New Brunswick

Auditor general says province spent $200M on outsourced road repairs

Auditor General Kim MacPherson says the former Liberal government spent $200 million on road and bridge maintenance work done by private contractors.

Kim MacPherson's report also says province knowingly outsourced supplies at higher cost to taxpayers

Auditor General Kim MacPherson presented her latest report on Tuesday morning. (CBC)

Auditor General Kim MacPherson says the former Liberal government spent $200 million on road and bridge maintenance work done by private contractors.

Her report, which was released Tuesday, suggests inconsistencies across the province with regard to whether road repairs are outsourced or done in-house.

Decisions to outsource road and bridge maintenance and construction work and acquire related equipment were not based on evidence or "supported by an objective analysis of costs and consequences," the report said.

Instead, the Department of Transportation has relied on subjective and "philosophical" decisions,

"The Department outsourced work at the taxpayer's expense to support the private sector and encourage economic growth," she said.

Right now, she said, the department doesn't have an outsourcing policy or decision-making framework to decide which projects should be tendered and which should be done by the province.

The auditor general's findings back up claims by CUPE Local 1190 several years ago that the Brian Gallant government was playing politics with peoples' livelihoods, trying to fulfil campaign promises to boost the private sector by cutting jobs within the public service.

The union sent a request to the auditor general, asking for an investigation into the awarding of public contracts in transportation and construction.

Wasting taxpayer dollars 

The province outsourced the chipseal program knowing it was the more expensive route, MacPherson said.

It also spent an additional $1 million to purchase 40 pre-built plow trucks.   

"In my view, given the existing state of our provincial infrastructure, it's essential the department uses every dollar in an efficient manner," MacPherson said.

In 2016, CUPE Local 1190 asked the auditor general for an investigation into the privatization of some jobs in the Department of Transportation and Infrastructure. (CBC)

Although outsourcing is necessary at times, including when the private sector can do the job faster or cheaper, it can also be risky.

For instance, the province put taxpayers at risk when it outsourced work that only a few companies could do, the report said. Over the past four years, 55 tenders valued at $46 million were awarded to the sole bidders.

Supplier availability should be a factor in deciding whether to outsource, the report said.

"When a company goes bankrupt or does not deliver contracted services on time or to appropriate quality, it is the government and residents who suffer."

Recommendations 

In her report, MacPherson provided a number of recommendations to the Department of Transportation and Infrastructure, including that it:

  • Develop an evidence-based outsourcing policy and decision-making framework to guide staff on which  programs to outsource.
  • Assess the risk of over-dependence on a single supplier when making outsourcing decisions.
  • Record, track and regularly report on the extent and composition of outsourced maintenance and construction work.
  • Evaluate how road work such as chipsealing is sourced and delivered in all district.
  • Include capital investment in critical equipment when planning the most cost-effective manner to deliver road repairs.
  • Source bridge and culvert replacement work in an evidenced-based, cost-effective and timely manner.

The Department of Transportation and Infrastructure has agreed to these recommendations.

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