce Atyeo’s company, Envoy Relocation Services, is suing the government for $62 million in lost profits and damages over its handling of contracts in 2002 and 2004 to relocate the thousands of military, RCMP and public servants moved to new postings every year.
He claims bureaucrats were biased and knew the bid process favoured the incumbent Royal LePage Relocation Services (RLRS), which has won every contract since the Integrated Relocation Program began as a pilot project in 1999. RLRS changed its name to Brookfield Global Relocation Services in 2009.
But now he is taking aim at the 2009 contract, which was supposed to fix the controversy around the earlier contracts. He argues that the 2009 process was just as flawed and was stacked to rule out all competitors except RLRS.
“Where is the accountability? The bidding process looks like it has been rigged three times. How many times will it take before someone asks what the hell is going on here,” said Atyeo in an interview.
“Does someone want this contract to go to Brookfield so badly that they will ignore the public accounts committee and by extension Parliament?
“That is such a big piece of business for the industry, I can’t ignore that it seems no one else can win it.”
Atyeo has appealed to MPs on the public accounts committee to again investigate the handling of the 2009 contract, as well as the government’s plans when that contract expires in 2014.
The contract is already one of the most scrutinized in recent history and was at the centre of a 16-month civil trial at Ontario Superior Court into Envoy’s allegations about the 2002 and 2004 contracts. A decision is pending.
The public accounts committee first investigated the contract in 2006 after then auditor-general Sheila Fraser’s bombshell report that the 2004 contract was unfair and favoured RLRS. Rather than cancel the contract, the government promised the committee it would be retendered in 2009 when it expired and the option for a two-year extension would be waived. The committee investigated again in 2009 when bidders repeated their complaints about RLRS having the advantage.
Former Liberal MP Shawn Murphy, who then chaired the public accounts committee, said the process never sat right with many MPs.
“Everything troubled me about this one,” said Murphy. “That file was before us a number of times and it was disturbing. It wasn’t done right and all members felt that way. We felt it was a flawed process in both 2004 and 2009.”
“If there was evidence at committee that subsequently proved untruthful, the committee should clearly look at claims and all relevant parties for a full explanation. Anything misleading Parliament is a serious matter... that warrants further review by parliamentary committee.”
The government’s relocation contract is a “king maker” in the industry and the biggest of its kind in North America. The government spends about $500 million a year to help settle the 18,000 or so employees transferred across the country. RLRS, now Brookfield, won the contract in 1999, 2002, 2004 and 2009.
Atyeo argues Public Works and Government Services misled MPs on the public accounts committee in 2009 when they questioned senior bureaucrats about bidder complaints that the tender call had an impossibly tight deadline. The winner would have had to start delivering the service so quickly that no supplier other than RLRS could mount a credible bid.
Public Works bureaucrats assured MPs that the bidding process was fair and that suppliers had the six months industry said was needed to set up an operation to be on equal footing with RLRS which, as the incumbent, already had a system and network of offices. They were also assured that there would be more than one bidder.
At that time, then-Public Works minister Christian Paradis told MPs on the government operations committee that the process was fair.
“What I can tell you is that I am very comfortable being here, today, to be able to tell you that we ‘delivered the goods.’ A tender process is currently underway ... All of the legal timelines are currently being respected. We are fulfilling the commitments that we made before this committee,” said Paradis at a May 28, 2009 meeting.
But documents obtained under Access to Information raise questions about whether the government blessed a request for proposal not only knowing it was unfair, but that it eliminated all competition and effectively gave the deal to Brookfield in a sole-source contract.
Memos and briefing notes show senior bureaucrats were sounding the alarm about delays in issuing the Request for Proposal that would affect the fairness of the competition months before Paradis took the unusual step of asking the cabinet operations committee for an extension.
The contract was being closely monitored by several committees of senior bureaucrats from the key departments — Treasury Board, National Defence, RCMP and Public Works. The original plan was for a draft RFP in the summer of 2008, followed by the final RFP in the November 2008 so the contract could be awarded in June 2009, giving potential bidders six months to ramp up operations for a Dec. 1 starting date.
Bureaucrats were worried as early as fall 2008 whether they had the time to run a fair competition. The schedule went off course almost immediately and slipped further and further behind as the months went by.
By the time it was six months late, François Guimont, then-deputy minister of Public Works, warned Paradis that proceeding with the RFP without some kind of an extension was risky, unfair and would favour RLRS.
“The current schedule must now be categorized as highly aggressive and very ambitious and there is a significant risk that the departments involved... will need to jointly request permission from cabinet to renege on the previous joint commitment not to exercise the available contract extension,” he wrote.”
Senior management had an independent consultant’s report, which concluded after a preliminary review of the RFP, days before it was issued, that the “number one risk” was the time between awarding the contract and starting the service favoured the incumbent and made it “difficult” for other suppliers to compete.
Bureaucrats never mentioned this report to MPs.
Guimont clearly knew how sensitive the deal was because he also noted that despite all the departments’ efforts to “ensure fairness to all potential bidders,” he expected the contract would be challenged no matter who won.
“While it remains a key priority to mitigate the risks of future litigation, our experience tells us that it is highly likely that this new process would be subject to the Canadian International Trade Tribunal complaint and or legal challenge in the courts regardless of the results of the new procurement,” he wrote in a Dec. 15 memo.
Presumably, Paradis took those warnings to the cabinet operations committee on April 20, 2009, when he proposed an extension.
The committee seemingly ignored those concerns. It ordered the tender call to proceed and it was issued eight days later. The deal was again awarded to the newly-named Brookfield, which was also the only the bidder.
The reason why cabinet made that decision has long mystified would-be bidders and some MPs. The contract faced unprecedented scrutiny over the years and the bureaucracy was accused of unfairly handling the bidding process and steering it to RLRS in 2002 and 2004. So why would the government risk such allegations again?
The decision was especially perplexing because the 2009 tender call was supposed to make good on the notorious 2004 contract that Fraser concluded was unfairly stacked to favour RLRS. It was that report that sparked Envoy to sue the government.
It’s unclear why cabinet overlooked the warnings but one factor is that Paradis’ predecessor, Michael Fortier, agreed to the public accounts committee’s recommendation to re-tender the controversial 2004 deal when it expired in 2009 and waive the option to extend the contract for two years. Some MPs wanted to cancel the 2004 contract but were convinced that was a costly and time-consuming option and better to let the contract finish the final two years.
But procurement expert Alan Williams said upholding a political promise should not have come at the expense of the principles of “fairness, openness and transparency” that underpin the integrity of the procurement process and public trust in government. The Conservative government enshrined those principles when it passed its signature Federal Accountability Act.
He said the bureaucrats should have presented a palatable alternative to ministers and if it was ignored a deputy minister should have pushed back and refused to proceed.
“Putting an RFP out that is a sham competition is a moral and ethical issue so there is something fundamentally broken in a relationship that should be built on mutual respect when government takes an approach that is contrary to its best interests,” said Williams, who held senior jobs in federal procurement.
“You don’t know what was said around that table but they seem to have accepted a proposal that undermined their credibility and honesty and that was a big mistake. Better to have spent a few bucks and done it right than to undermine their reputation.”
The bureaucrats did offer options. The military accounts for most of the moves covered by the contract, and National Defence proposed bringing relocation in-house. But it figured it would take three or four years to get ready.
The easiest option was to exercise the contract’s two-year option but that meant reneging on the government’s promise that it wouldn’t. A big problem was that if Envoy successfully won its lawsuit over the 2004 contract, the government could be on the hook for another two years in lost profits and damages if it exercised the contract’s option to extend.
Options included negotiating a shorter extension, say six months or a year, or an extension on an “as needed” basis with RLRS, which would probably want compensation. That still meant reneging on the government’s promise.
Time was critical to the fairness of the competition. Operations for such a large contract can’t be built overnight. The goal was to give would-be suppliers about six months to set up shop, install systems, hire and train staff before taking on 20,000 existing files and 18,000 new moves.
The draft RFP issued in August 2008 gave bidders that six-month ramp-up, between June and Dec 1.
But internal memos show the writing of the RFP took longer than expected. A new, inexperienced team, who hadn’t worked on the previous contract, fell behind designing a bid document and process that was supposed to fix all the problems of the 2002 and 2004 contacts, including the recommendations made by the auditor-general and the public accounts committee.
When the final RFP was issued, the promised six-month ramp-up disappeared. Instead, bidders were offered a three month ramp-up before the contract kicked in on Dec. 1 and a three-month “transition” after that.
But what changed the game was the provision that required the winning bidder to take over 20,000 existing files within several weeks of winning the contract. That clause wasn’t in the draft RFP, and it effectively wiped out all competition. No one but RLRS could be up and running and able to do that.
“I still had some hope and then I hit that clause. I thought ‘What? That can’t be.’ I must have re-read it a dozen times thinking I misunderstood. We would have to start assuming 20,000 files in two weeks. There was no way we, or anyone, could be ready to do that,” said Atyeo.
It’s unclear who authorized the clause or why but Atyeo argued it stacked the race in favour of RLRS.
Atyeo didn’t bid and fired off a letter in May 2009 to the public accounts committee warning them that all new suppliers would be eliminated because of that clause. By that fall, the public accounts committee passed a motion asking the auditor-general to investigate the handling of this contract since 1999.
Fraser, who usually accepted the committee’s request, said she would defer such an investigation until new information materialized.
“I just want to know what happened,” said Atyeo. “Don’t tell me again that this was an accident or incompetence.”
Original Article
Source: canada.com
Author: KATHRYN MAY
No comments:
Post a Comment