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Montreal Mayor Gérald Tremblay, who cancelled the huge contract, also fired two of the city's top civil servants. ((CBC))

Montreal Mayor Gérald Tremblay is cancelling a $355-million water meter contract, the biggest ever awarded by the city.

Tremblay said Tuesday two of the city’s top bureaucrats — city manager Claude Léger and the city’s director of corporate affairs, Robert Cassius de Linval — have been fired.

The move comes after the city's auditor general recommended the city review — and consider cancelling — its contract with private consortium GÉNIeau because of irregularities with the tendering process.

'I will do everything that is possible to make sure that it doesn’t happen again.' —Mayor Gérald Tremblay

Jacques Bergeron tabled his report at city council Monday night after spending months looking over documents from the water meter contract that sparked a conflict-of-interest scandal last spring involving a former high-ranking member of Montreal's executive committee.

At a news conference Tuesday morning, Bergeron said he had concluded the tendering process for the contract was flawed from top to bottom — "too fast, too big, [and] too expensive."

The auditor said that elected officials including the mayor were not provided with the necessary information before they approved the contract.

"Some of the information was not transmitted properly to the executive committee," Bergeron said.

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Montreal auditor Jacques Bergeron says the tender process for the city's water meter contract was flawed from start to finish. ((CBC))

The water meter installation project could have been broken up into smaller jobs that could have been distributed to different contractors, potentially saving money, Bergeron said.

But the price paid by Montreal to purchase and install the water meters is competitive, he added.

Bergeron also criticized the city for never considering using its own employees to carry out a portion of the work.

In his report, the auditor noted that there were meetings between bidders for the contract and city employees that were of concern, but he refused to elaborate on that issue.

Because the auditor's office has a limited mandate, Bergeron declined to report on allegations of conflict of interest, and handed over relevant documents to Quebec provincial police.

He stopped short of pointing a finger of blame.

"It is very clear for us that it is a process problem," Bergeron said. "We didn’t find any guilty person."

Elected officials not sufficiently informed

Reacting to the report, Tremblay said it was "totally unacceptable" that elected officials did not have access to necessary information before the contract was awarded.

"If we would have had that information, maybe the decision would have been different," Tremblay said.

But, the mayor maintained, elected officials bore no responsibility for the lack of communication.

"We were not informed of all the facts, and as a result of that, I’m acting today to make sure it doesn’t happen in the future," Tremblay said.

'I doubt very much that the mayor never knew anything about this contract' —Opposition leader Benoît Labonté

The mayor said he had mandated assistant city manager Rachel Laperrière to produce an action plan following the auditor’s recommendations. He said the plan will address "the public process that requires a private expertise … review the role of the private sector in the writing and preparing of contracts, and to enforce the mechanisms of accountability between civil servants and elected officials."

Tremblay couldn't say how much the cancellation of the contract would cost, adding it was unlikely that information would become available before the upcoming municipal election, Nov. 1.

Report 'damaging'

Opposition leader Benoît Labonté said the report is evidence "the mayor lost political and administrative control of the city."

Labonté said it was the mayor's responsibility to keep himself informed about the contract, especially because it was the biggest ever awarded by the city.

"I doubt very much that the mayor never knew anything about this contract," said Labonté.

Labonté, who is also deputy leader of the Vision Montreal party, reiterated calls for a special meeting of city council to be held by Monday.

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Montreal opposition Leader Benoît Labonté says the auditor's report will damage the current administration. ((CBC))

According  to provincial law, Labonté said, the mayor requires a vote from city council in order to officially cancel the contract — warning that further delays could cost the city millions.

"How much will he ask Montrealers to pay to try to save his political career?" Labonté asked.

Tremblay suspended the water meter contract last spring after allegations of conflict of interest surfaced.

Reports suggested his former right-hand man — Frank Zampino, ex-head of the city's executive committee — maintained a friendship with businessman Tony Accurso, who led the GÉNIeau consortium that won the meter contract.

Zampino admitted he vacationed on Accurso's yacht in the Caribbean during the tender process for the contract.

Zampino retired from municipal politics last year.

During his investigation, the auditor said, he met with Zampino, Tremblay and Sammy Forcillo, the executive committee member responsible for infrastructure and water management.

In a statement, the GÉNIeau consortium said it "responded in good faith" to the city's call for tenders, and had "assembled all the resources required to carry out this contract, from the time it was signed until it was suspended."

The consortium said it acknowledges the city's intention to cancel the contract, and would evaluate the financial consequences resulting from its termination.