Its all coming out in the wash now...
http://ottawacitizen.com/business/local-business/government-pays-35m-to-end-relocation-contract-dispute
The Conservative government paid $35 million to quietly settle a lawsuit over the handling of bids for a relocation deal that an Ontario Superior Court judge assailed as “outrageous” and rigged by bureaucrats to favour the winning bidder.
The Public Accounts show payments went to Envoy Relocation Services last year for “settlement of claim for missed financial opportunities” from the three departments: the RCMP, National Defence and Treasury Board.
The Integrated Relocation Program costs the government about $300 million a year to relocate employees to new postings — not including moving costs, which are covered by another contract. The government relocates between 15,000 and 20,000 federal employees a year, with the military accounting for 85 per cent of those moves.
Envoy was the losing bidder for the 2004 contract. The firm took the government to court, successfully arguing bureaucrats “turned a blind eye” to the rigging of the 2004 relocation contract to favour the winner Royal LePage Relocation Services (RLRS) — now Brookfield Global Relocation Services. The company has had a monopoly on the contract since 1999. The lawsuit revolved around the 2002 and 2004 contracts.
The government filed notice to appeal the court ruling, which awarded Envoy an unprecedented $40 million and delivered a major blow to the integrity of the government’s procurement system.
Justice Peter Annis delivered a withering decision on what he called the government’s “misconduct” in the bidding process and later during litigation. He called the government’s handling of the deal “reprehensible”, “outrageous” and “shocking. ” He also urged an investigation to determine how far knowledge about the misconduct went up the “governmental hierarchy.”
Annis awarded Envoy $30 million to cover lost profits, plus costs and interest, for two contracts — one for relocating the military and the other for moving RCMP and bureaucrats to new postings.
In a separate ruling on costs, he increased the award to cover Envoy’s lost profits and awarded full costs and interest totalling nearly $10 million to send a message about the court’s disapproval of government’s behaviour.
That government eventually abandoned any appeal and quietly settled the case with Envoy for $5 million less than the court’s award. The Public Accounts showed National Defence paid $28 million, the RCMP $4.2 million, and Treasury Board $2.8 million.
Envoy president Bruce Atyeo, who wouldn’t discuss the settlement, said he and his partner spent $12 million and more than a decade on the case, which wound through a series of tribunals, probes and hearings before landing in court.
“As condemning as that judgment was, nothing happened,” he said.
“I am dumbfounded that there has been no accountability … I don’t know what more the government needed to hear for there to be some punitive action here. People broke the law and yet everyone is walking around scot free and some of the people are still involved in the same jobs.”
The 2009 contract was supposed to fix the controversy and allegations of bid-rigging that surrounded the 2002 and 2004 contracts. But it also ended up mired in allegations of unfairness.
Atyeo appealed to the auditor-general to investigate the 2009 contract, which he argued ruled out all competitors other than RLRS. Auditor-General Michael Ferguson initiated a two-part investigation into the contract, which expires next month.
The AG’s office said it regularly examines procurement issues and the 2009 contract was flagged as an “area of higher risk and interest to Parliament and Canadians.”
The first part of the audit focused on whether key players — Public Works, Treasury Board Secretariat, National Defence and the RCMP — followed the contracting rules. That audit, released in Ferguson’s May report, found a series of missteps and delays during the 2009 contracting process that stopped suppliers — other than the incumbent — from bidding on the contract. It found, however, no evidence that it was done intentionally.
The second part, to be released Tuesday in Ferguson’s next report, will examine the delivery of relocation services, including whether the military and RCMP lived up to their responsibilities in managing the program. It also examined the extent they monitored the services provided to employees, as well as financial management and performance.
The military’s “final move” policy that landed Lt.-Gen. Andrew Leslie in hot water for claiming $72,000 in expenses to move within Ottawa was among the benefits offered by the military’s relocation policy. The Conservatives have since announced they will no longer pay this benefit for retiring military personnel who re-locate within a 40-kilometre radius because “a move down the road or within close vicinity is not defensible to taxpayers.”
Ferguson’s report will also include chapters on Canada’s response to international humanitarian crises, transnational crime, mental health services for veterans, financial support to the auto industry, preservation and access of government record, and the effectiveness of the Nutrition North Canada program to get healthy food to isolated communities.
kmay@ottawacitizen.com
By the numbers
$300 million: What government spends on relocation
$30 million: Annual administration fee to contractor
18,000- 20,000: Number of military and RCMP personnel and public servants annually relocated
$12 million: Envoy Relocation Services’ legal and other costs since 1999
$40 million: Court award for lost profits, costs and interest.
$35 million: Government settlement with Envoy.
