Outsourcing doubles engineering costs on Sask. highways, contractors say

Saskatchewan highway contractors say many late construction projects in the province are the fault of high-cost, low-quality, private engineering work.

Construction companies say poor design work causing delays

Shantel Lipp, executive director of the Saskatchewan Heavy Construction Association, said one of the problems with the Ministry of Highways is its growing reliance on inexperienced private engineers. (CBC)

Saskatchewan highway contractors say many late construction projects in the province are the fault of high-cost, low-quality, private engineering work. 

Over the past decade, the Ministry of Highways has been contracting out an increasing amount of its highway design work to private consultants. 

A ministry of highways briefing note obtained by CBC's iTeam says "the majority of the engineering work is now delivered by consultants." 

The executive director of the Saskatchewan Heavy Construction Association says as a result of that move, engineering costs have doubled. 

Sean Wilson, chair of the Saskatchewan Heavy Construction Association, said an increasing number of engineering work provided to private firms is inadequate. (CBC)

"When I talk to members, historically, they would say those numbers may have ran anywhere from 7 to 10 per cent," Shantel Lipp said. "Now it can go upwards to 15 to 20 percent on a contract."

Lipp said this is not what contractors were told, when ministry of highways officials explained the new direction to the industry. 

Cost goes up, quality goes down: industry

"Their explanation to us was outsourcing was going to reduce costs, which was fine. We cautioned it was going to be a learning curve."

"And we're still experiencing the learning curve."

Nithi Govindasamy, deputy minister of highways, said he doesn't know if the costs of engineering are rising. (CBC)

The chair of the association's board, Sean Wilson, said during this accelerated move to outsourcing, contractors have seen a decline in the quality of engineering design. 

He said they're finding a growing number of mistakes. 

"You're doing what you're told to do in a book." said Wilson. 

"And what I'm saying is there's a lot of contracts that the book is written wrong or incomplete, missing things. And that amounts to a lot of the contracts being delayed."

Last month, CBC's iTeam revealed that 46 per cent of all highways contracts were late last year, double the rate of just two years prior. 

According to Lipp, the problem is the Ministry of Highway's growing reliance on young, inexperienced, private engineers. 

"When they handled the services internally [by ministry staff] there were a lot of guys who had been doing those project managment duties for a lot of years," Lipp explains.

"So when they started to sort of outsource the consulting, downsize some of their internal resources, a lot of that experience is lost."

Some contractors say the cost of engineering services is rising rapidly. (CBC)

Wilson said that inexperience isn't just affecting the quality of the original road design, but their ability to make quick, competent and confident decisions in the field. 

"A lot of them are walking on eggshells. They're very scared to make alterations to the contracts because we get the ministry coming at our meetings saying 'Well the consultants are in charge of the jobs.' The consultants are running the jobs. But deep down the ministry is still running the jobs. The consultants are just doing as they're told."

Ministry reviewing these issues

The deputy minister of highways, Nithi Govindasamy, said he doesn't know if the costs of engineering are on the rise. 

"I would like to know obviously. I would like to know. It's all about value for money."

Govindasamy said that's one of many issues he's currently examining in his ministry. 

"I'm really not today prepared to go into any great depth of discussion about proportion and numbers and costs of particular aspects of the project."

He's also reviewing the claims of contractors about the diminishing quality of engineering consulting work. 

"All aspects of my ministry's business in terms of delivery of projects is being examined."

Govindasamy said he wishes the information was readily available but sometimes that's not realistic.

"There's millions of pieces of information when you're dealing with a business like ours. And it sometimes involves quite a bit of digging in terms of digging out that information."

There is not a specific time limit on this investigation, he added. 

Troubles on the road to Wakaw

A highway resurfacing job east of Saskatoon ended up taking three times longer than it should have because it was badly designed by a private engineering firm hired by the Ministry of Highways, according to Glen Whitford, a private highways project manager from Saskatoon.

Whitford said the first part of the 10-kilometre stretch of road near Wakaw was completed without trouble in the fall of 2012.

But he said when the crew came back in the spring of 2013 "we realized the design that was tendered in the original contract with the Ministry of Highways was not going to work."

Whitford  said the road started falling apart.

According to Glen Whitford, a private highways project manager, a badly designed highway resurfacing project east of Saskatoon is causing major construction delays. (CBC)

"They're responsible to design and tender a buildable project. This was not buildable," Whitford explained. "Now all of the sudden, everything changes and it becomes a slow-motion project."

It's still not complete. The road requires one final coat this spring.

Whitford worked for the Ministry of Highways for 35 years before retiring in 2010. For much of that time he managed projects inside the ministry. 

He says the quality of engineering work started declining before he left and things have continued to deteriorate since.

"You're supposed to test the road, you're supposed to drill the road you're supposed to get all the data needed to do a buildable design. And in many cases it seems that's not happening." 

Whitford explained the delay had some real world consequences. 

"It was quite an inconvenience of course for not only the cabin owners but also the people from Saskatoon and the surrounding area who use this road to get to the Wakaw regional park."

Whitford also said it delayed the contractor on its next project, meaning another angry community was waiting for them. 

"So we face the same situation. The local people are mad. 'Why aren't you here? Why are you late?'"

About the Author

Geoff Leo

Senior Investigative Journalist

Geoff Leo has been a reporter for CBC News in Saskatchewan since 2001. His work as an investigative journalist and documentary producer has earned numerous national and regional awards.


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