UPDATE: Ottawa city council unanimously approved the city auditor general’s amended 2019 work plan on Wednesday, April 24, 2019.
The city’s auditor general says he plans to launch a compliance audit of the procurement process for the $4.66-billion second phase of Ottawa’s light-rail transit (LRT) network.
The city-run process recommended TransitNEXT, a wholly owned subsidiary of SNC-Lavalin, as the top choice for the contract to design, build, finance and maintain the north-south Trillium Line’s extension to Riverside South. International consortium East-West Connectors was tapped as the preferred proponent for the contract to build the Confederation Line’s east and west extensions.
City council approved the two agreements with a 19-3 vote on March 6 amidst concerns raised by some councillors that they weren’t given enough information about the Stage 2 procurement process or enough time to digest staff’s report on the contracts and consult with the public. About two weeks after council’s vote, CBC News reported that SNC-Lavalin did not meet the minimum technical threshold needed to qualify for the $1.6-billion contract that it won.
“There were some issues raised about the procurement,” auditor general Ken Hughes said during the audit committee’s first meeting of the term on Monday, noting he received “emails and telephone calls from the public and from councillors.”
Hughes said he subsequently conducted some research of his own and consulted with “most” members of council before deciding to drop a compliance audit into travel and hospitality expenses from his office’s 2019 work plan to make room for an audit into Stage 2 LRT procurement.
Apart from stating that SNC-Lavalin’s bid for the Trillium Line extension was the cheapest of the bids presented to the city and “the only bid to come in on budget,” senior City of Ottawa staff have declined to disclose further details about the evaluation process or scoring during Stage 2 procurement, citing confidentiality and the need to maintain the integrity of the process.
Asked by Coun. Theresa Kavanagh whether Hughes would also be blocked from seeing information to which councillors haven’t been granted access, Hughes said that would not be the case but added that his office would be “bound by the same agreements that the city may have signed.”
“Under the Municipal Act and our bylaw, the Office of the Auditor General has access to everything. There is nothing that we are prevented from seeing, if you will,” he told councillors. “That being said … while we will have access to everything that I believe we need to conduct our work, if there are commercial agreements or if there are contractual arrangements or aspects of the request-for-proposals that require that some commercial information is not released, we will be bound by those same requirements. But council can have assurance that we will have looked at the data, looked at all of the applicable material.
“We can see everything, and we will see everything,” Hughes continued in response to a follow-up question from Kavanagh. “We’ve already looked at some aspects of light rail Phase 2 and everything we asked for … was given to us and we saw.”
The other audits on the auditor general’s 2019 work plan are:
- Audit of Bylaw and Regulatory Services — Bylaw enforcement — Operational audit
- Audit of Fleet Services — Operational audit
- Audit of Lansdowne Accounting/Waterfall — Compliance audit
- Audit of Light-Rail Transit (LRT) Contingency Fund — Compliance audit
- Audit of Meridian Theatres @ Centrepointe — Operational audit
- Audit of Shenkman Arts Centre — Operational audit
The audit committee unanimously approved the revised 2019 audit work plan during the meeting on Monday. Councillors voted to have the dropped travel and hospitality audit added to the 2020 work plan.
Coun. Diane Deans, who asked pointed questions about LRT 2 procurement and SNC-Lavalin’s technical scoring at council’s meeting on March 6, told reporters afterward that she’s “very happy” that Hughes has taken on an audit of the process.
For his part, audit committee chair Coun. Jean Cloutier said he supports the auditor general’s LRT procurement probe.
City council must also green-light the 2019 work plan. On March 27, Mayor Jim Watson said he’d “have no difficulty” with an audit of LRT Stage 2 procurement, after Coun. Shawn Menard gave notice that he would table a motion asking the auditor general to investigate that process.
“If they put that on their work plan I have no problems with it,” Watson said that day. “I think it’s a solid arrangement that staff have brought forward to us.”