LRT Stage 2

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In my most recent column two weeks ago, I spoke of the current climate at City Hall. If you have not had a chance to read that one, I encourage you to do so because it will help you understand some of the dynamics surrounding the LRT Stage 2 debate in recent months. This column is entirely dedicated to the Stage 2 contract, which was awarded earlier this year to TransitNEXT, a wholly owned subsidiary of SNC-Lavalin. The timeline for this contract happens to span the last three terms of Council, including the present one.

 On December 19, 2012, Council approved the Design, Build, Finance & Maintenance of Ottawa’s Light Rail Project, otherwise known as Stage 1. The procurement model for Stage 2 was adapted from Stage 1. On March 8, 2017, Council approved a report on “Stage 2 LRT Implementation” which included the procurement model for both the Confederation Line extensions and the Trillium Line extension. The Trillium Line is the extension of the existing north-south O-Train line. The Confederation Line is the east-west line. The Trillium Line extension has been the contentious one and that is what I will focus on.

The debate at Council in March 2017 centred mainly on the acquisition of property and the extensions themselves. Members of Council did not discuss the procurement model. While motions were tabled at the Council meeting, no motions were brought forward that would have altered the procurement model and the delegated authority to staff. In short, Council unanimously approved the process that eventually selected TransitNEXT as the builder for the Trillium Line extension as is. This is important considering the entire debate recently has been about the procurement model.

The procurement process took over two years. The first step was a Request for Qualifications (RFQ). The RFQ resulted in three groups that were shortlisted to bid on the Trillium Line. In order to make it through the RFQ, the bidders had to show the technical expertise required to carry out the project. Only successful bidders carried through to the Request for Proposals (RFP) phase. TransitNEXT was one of them. As a result, the technical merits of the bidders were not a concern at that time.

When the RFP award came to Council in March of this year, the procurement process was still open. That means there were key elements that had to remain confidential. Releasing that information could have jeopardized the Council approved procurement process. It was not until recently that the procurement process closed and the scores could be released. The main point here is that the other two bidders have now signed off on the procurement process thus removing any potential liabilities, in terms of lawsuits. Members of Council knew this in March. Therefore, when some members of Council were seemingly surprised they could not learn the scores, they knew why. This is where the theatre of politics rears its ugly head.

If you recall that March 2019 meeting of Council, you will recall the doubt that was planted regarding TransitNEXT’s ability to perform. Several Councillors kept asking similar questions repeatedly about the procurement process and the scoring. Staff could not answer for the reasons mentioned above. Of course, Council knew this. After all, we approved the procurement process unanimously two years earlier. New Councillors elected in 2018 get a bit of a pass but those Councillors who voted in favour of the procurement process in 2017 should have had a decent idea of what they were approving. Therefore, their surprised behavior at Council was merely a show. If it was not a show, they clearly did not read the 2017 reports to Council. I am not sure which one is more worrying. I am more of the opinion that it was for show, meaning they were misleading the public to believe staff were refusing to answer questions.

Let’s now discuss the scoring. The scoring is broken into two components; the financial submission and the technical submission. The financial component is out of 500 while the technical component is broken down to four categories: General Technical Requirements, Design Submission, Construction Submission, and Maintenance & Rehabilitation. Each of the technical categories are graded with a threshold of 70%. This is where the controversy comes in. We do not need to focus too much on the financial submissions as the TransitNEXT bid won that aspect with a score of 485 over the other bidders at 212 and 93. We can, therefore, simply focus on the technical scores.

The SNC Lavalin led TransitNEXT bid exceeded the 70% threshold on the General Technical Requirements and the Construction Submission. They fell below the threshold on the other two criteria. Overall, their evaluation ended up at 67.27%. At the time the scoring was known to the bid evaluation team, they had an opportunity to reach out to SNC to clarify the scoring and to have them address some concerns, which led to the lower score, just below the threshold. Since the scoring is subjective, the evaluation team does have flexibility. Given the weight of the scoring and the proximity to the threshold, the evaluation team felt they had the confidence to carry forward with the TransitNEXT bid. Their ability to do this was contained in the procurement process. In the end, the overall scoring had TransitNEXT at 821.35, well ahead of the other two bidders at 641.22 and 517.94. The process was followed and overseen by external lawyers as well as a Fairness Commissioner.

The scores are now known and the explanation surrounding the procurement process is known as well. Would it change my vote in March 2019? It would not. As mentioned, we knew the procurement process and we approved it unanimously in 2017. We have a procurement model in place that removes politicians from the evaluation process. The reason for that is to avoid political interference and potential corruption. Imagine if a member of Council pushes to have the bid from TransitNEXT rejected because of SNC Lavalin’s involvement and yet they received a campaign donation from one of the other bid teams. It is not impossible considering the local contractors on the other two bids. Avoiding the appearance of corruption is a wise choice. Delegating authority for procurement matters achieves that. The process was not flawed. Some people just did not like the outcome. Why?

It is my belief that this entire issue comes down to one thing and one thing only: SNC Lavalin. If this were any other company involved, we would not have this controversy. Due to the issues on Parliament Hill with SNC Lavalin and the upcoming Federal Election, there is a lot of negative attention surrounding SNC Lavalin. We simply cannot deny a contract based on what is happening on Parliament Hill. The reality is that City Hall is not the PMO. There is no Jody Wilson-Raybould at City Hall. There is no Gerald Butts. This standard procurement process yielded the best result for progress and for taxpayers. I have full confidence in that process and in the outcome. Everything else is just a convenient distraction for those politicians wishing to create one.

All of the reports mentioned in this column are available if you wish to read them. The procurement documents are also now available for public consumption. The Stage 1 contract is also a public document and the Stage 2 contract will be as well. If you wish to see any of these, please do not hesitate to contact me.

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If you have any comments, questions or concerns, please feel free to email me at Scott.Moffatt@ottawa.ca or contact me by phone at 613-580-2491. For information on Rideau-Goulbourn issues, please visit RideauGoulbourn.ca.