Nova Scotia

'It causes questions': Crown corp. official backed winning bid for beer garden

Develop Nova Scotia is facing questions about why an official who wrote a reference letter for the winning bidder of the Halifax waterfront beer garden contract was also involved in scoring parts of the bids.

Develop Nova Scotia recently awarded tender for Halifax waterfront beer garden to Stubborn Goat

The Stubborn Goat Beer Garden was one of two applicants in the most recent round of tendering for Develop Nova Scotia's downtown Halifax waterfront space. (CBC)

An official with the Crown corporation that oversees the tendering process for a Halifax waterfront beer garden gave a reference letter to the winning bidder, and was also involved in scoring parts of the bids for the lucrative contract.

The $366,573.75 tender was awarded in February to the Stubborn Goat Beer Garden, renewing a three-year deal that allows it to continue renting prime waterfront space for the beer garden from Develop Nova Scotia.

During the tendering process, John MacKenzie, Develop Nova Scotia's property manager, wrote a reference letter for the Stubborn Goat, according to records obtained by CBC News through an access-to-information request.

While MacKenzie was also involved in grading bids, a spokesperson for the Crown corporation said a provincial procurement official instructed him not to be involved with scoring the reference letters.

MacKenzie's one-page letter included details about how Stubborn Goat had leased the property since 2016, noted there were no legal disputes with the company and stated that rent was always paid on time.

"The Stubborn Goat Beer Garden has become a popular destination on the Halifax waterfront that attracts locals and tourists while offering a quality food and drink menu featuring locally sourced ingredients and products," he wrote.

Perception problems

The situation raises concerns for commercial litigation lawyer Caitlin Regan, who also teaches a course about tendering and bidding for the Construction Association of Nova Scotia.

"Whether or not the person who authored the letter was not involved with the actual scoring of the reference letters, I think that certainly somebody could make the argument that that person already is in favour of one of the bidders as opposed to the other," said Regan, who practises law with Halifax firm Cox and Palmer.

"And how can you really tell whether or not that favouritism has infected or affected the rest of their analysis when they're scoring the bids?"

Regan doesn't represent any of the parties involved and stressed her comments should not be taken as legal advice.

"The idea that the person making the decision — and if you think of the corporation as a person and the person making the decision — has already provided an advocating letter on behalf of one of the parties, it would raise concerns for me," she said.

'Questionable to the naked eye'

As part of the tender, which closed on Dec. 19, 2018, applicants were required to submit three reference letters, including one from a previous landlord. Two applications were received.

David Stuewe, a former senior civil servant and retired Dalhousie University professor with expertise in business ethics, said it's a good sign that MacKenzie was not involved in scoring the reference letter portion of the bids.

"It still looks questionable to the naked eye," he said. "But for those who look at these matters from a legal perspective and a management perspective, it's a difficult situation and unfortunately it causes questions."

Stuewe said if he was the person writing the letter, he would have worked hard to find somebody else to do it, but noted that may not always be a possibility within an organization.

MacKenzie was one of four Develop Nova Scotia employees who did the bid scoring on the most recent tender.

He was also one of the three people who scored the bids when it previously went to tender in 2016.

Previous beer garden tender was criticized

That tendering process drew scrutiny from the province's information and privacy commissioner after the Waterfront Development Corporation — the previous name for Develop Nova Scotia — issued heavily redacted or blank documents to CBC News as part of an access-to-information request to see the bids and the scoring.

"Neither the third parties nor the public body provided any evidence or submissions in support of their positions that information should be withheld," wrote Catherine Tully in a report released last fall.

Develop Nova Scotia complied with the request.

While the 2016 tender results show how the individual Waterfront Development Corporation employees graded the bids, the current tender results are redacted and only show the totals.

Develop Nova Scotia defends its processes

Develop Nova Scotia spokesperson Kelly Rose said officials from the Crown corporation have provided reference letters for existing tenants on previous tenders, but wouldn't say whether any of the individuals who wrote the letters were also involved in scoring the bids.

"We're confident in the integrity of our tendering and evaluation process which includes participation and advice of a fairness monitor from provincial procurement," Rose said in an email.

The Department of Business oversees Develop Nova Scotia. An interview request with Business Minister Geoff MacLellan was turned down by a spokesperson.

Chief provincial procurement officer OK with process

Chris Mitchell, who oversees procurement for the Nova Scotia government, said as the property manager, MacKenzie was most qualified to provide a reference letter, as well as be one of the people to evaluate the bids.

"But in order to create that fairness, that person who drafts that letter cannot be available or not be a participant in the awarding of the points for that reference letter," said Mitchell.

He said the information in the reference letter is "pretty much boilerplate" and includes details about lease dates and whether any rent payments were late.

"There's very little subjectivity in that letter," said Mitchell.

He said this isn't the first time that somebody who wrote a reference letter on a tender was also involved in scoring parts of the bids, but he wasn't sure how often this occurs.

What the losing bidder thinks

The second bidder on the most recent tender was the Chef Inspired group of companies which owns restaurants such as Cheese Curds and Habaneros.

"The food industry is very tough and very volatile, so I've learned, you know, to play nice in the sandbox … and if I don't win it, I move on, I'm off to something else," said Bill Pratt, the company's CEO and founder.

"I don't dwell on negatives, I'm a very positive, can-do person."

He said he plans to submit another bid when the beer garden tender opens up again in the future.

Pratt said he wasn't concerned that Develop Nova Scotia wrote a reference letter in favour of the Stubborn Goat, and said he would have asked for one had he been in the Stubborn Goat's shoes.

"They're the client, so why wouldn't I ask them?" he said.