Canada: City Admits it let SNC-Lavalin through Stage 2 LRT bidding despite Lower Technical Score


By Jon Willing

The City of Ottawa has admitted that it allowed SNC-Lavalin’s bid to continue being considered during the contract competition for the Trillium Line expansion even though the company’s bid didn’t meet the minimum technical score threshold.

City manager Steve Kanellakos sent a detailed memo about the scoring to council. The memo was in response to questions filed last March by Coun. Diane Deans, who, along with a handful of other councillors, expressed concern about a lack of transparency in the Stage 2 procurement process.

SNC, under the project name TransitNEXT, won the $663-million construction contract to build the Trillium Line expansion. The contract value is $1.6 billion when a long-term maintenance agreement for the Trillium Line is included.

The city has been under pressure to disclose more information about how it selected TransitNEXT to extend the Trillium Line to Riverside South and the Ottawa International Airport. There were two other shortlisted bidders, Trillium Link and Trillium Extension Alliance, which were both consortia of several companies.

Council approved the $4.6-billion Stage 2 O-Train expansion work on March 6. The federal and provincial governments are together contributing $2.4 billion for Stage 2 construction.

Another construction consortia called East-West Connectors, made up of the companies Kiewit and Vinci, won the contract for the $2.6-billion Confederation Line expansion project.

However, it was the city’s selection of TransitNEXT that has attracted the most attention, especially when it came to the technical scoring during the bid-review process. A CBC Ottawa report in March, citing unnamed sources, suggested TransitNEXT didn’t achieve the minimum technical scoring threshold of 70 per cent.

The city had been silent on the bid scoring until Friday.

The city laid most of its cards on the table, disclosing the technical and financial scores of the bidders, and confirming for the first time that TransitNEXT didn’t meet the minimum threshold for the technical score.

All three bids for the Trillium Line were “compliant” to the technical requirements in the bid tender, council was told.

However, according to the assessments released to council, the other two consortia blew TransitNEXT out of the water when it came to the technical scores.

TransitNEXT finished with 67.27 per cent, while Trillium Link had 85.78 per cent and Trillium Extension Alliance had 84.91 per cent.

The memo to council explains why the city’s executive steering committee on Stage 2 kept TransitNEXT in the mix after the technical scoring.

“This approach was based on legal advice around the use of discretion in the RFP and it was determined to be appropriate for several reasons, including the fact that the proponent’s technical submission had successfully completed the compliance review and it was advisable to mitigate the city’s exposure to legal challenges,” the memo says.

The memo doesn’t say why the city feared “legal challenges” if it didn’t let TransitNEXT continue in the bid process.

That point is at the heart of why the city thought it needed to keep TranstiNEXT around, despite the company not meeting a minimum technical score.

For this article, we asked the city to explain why it feared litigation. The city couldn’t produce a response on Friday.

The public release of the bid scoring is an about-face for the city, whose lawyers wouldn’t answer councillors’ questions about the nitty-gritty procurement details ahead of the vote on March 6. The city’s legal consultant from the firm Norton Rose Fulbright told council he wouldn’t even answer the questions during a closed session.

In other words, council wasn’t allowed to know anything about the actual bid scores before making a $4.6-billion decision.

The executive steering committee for the project approved by council in February 2017 included city manager Steve Kanellakos, city clerk and solicitor Rick O’Connor, city treasurer Marian Simulik, transportation general manager John Manconi and O-Train construction director Michael Morgan, who took over from Steve Cripps at the beginning of 2019.

Allowing TransitNEXT to continue to the financial evaluation didn’t modify the technical score, council was told.

TransitNEXT blew the other bidders out of the water when it came to the financial scores. When combined with the technical scores, TransitNEXT came out as the highest-ranked bidder and ended up being the recommended contractor for the Trillium Line.

As for questions posed by Deans about whether staff had the authority to let a bidder continue without meeting a minimum scoring threshold, the memo sent by Kanellakos goes into detail about the authority granted to staff by council regarding Stage 2 contract decisions.

Council often votes to delegate authority to staff to make decisions on large projects without having to get the approval of council each time.

Auditor general Ken Hughes is investigating the city’s Stage 2 procurement process and staff’s council-delegated authority on the project.

Council voted 19-3 to award the Stage 2 contracts. Rick Chiarelli, Shawn Menard and Deans were on the losing side of the vote. They couldn’t be reached for comment Friday.

Reacting to the memo on Twitter, Menard wrote: “We had 10 days as a Council to decide on the largest P3 project and debt in municipal history. There were many reasons I didn’t (sic) have confidence rushing forward with this plan, this was one of them.”

On Friday the city also made public redacted versions of the Stage 2 construction contracts. The agreements are published on the city’s website. The city says it redacted portions of the agreements to protect third-party information and commercially sensitive details.

Source-Postmedia
jwilling@postmedia.com

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