Ottawa·Analysis

Was council lied to about process that awarded LRT2 contract to SNC-Lavalin?

The official confirmation that SNC-Lavalin won the $1.6-billion contract to extend the north-south LRT despite failing to reach the minimum technical bar will no doubt raise many questions in coming days. But key among them is whether council, the elected officials charged with approving the deal, were lied to.

That's the key question among many that controversial process raises

The Trillium Line extension will add stations at Gladstone, Walkley, South Keys, Uplands, the airport, Leitrim, Bowesville and Limebank. (City of Ottawa)

The official confirmation that SNC-Lavalin won the $1.6-billion contract to extend the north-south LRT despite failing to reach the minimum technical bar will no doubt raise many questions in coming days.

But key among them is whether council, the elected officials charged with approving the giant deal, were lied to.

Here's what we do know. SNC-Lavalin's proposal to extend the Trillium Line didn't score 70 per cent in the technical evaluation, which was supposed to be the minimum threshold a bidder had to meet.

CBC, citing unnamed sources, first reported this back in March. And since then, CBC has been fighting for the actual scores through access to information.

Late last week, the city clerk's office provided the final scores for all the bidders for the Stage 2 project.

Those scores officially confirmed that among the six finalists — three bidding for the Confederation Line extension contract, and another three bidding for the Trillium Line — SNC-Lavalin alone failed to reach 70 per cent in the technical scoring.

SNC-Lavalin, operating under the name TransitNEXT, earned a total technical score of 67.27 per cent, while its direct competitors scored in the mid-80s.

The front lawn of the headquarters of SNC Lavalin in Montreal in 2014. TransitNEXT, a wholly owned subsidiary of SNC-Lavalin, was the City of Ottawa's top pick to extend the Trillium Line to the south. (Paul Chiasson/The Canadian Press)

SNC-Lavalin the cheapest, but best value?

We also know that SNC-Lavalin was, by far, the cheapest bidder. This information is not new. Back in March, Mayor Jim Watson said the Montreal company's bid was "the best deal for taxpayers."

However, the official scoresheet gives an indication of just how much difference there was in price between the bidders.

SNC-Lavalin's score for its financial submission was a whopping 97 per cent, while the second-ranked bidder scored a mere 42 per cent.

But cheapest doesn't always mean best value, especially now that we know SNC-Lavalin didn't hit the technical threshold.

After all, the technical submission explained how the company would build the rail system. So if the city's own technical evaluators found those details sub-par, how will that affect the final product?

Those are questions likely to be asked in coming days.

Staff given secret discretion

We also now know how SNC-Lavalin won the contract despite failing to meet the technical bar.

According to a memo city manager Steve Kanellakos sent to council on Friday, the request for proposals (RFP) provided the city with the "sole discretion" to move a proponent along in the bidding process even if it didn't meet the minimum grade.

City manager Steve Kanellakos sent a memo to council on Friday, saying the city had the 'sole discretion' to move a proponent along in the bidding process even if it didn't meet the minimum technical grade. (CBC)

We know now that it was the executive steering committee — made up of the city's five most senior bureaucrats — that exercised this discretion given to it under RFP Subsection 6.5.2(4).

But here's the problem: Council had never seen the RFP.

Indeed, until it was released Friday, the document had remained secret.

More to the point, never in the discussions about how the bids were evaluated did this discretionary power come up.

Evaluation rules not fully explained

The city's own report on how the technical evaluation worked states that "in order to receive a passing score, a technical score threshold of 70% for each of the criteria was required."

(It turns out that SNC-Lavalin failed to score 70 per cent on two of the four criteria, as well as failing to score 70 per cent overall.)

At the March 6 meeting where council ultimately approved the Stage 2 contract in a vote of 19-3, Coun. Diane Deans asked specifically about the evaluation process: "Pre-qualification, followed by technical scoring, and then if you passed the 70 per cent threshold, you went onto financial assessment. Is that correct?"

Chris Swail, then the director of LRT planning, answered: "That is correct."

At the same meeting, when councillors asked directly if there was any way by which the winning proponent could not have achieved the technical threshold of 70 per cent, they were told by the city's outside lawyer overseeing the bidding process that it was none of their business.

Councillors have a right to know process

It's true that in 2017, the previous council delegated the authority to handle the RFP to staff, which usually happens. And council gave the executive steering committee the responsibility for recommending a preferred proponent to council.

But while councillors do need to trust the expertise of city staff, they have a right to know the process by which staff chose the first-ranked bidders.

After all, if councillors are just there to rubber-stamp the decisions of staff with no questions asked, why do we have them?

A key component of the evaluation process was purposely kept from the elected officials who ultimately make the decision to spend billions of taxpayer dollars.

The process was not fully, or honestly, explained at any time before council voted on the city's most expensive project in its history.

Was council lied to? That's the question that should be asked this week.

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