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.
9:05 a.m.
Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services
The second amendment was a reduction in the experience that you needed to supply as a masonry company. This second amendment advantaged the competitors of LM Sauvé, because LM Sauvé had met the requirement previously, and the first amendment was considered—
9:05 a.m.
Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services
I'll just provide the explanation, Madam Bourgeois.
The first amendment was considered on the basis of the criteria I outlined in my speaking points: was it a reasonable request? We looked at the request from LM Sauvé and found that it was reasonable, and in fact we had made a similar change in the criteria for the southeast towers. So there was no reason to not accept that request.
It was posted on MERX seven or eight days before the closing of qualification, and there were no questions and no complaints about that change. In fact, our view is, if we had not made that change, we would have left ourselves subject to legal review from LM Sauvé for making an unreasonable request and a more stringent requirement than was necessary and that we did for the southeast towers.
9:10 a.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
Do you have any evidence for that, Mr. Ring? Those were internal discussions, inside the department, I imagine. Were any documents requested or exchanged that you could provide to the committee?
9:10 a.m.
Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services
Yes, absolutely, I can provide you with documents.
9:10 a.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
Is it common to modify requests for qualification or tenders like these?
9:10 a.m.
Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services
Yes, it is, but I will ask my colleague to give you more details.
9:10 a.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
Please do it quickly, because we do not have much time.
9:10 a.m.
Jacques Leclerc Senior Director, Real Property Contracting Directorate, Department of Public Works and Government Services
Yes, it is very common.
9:10 a.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
Do you need approval from the minister, or just from people in the department?
9:10 a.m.
Senior Director, Real Property Contracting Directorate, Department of Public Works and Government Services
We have absolutely no need for approval from the minister. Most of these requests are technical in nature. The project team and the contract management team make sure that things stay fair for everyone. Permission is granted and changes are made.
9:10 a.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
According to the media, the contract amount was $2 million less than all the other competitors' bids. That is an unusually low figure.
Did that not raise a red flag? Did it not raise questions in your mind?
9:10 a.m.
Senior Director, Real Property Contracting Directorate, Department of Public Works and Government Services
Yes, it raised several red flags.
9:10 a.m.
Senior Director, Real Property Contracting Directorate, Department of Public Works and Government Services
In situations like this, bids are opened in public. I imagine that LM Sauvé realized that its bid was much lower than the others. Actually, it was $1.7 million lower, not $2 million.
The project team and the people responsible for the contract asked Paul Sauvé to meet with them. Each detail of the bid was checked line by line to make sure that nothing had been left out or that no basic error had been made. The company's explanations were seen to be satisfactory because you have to remember that the company was its own masonry subcontractor, and was very competent in that area. That gave it a big advantage.
9:10 a.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
I would like to go back to my colleague's question. Did you check LM Sauve's history? I imagine that a company that does business with PWGSC must provide a bond or must be solid enough to hold up its end of the contract. Was LM Sauvé in a position to do that at the time?
9:10 a.m.
Senior Director, Real Property Contracting Directorate, Department of Public Works and Government Services
At the time the contract was awarded, all indications were that the company was in a position to do it. I think you have almost answered your own question. They had a bond from an insurance company, just as required.
9:10 a.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
I find that strange. You say that they had a bond, you awarded the contract in 2008, and, in 2009, they went bankrupt. How can you explain that?
9:10 a.m.
Senior Director, Real Property Contracting Directorate, Department of Public Works and Government Services
We have not yet received confirmation that the company really has gone bankrupt. But LM Sauvé was replaced because its performance was unsatisfactory. They were not working to the schedule and no progress was being made. When we asked for explanations, when we wanted to know their plans, how they proposed to make up for lost time and to manage all the subcontractors, they really had no convincing answer.
It is just a theory on my part, but I suspect that LM Sauvé was very busy with the city hall in Montreal. They were not making enough effort. For us, it was very simple: if a contractor does not perform, the responsibility for the work is taken away.
9:10 a.m.
Bloc
Diane Bourgeois Bloc Terrebonne—Blainville, QC
As far as the risk management is concerned, we have the bond. But we are also managing the people in and around the company.
So I imagine you did your research. You went to see who was hanging around the company. Did you meet a person named Varin?
9:10 a.m.
Senior Director, Real Property Contracting Directorate, Department of Public Works and Government Services
I have never met Mr. Varin and I have never spoken to Mr. Varin.
9:15 a.m.
Bloc
October 26th, 2010 / 9:15 a.m.
Conservative
Chris Warkentin Conservative Peace River, AB
Thank you, Mr. Chair.
Thank you, gentlemen, for coming this morning. We appreciate your testimony.
Further to the questioning that was undertaken previously by my colleague, I want to continue to follow that up.
Has Gilles Varin or any lobbyist ever contacted Public Works representatives to lobby on behalf of any organizations on this project?
9:15 a.m.
Assistant Deputy Minister, Parliamentary Precinct Branch, Department of Public Works and Government Services
Thank you.
Mr. Chair, as my colleague mentioned, when we first heard these allegations, we searched through all our e-mails, we questioned all our employees and we checked our documents to see whether Mr. Varin's name appeared. We found no indication that it did.
