Open tendering process needs review

May 20, 2014

michael-harrisIf you hear the term “open tender,” most of you probably start to nod off.

It’s a dull, often misunderstood area of government spending few of us ever pay attention to. But the tendering process matters. A lot.

Municipal, provincial and federal governments spend untold millions on the things they buy through tenders every day across Canada, from paving jobs at school parking lots to excavators for cities and towns.

The tendering process is supposed to let suppliers compete for government projects, with the idea that governments can choose the most cost-effective option, and save us — the people who foot the bill as taxpayers — money.

But it doesn’t always work out that way.

Whether you’re selling heavy equipment or photocopiers, many suppliers can be left irritated by the tendering process. Governments don’t always buy from the lowest bidder, even if they meet all the specifications. The reasons can be complex, or sometimes just a vague response that the bid didn’t meet some excruciatingly minute, technical part of the criteria.

Managers want to go with suppliers and companies they trust. That makes sense. But exploiting loopholes in the tendering process to award longtime suppliers who cost more gives off the appearance some of these purchases are decided long before the bidding even begins.

For suppliers, it can be an infuriating experience to see your low bid passed over for a more expensive option that the person doing the purchasing prefers for sometimes puzzling reasons. Taxpayers should be just as frustrated.

The tendering process isn’t just used for buying equipment or supplies — it’s also used to award contracts for public infrastructure projects. And Michael Harris, the Tory MPP for Kitchener-Conestoga, says we’ve got a huge problem on our hands in this area.

He’s concerned about growth in so-called closed tendering projects, in other words, government projects that are restricted to a select group of bidders.

Harris, pictured above, says construction unions have been exploiting a legal loophole in our labour laws that allow them to register school boards and municipalities as “construction employers,” which forces them by law to hire only companies organized by specific unions.

In other words, some unions get to bid on government projects, while others don’t. Harris says these “labour monopolies” allowed for in the Labour Relations Act cost governments millions of dollars every year.

He says school boards and municipalities were never intended to be treated as if they’re construction companies. And he may have a point.

The provincial politician is trying to make open tendering an election issue, but it’s not clear yet if voters really understand what’s at stake. But whatever your political allegiances, it’s an issue worth paying attention to.

With a lack of competition in the tendering process, the cost of these public projects inevitably goes up. It’s happened in Sault Ste. Marie, Hamilton, and the Greater Essex County School Board, where unions have successfully exploited this loophole.

In Waterloo Region alone, Harris says 90 per cent of contractors would be barred from bidding on public infrastructure projects if the municipality is registered as a construction employer governed by the Labour Relations Act.

Of course, workers have the right to join unions. This isn’t about that. But excluding some companies and workers from bidding on the projects we all pay for just goes against the whole spirit of the open tendering process.

As the people footing the bill for these projects, we ought to start asking more questions about how these contracts are being awarded, who’s benefiting and what it means for the rest of us.

-Guelph Mercury, May 17, 2014


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