Ottawa

SNC-Lavalin failed to meet technical bar for LRT bid — twice

SNC-Lavalin failed to meet the minimum 70 per cent technical score in its bid to extend the Trillium Line not just once, but twice.

City defends process that saw SNC-Lavalin win contract, calling it good value for taxpayers

SNC-Lavalin won the $1.6-billion contract to build the Trillium Line extension in March. (Trevor Pritchard/CBC Ottawa)

SNC-Lavalin failed to meet the minimum 70 per cent technical score in its bid to extend the Trillium Line not just once, but twice.

The city's technical evaluation team — comprised of city engineers, consultants and subject experts — gave the struggling Montreal-based company a collective score of 63.6 per cent in early October 2018.

The evaluation was based on four criteria, and in the first round of scoring, SNC-Lavalin failed all of them. They include:

  • General technical requirements: 68 per cent.
  • Design submission: 61 per cent.
  • Construction submission: 68.52 per cent.
  • Maintenance and rehabilitation: 59.64 per cent.

But days after the evaluation team delivered its first set of consensus scores, the committee overseeing the procurement project asked the team to re-evaluate the technical bids.

The second time around, SNC-Lavalin scored 67.3 per cent overall, failing to reach 70 per cent in two categories: design and maintenance/rehabilitation, where the company scored in the mid-60s. In general technical requirements and construction, SNC-Lavalin scored just over 70 per cent.

In fact, all three bidders for the contract to extend the north-south LRT line saw their scores rise a few points on the second round of evaluation. But both times, only SNC-Lavalin scored under the minimum. 

The company was awarded the $1.6-billion contract by council in March this year.

City manager Steve Kanellakos defended the process that saw SNC-Lavalin win the bid, even though it missed the minimum technical score twice. (Andrew Foote/CBC)

Direction to re-score within rules

City manager Steve Kanellakos said in an interview on Tuesday that the bidding process allowed the bid evaluation steering committee to ask that the bids be reviewed a second time, and that the process was overseen by a fairness commissioner.

The committee included representatives from Norton Rose Fulbright, the law firm hired by the city to oversee the procurement process for the LRT Stage 2 project.

Law firm warned bidder could sue

That there were two rounds of technical scoring — and that SNC-Lavalin failed to achieve the minimum grade both times — is the latest development in a story CBC first reported back in March.

Since then, CBC had been fighting for the actual scores through access to information, which were provided by the city clerk's office on Friday. However, the original round of evaluations that showed SNC-Lavalin scored about 63 was not included in the response, even though it was explicitly requested, until this week.

On the same day, the city released a memo explaining how a bidder could still win the contract without meeting the minimum technical score.

In essence, the request for proposals (RFP) included a clause that gave senior city staff the discretionary power to waive a bidder through the process without scoring 70 per cent in the technical evaluation.

While all the bid finalists knew about this discretionary power, council did not. Council also didn't know that the lead bidder for the Trillium Line hadn't scored 70 per cent, even though some members — including Coun. Diane Deans — asked pointed questions about the issue at a council meeting in March.

Diane Deans and Carol Anne Meehan say city councillors weren't given the information they needed before voting to approve the contract for Stage 2 of the LRT. 1:08

Kanellakos told CBC the discretionary provision given to the city in the RFP was based on "best practices" in these sorts of procurements for precisely the position that Ottawa found itself in with SNC-Lavalin.

"You've got a situation where you have a proponent that is three points off on a $1.6-billion contract on a portion of the valuation where there is some subjectivity in terms of the scoring," said Kanellakos. "There's always going to be grey areas. Things aren't always black and white."

Kanellakos said the city received a legal opinion from Norton Rose Fulbright advising that if it didn't allow SNC-Lavalin to continue on in the process after missing the technical bar by just a few points — whether three or six — the city could open itself up to legal action from the company, which could have challenged the scoring if it ended up losing the bid. 

City confirmed tech specs with SNC-Lavalin

The city manager said staff were not told which finalist had failed to score 70 per cent when it made its decision to allow the bidder to move forward, and also didn't know the price of the bids at the time. It turned out that SNC-Lavalin had by far the lowest-priced bid.

"In this case, even though we didn't know the financial outcome, we ended up with the best price, saving taxpayers significant dollars," said Kanellakos.

The financially troubled SNC-Lavalin could have sued the city if it was disqualified from the LRT Stage 2 bidding after failing to meet the technical threshold by a few points, according to legal advice from Norton Rose Fulbright. (Paul Chiasson/The Canadian Press)

Exactly what caused the city's own technical evaluation team to fail the SNC-Lavalin bid twice isn't clear. The technical bid is extremely important, as it lays out how a bidder plans to build the LRT system — everything from designing the stations, to the sorts of train control systems it's going to use, to the specific expertise it will employ.

Kanellakos said SNC-Lavalin's proposal was "technically compliant," meaning the bid addressed — in some way, at least — all of the city's requirements for the project.

Once the city realized SNC-Lavalin ended up with the highest overall ranking, officials went back to the company to ensure it "had the technical chops" to meet the city's requirements, said Kanellakos.

"If they weren't satisfied, we would have made a recommendation to go with the No. 2 ranked bid and discarded the SNC bid," he said.

Corrections

  • A previous version of this story said Chris Swail, the city's former director of light rail planning, was a member of the bid evaluation steering committee. In fact, the information provided by city manager Steve Kanellakos was incorrect. Swail was not part of the committee.
    Aug 07, 2019 12:54 PM ET

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