Untendered Tiger Dam purchase attempt not justified or supported by research, says ombudsman

Ombudsman Charlene Paquin says that Manitoba Infrastructure and Transportation (MIT) did not have sufficient reason to try to purchase $5 million worth of Tiger Dams flood-fighting equipment  in 2014 without going to tender.

Her report into the attempted purchase – which didn’t go through and was then sent to tender in December 2014 but was subsequently not awarded – was released Jan. 7 and also found that MIT did not do enough research and analysis into whether the particular type of flood-fighting equipment that the Interlake Reserves Tribal Council (IRTC) wanted was the best way to fight flooding.

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“No MIT staff we interviewed knew of research the department had conducted or considered regarding the flood protection needs for First Nation communities in the Interlake region of the province or for the purchase of $5 million of Tiger Dams, despite the guidance in the PAM [Procurement Administration Manual] to do ‘research and analysis’ in the first stage of the procurement cycle,” Paquin’s report states. “Our understanding is that the department did not conduct this research and analysis because IRTC had already stated to the department that it wanted a specific brand of water-filled barriers and because it was directed to prepare a submission accordingly. We are not satisfied that IRTC requesting specific equipment is sufficient justification for the department not to follow the guidance in the PAM that encourages departments to provide research and analysis regarding what goods or services should be purchased.”

The department’s submission to the Treasury Board proposed waiving a competitive bidding process because it felt the sole source exception – one of four acceptable circumstances under which untendered purchases for more than $50,000 can be made – applied.

“Individuals we spoke with at MIT indicated that departmental staff did not agree with waiving a competitive procurement process,” wrote Paquin. “However, as noted previously, the department was directed by the minister of MIT [Thompson MLA Steve Ashton] to draft a submission that proposed an untendered contract for Tiger Dams. The department indicates that the direction supported IRTC’s request for this equipment because IRTC had this equipment in its inventory and had experience using it.”

Paquin also said that MIT had purchased two emergency response trailers equipped with Tiger Dams and the equipment needed for their deployment from International Flood Control for a significantly lower price per trailer on July 4, 2014 than the price the company indicated it could provide them for in a July 30, 2014 document sent to IRTC.

“We were not provided with an explanation for the price difference, nor is there any indication that, despite staff having noticed this change in price, the department assessed reasons for the price difference prior to submitting the request to Treasury Board,” Paquin wrote.

The Treasury Board reviewed MIT’s submission on Oct. 6, 2014 that approved the spending but not the untendered purchase and directed the department to develop a detailed proposal with specific requirements and a plan to tender for the equipment and to provide a plan for custody, dare and use of the equipment, which – because MIT planned to pay for it from its capital budget – would be property of the province but in the possession of the IRTC.  Two days later, the Treasury Board minute regarding the submission was held by cabinet, and the premier told the then-clerk of the executive council to work with MIT and the Treasury Board to ensure proper procurement procedures were followed. The submission proposing an untendered contract was withdrawn by the MIT deputy minister on Nov. 13, 2014.

“The ombudsman’s findings show the minister was determined to award this contract to a specific vendor and through an untendered contract,” said Progressive Conservative Opposition house leader Kelvin Goertzen in a news release. “This was done with complete disregard to the advice of senior civil servants who were fulfilling their duty to provide expert advice and do what is right for all Manitobans.”

Goertzen also said the NDP had not learned from a previous ombudsman’s 2013 investigation concerning former cabinet minister Christine Melnick’s use of provincial staff at a legislature rally. “The NDP shows no respect for the civil service and continues to put its political interests above those of the province.”

Government house leader Dave Chomiak said in a news release that the government accepted the seven recommendations made by Paquin.

“While this report finds that legislation and policies were followed, we feel that acting on the recommendations made by the Manitoba Ombudsman will strengthen transparency and accountability when it comes to government procurement,” said Chomiak.  “In fact, we have already completed or started to act on 100 per cent of the recommendations. Her recommendations will help us improve the processes used for procurement, particularly in complex situations like flood fighting with many players and moving parts, so we can better serve Manitobans.”

The proposed untendered purchase was the subject of a 2014 complaint to the Manitoba ombudsman under the Public Interest Disclosure (Whistleblower Protection) Act. The former acting ombudsman referred the matter to the clerk of the executive council and was informed that the contract for the equipment would be tendered, so the ombudsman’s office deemed that issue resolved. The clerk of the executive council wrote the ombudsman June 23, 2015 and said Premier Greg Selinger wanted the ombudsman to “consider conducting a fulsome review of the concerns raised by the whistleblower on the matter, including the commitment to and procurement of flood-fighting equipment for the Emergency Operations Centre, to ensure that all appropriate processes had been followed.”

The Progressive Conservatives had asked the premier that day to demand Ashton’s resignation for what they called an undeclared conflict because the owner of International Flood Control had previously donated to Ashton’s election and leadership campaigns.

Following the resignation demand, Ashton asked Manitoba Conflict of Interest Commissioner Ron Perozzo for a written ruling on whether a contribution to a campaign would constitute a conflict of interest.

“I am of the opinion that a contribution to a leadership campaign, made in accordance with the Election Financing Act would not, in and of itself, give rise to a pecuniary interest under The Legislative Assembly and Executive Government Conflict of Interest Act,” wrote Perozzo in his July 2015 decision.

 The ombudsman opened an investigation under section 15(a) of the Ombudsman Act, which empowers the ombudsman to investigate recommendations made regarding administrative matters “whereby any person is or may be aggrieved.”

To read the full report go to: https://www.ombudsman.mb.ca/uploads/document/files/ombudsman-report-on-flood-fighting-equipment-en.pdf

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