Evidence of meeting #32 for Government Operations and Estimates in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was sauvé.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Pierre-Marc Mongeau  Assistant Deputy Minister, Parliamentary Precinct Branch, Department of Public Works and Government Services
Tom Ring  Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services
Robert Wright  Director General, Major Crown Projects, Department of Public Works and Government Services
Jacques Leclerc  Senior Director, Real Property Contracting Directorate, Department of Public Works and Government Services

8:45 a.m.

Liberal

The Chair Liberal John McKay

Ladies and gentlemen, I see a quorum. We bring together the 32nd meeting of the Standing Committee on Government Operations.

We have four witnesses: Pierre-Marc Mongeau, Tom Ring, Robert Wright, and Jacques Leclerc. The normal procedure is to have 10 minutes to make a presentation. I'm not sure who is going to be the lead here--Monsieur Mongeau--and then thereafter is questioning by members.

Mr. Mongeau.

8:45 a.m.

Pierre-Marc Mongeau Assistant Deputy Minister, Parliamentary Precinct Branch, Department of Public Works and Government Services

Thank you, Chair, for the opportunity to appear before this committee to discuss the rehabilitation of the parliamentary buildings. I am Pierre-Marc Mongeau, assistant deputy minister of the parliamentary precinct branch. With me is Rob Wright, director general of major crown projects for the parliamentary precinct, and also Tom Ring, the assistant deputy minister for acquisitions with Jacques Leclerc.

We are both here today because there is a distinct separation of responsibilities between us, Tom and I, on the tendering, awarding, and managing of contracts to carry out the restoration of the parliamentary buildings. I'm responsible for establishing the technical requirements and Mr. Ring is responsible for managing the procurement processes. This separation ensures there are appropriate checks and balances in the system.

Today I will focus my brief opening remarks on the following three elements. First I will give you a brief overview of Public Works' mandate on the Hill; second, I will speak about the context in which the contract of the restoration of the West Block was awarded to LM Sauvé; and thirdly, I will provide you with an overview of the procurement process used by Public Works to award this project and the management of the project.

Let me begin by outlining Public Works' mandate with respect to Parliament Hill, which we carry out in partnership with our parliamentary partners, the Senate, the House of Commons, and the Library of Parliament. Public Works and Government Services Canada is the official custodian of heritage buildings and grounds on Parliament Hill. Quite simply, it is our job to make sure that the parliamentary buildings are properly managed, maintained, and restored. This involves managing a day-to-day operation, maintenance, and renovation of approximately 143,000 square metres of heritage space here on Parliament Hill as well as the buildings located on the north side of Sparks Street between Elgin and Bank.

To ensure that Public Works focuses its energy on this important mandate, in 2007 the deputy minister created a stand-alone branch within Public Works led by an assistant deputy minister. As you know, Public Works is undertaking a long-term multi-phase redevelopment plan for Parliament Hill. This plan, which was approved in 2007, has been recognized as an award-winning urban plan.

A good plan, however, is only a good start. Making it happen on time and on budget requires sound management. Just six months ago, in her spring 2010 report, the Auditor General of Canada gave an assessment of the project management approach being used by Public Works in the projects to rehabilitate the parliamentary buildings. This included an assessment of Public Works' methodologies for costing, capturing lessons learned, sustainability, and heritage restoration.

The Auditor General gave Public Works high marks and made no recommendation to improve the management of this major project. So it should be emphasized that this audit examined the management of the West Block in particular. We are proud of this recognition and will continue to build on these strengths.

Key to the management framework guiding the rehabilitation project is an implementation strategy built on rolling five-year plans that enhance accountability for projects, schedule, and budget. This framework also focuses on managing each five-year plan as an interdependent program of work rather than a series of individual projects. We have developed a robust approach to ensure we can actively manage the project costs and schedules. For example, on a monthly basis, we work with both public and private sector experts to develop new cost estimates and schedules for the entire program.

There's a graphic in front of you that illustrates the interdependency that exists between the different projects. Efforts over the past three years have been focused on completing the project to relocate MPs, senators, and a number of other parliamentary functions off the Hill so that the restoration of the main parliamentary buildings can begin. These projects are being delivered on time and on budget.

In fact, 15 major relocation projects have been completed during this time, including a new committee room facility located at 1 Wellington Street, and we are just now putting the finishing touches on La Promenade facility, where MPs will be relocated from the West Block.

Our recent accomplishments include the award-winning Library of Parliament, completed in 2006.

In a few moments, my colleague, Mr. Ring, will describe how Public Works conducts its procurement processes. However, I would first like to describe the context in which the contract was awarded to LM Sauvé to restore the West Block's north towers.

The West Block's masonry is in a state of extreme deterioration and is facing a risk of total failure in the next few years. This has been confirmed by several independent experts. So it is critical to restore the building as quickly as possible.

The Southeast Tower project served as a template for the North Towers project. It was completed in September 2008 and just recently won a major award from the Canadian Association of Professional Conservators. The evaluation criteria which were developed in 2005 for the tendering of the Southeast Tower project were the same used in 2007 for the North Towers project.

These two pilot projects were designed to increase Public Works and Government Services Canada's knowledge of the West Block's stone and structural condition, and to develop best practice approaches to the building's restoration.

As you can see, we take these projects seriously and apply a rigorous management methodology. We take the same rigorous approach when we procure expert services from architectural and engineering firms and construction companies.

In front of me are the tender documents for the North Towers project. As you can see, these documents are substantial. The intent of these detailed documents is to express our specific requirements to industry as clearly as possible and in a public manner to ensure that the process is fair and transparent. These documents guide industry's technical and bid price submissions.

Later, my colleague will explain the two-stage competitive process used for the North Towers project. You will then be able to better understand our approach, the same approach that was also used for the Southeast Tower project.

The North Towers contract was awarded after an open, fair and transparent process and the project itself was and continues to be managed fairly according to the contractual terms. The contract was awarded to LM Sauvé on May 30, 2008 and the results were publicly posted. Public servants working in separate sectors managed this process from beginning to end.

PWGSC awarded the contract for the restoration of the North Tower to LM Sauvé because it submitted the lowest compliant bid. As with every project we embark on, PWGSC made every effort to make the project a success with LM Sauvé as the general contractor. However, due to continuing and unresolved performance issues and schedule delays, PWGSC took the necessary step of removing the work from LM Sauvé's hands on April 20, 2009 to ensure that the contractual terms would be respected and that value for money would be achieved.

As part of the original tendering process, PWGSC had required that the project be bonded to provide insurance against these rare situations where the contractual obligations are not being fulfilled. This meant that PWGSC was properly insured and was able to transfer responsibilities for completing the project under the original terms of the contract to the bonding company: L'UNIQUE Assurances Générales.

The bonding company is now directly accountable for completing the project under the original contractual terms. PWGSC has no contractual relationship with any of the subcontractors. The bonding company and not Public Works and Government Services Canada is responsible for managing relationships with subcontractors and for resolving any disputes that arise.

In closing, I would like to underline that this project and other projects being delivered on your and all Canadians' behalf are managed by a group of proud professionals who are dedicated to restoring these magnificent buildings on Parliament Hill, and to doing it in a way that meets the highest ethical standards.

I will now turn it over to my colleague, Mr. Ring, to explain the procurement processes.

Thanks, Mr. Chair.

8:50 a.m.

Liberal

The Chair Liberal John McKay

The chair recognizes Mr. Ring. You are from the same organization, and generally we limit presentations to 10 minutes. However, in light of the circumstances, please speed up your presentation and come under the time limit, if you would. Thank you.

8:55 a.m.

Tom Ring Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Thank you, Mr. Chairman. I have been endeavouring to shorten it up here as we've gone on already, and I'll try to keep my remarks to a couple of minutes.

The acquisition of real property services such as construction is done in a manner that's consistent with industry practices, legal precedent, trade agreements, legislation, and government policy. Our real property contracting personnel have significant experience in contracting for construction, architectural, and engineering services.

In the past five years we have put in place over 100 construction and consulting contracts with a value of over $195 million on behalf of the parliamentary precinct branch. Major contracts for the parliamentary precinct are awarded competitively with very few exceptions, such as the stone that was procured to match the original stone for the West Block.

The major construction projects on Parliament Hill are usually contracted through a two-stage competitive process, which is common in the construction industry for technically complex projects such as heritage renovation.

The first stage is one of pre-qualification and is open to the entire industry. It is publicly posted on the government's electronic tendering service called MERX. This stage ensures that the firms who are invited to submit a tender in the second stage have the required expertise and experience for this type of specialized work. In the second stage, the invitation to tender, the firms that pre-qualified in the first stage are invited to bid, which ensures that the contract is awarded to a qualified bidder. This invitation is also publicly posted on MERX. The entire contract process and undertaking is managed by public servants as well as reviewed and approved by senior-level public servants.

The procurement process in question, the West Block north towers restoration, followed this two-stage competitive process. In stage one, seven firms pre-qualified. The evaluation criteria included the need for bidders to present information on past projects to demonstrate that they had the expertise and experience needed to carry out the work on the West Block north towers. As an example, bidders had to have experience on projects that included both historic masonry restoration and copper roof replacement, and these projects had to be of a certain value. Five of the seven submissions, including the one from LM Sauvé, were assessed as having the required expertise and experience to carry out this type of specialized heritage renovation work. These five firms were then invited to tender for the work in stage two. Bids closed on April 3, 2008, were publicly opened, and the contract was awarded to LM Sauvé.

I should explain that four amendments were published during the solicitation stage. This is quite common and usually based on questions and comments received from the industry. However, the decision to amend a solicitation document is not taken lightly. The request is assessed against the criteria of reasonableness, openness, and competition. I'm quite certain I'll get an opportunity to more fully explain those in the question and answer period. As well, we consider whether it would withstand a legal challenge. When requests make sense and meet these criteria, we will usually accept them.

All of the due diligence steps were carried out in this two-stage process. For example, the technical merit of the submission was assessed; references for previous projects were checked; the compliance of the tender was verified; the tendered price was analyzed, confirmed, and then reconfirmed with the bidder; and the security clearances were conducted. At the time the contract was awarded, LM Sauvé was a company in good standing and was carrying out projects across Canada in Vancouver, Toronto, and Montreal. In fact, LM Sauvé successfully completed some of the larger heritage masonry projects amongst the group of bidders and had the required expertise and experience.

I think I'll stop there, Mr. Chairman, just in respecting your time and to allow questions.

8:55 a.m.

Liberal

The Chair Liberal John McKay

Thank you for that, Mr. Ring.

Thank you, Mr. Mongeau.

We'll go to our first round of questioning. It's to Mr. Regan, for eight minutes, please.

8:55 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Thanks very much, Mr. Chairman.

Thank you, witnesses, for coming. I think you probably are aware that after we hear from other witnesses, we may seek to have you come back and talk to us again, because we want to hear what they have to say as well, obviously, and whether any of it is contradictory.

Your minister yesterday said that public servants are responsible for this whole process and there's no political interference. So which of you is to blame for this? You've been sent here to be the shield, I guess.

8:55 a.m.

Assistant Deputy Minister, Parliamentary Precinct Branch, Department of Public Works and Government Services

Pierre-Marc Mongeau

Thank you for the question.

Mr. Chair, I would just like to point out, as I did quickly in my presentation, that the processes in place to make sure that a project is as fair as possible are relatively simple. We have a technical team to prepare technical requirements and, on Mr. Ring's team, we have people responsible for drawing up contracts.

9 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

In both parts of the department, you people who are responsible for this process, you're saying there isn't one person in charge?

No one person is in charge and responsible for answering questions?

9 a.m.

Assistant Deputy Minister, Parliamentary Precinct Branch, Department of Public Works and Government Services

Pierre-Marc Mongeau

I will let Mr. Ring answer the question on the contractual aspects.

9 a.m.

Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Tom Ring

Thank you for the question, Mr. Chairman.

An important part of understanding the context here is the separation of the roles and responsibilities, which ensures the integrity of the process. You have groups of public servants from the technical authority, in this particular case, the parliamentary precinct branch, and in my own case, from the acquisitions branch, who are involved in assessing the criteria that would be applied in any contract, whether it's for construction or for any procurement.

This separation of roles and responsibilities ensures the integrity of the process.

9 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

I'm sorry to interrupt, but I think it was a simple question, really.

The first one was a bit facetious, perhaps, and I'm sorry for that, but is there one person in charge? Is there one person who made the decision to make that last change, with a week to go, in the bidding process?

9 a.m.

Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Tom Ring

Sir, if I could, the last change in the bidding process--is it the amendment you're referring to?

9 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Yes.

9 a.m.

Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Tom Ring

Those amendments were looked at and reviewed by a group of public servants from both branches, again to ensure the integrity of the process.

If you'd like, Mr. Chairman, I can provide further details with respect to those amendments that are being referred to.

9 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

My next question was to ask if you could provide us with all the documents relating to these contracts, to this $9 million contract that we're talking about.

9 a.m.

Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Tom Ring

Absolutely.

9 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Thank you very much.

Whom do you deal with in the minister's office?

9 a.m.

Assistant Deputy Minister, Parliamentary Precinct Branch, Department of Public Works and Government Services

Pierre-Marc Mongeau

There was no political interference from the minister's office for the entire duration of the project.

9 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

That is not the question, Mr. Chair.

I am asking you who was the liaison between the department and the minister's office.

9 a.m.

Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Tom Ring

Sir, in our contracting processes there is often.... The minister, obviously, has the ultimate authority for issuing contracts, but that authority has been delegated to public servants.

It is quite frequent for there to be no contact with the minister's office, not only on this particular contract but on many other contracts. That's quite normal process.

9 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Did anyone in the minister's office ask for a briefing on this process?

9 a.m.

Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Tom Ring

Over the last several weeks, we have reviewed the documentation, assessed and analyzed all the e-mails and correspondence, and can find no request for a briefing from the minister's office on this project, sir, during the contracting process.

9 a.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Thank you.

My colleague, Mr. Coderre, will take over.

9 a.m.

Liberal

Denis Coderre Liberal Bourassa, QC

Mr. Mongeau, were you in charge in 2007-2008, at the time of this contract?

9 a.m.

Assistant Deputy Minister, Parliamentary Precinct Branch, Department of Public Works and Government Services

Pierre-Marc Mongeau

No, I was not there at the time.