Audit bashes City tendering system

Edmonton City Hall

A sweeping review of Edmonton’s buying and building processes says city officials have rushed major projects to tender and can’t prove the system is getting good value for money.
That sobering critique from city auditor David Wiun was presented to councillors Monday.

For example, city officials went to tender on a $142-million construction project, then changed the drawings and specifications seven times during the bidding process, said Wiun.
That prompted 600 questions back from confused contractors, resulting in changes to the city’s instructions to those teams three times, and extensions to the bid deadline five times.
That was on the second try. The first attempt was so error-ridden, it had to be cancelled, Wiun said, offering this unidentified example as just one project where it was obvious city officials were rushing the process.

“It’s not good,” Coun. Michael Oshry said after the meeting. “(City officials) have been doing this for years — big dollars, lots of projects. You would think they would have that system relatively down pat already.”
“I was surprised. This is a concerning one.”

The city signs 1,700 contracts totalling $1-billion worth of construction and professional services a year.
Wiun’s recommendations included not letting an employee with a known conflict of interest evaluate the bids.
The city should also make any mandatory requirements in the bid more clear, give companies more time to bid on projects and better document how bids are evaluated.

“Eight recommendations in an audit report, that is high,” Wiun said, explaining the audit deals with one of the most high-risk areas of city performance.
Short bid timelines and confusing tenders limit the number of companies willing to bid, which can drive up costs, he said, after his team reviewed 86 tenders for projects posted and evaluated between January 2015 and October 2016.
Auditors found one case where someone with a conflict of interest was allowed to evaluate the bids, and another where someone who showed bias toward one of the bidders was allowed to continue.
When the city goes to tender, 83 per cent of the time it has to add “addenda” or additional clarification. In 16 cases, city officials had to add clarifications five or more times, which meant companies bidding on the process may scramble to change their bid.
Companies bidding on a project are not paid, and a complex bid represents up to two months of work and hundreds of pages of technical documents, said deputy city auditor Ed Ryl.
“If there are any restrictions that limit the amount of bids, any perception that bids may not be evaluated properly … and it leads to vendors not bidding, there definitely is a risk the city is not getting the best value all the time,” said Wiun. “It is serious.”
Wiun gave other examples of poor procurement practices. In one case, the city had just one successful bid. It awarded a $300,000 contract, only to be told the price would be 32 per cent higher. It accepted that without negotiation.
In another case — a bid for professional services — the city reduced qualifications halfway through to accommodate the company that won the bid. Then the company said a junior staffer would serve half the time. The city accepted that while still paying the full rate for a more experienced partner.

City officials said they accepted all of Wiun’s recommendations. Some have already been implemented and others will be done by March 31.
City financial officer Todd Burge said none of the recommendations came as a surprise to his team because they’ve been trying to improve this area for two years. They knew Edmonton had a problem after two previous audits specific to the city’s handling of waste contracts and the sand recycling program. That waste management issue involved a sole-sourced contract and paying truckers for hours when they had no work. The $74-million sand recycling contract was issued to a former employee without proper oversight.
Burge said they rolled out training for staff on the bid process and contract management in early 2017.
Part of what’s causing staff to rush is the pressure to have projects delivered on time, he said.
“Time is not the most important thing to me. I think the focus should be on value. But the pressure comes on time from everyone.”.

Elise Stolte
Edmonton Journal

John Oplanich

Mr. John Oplanich - Ward 3 John Oplanich was born and raised in the Wild Rose Province of Alberta. John grew up on the north side of Edmonton. For the past 30 years he has lived in Castle Downs in the Baturyn community with his wife Elizabeth and three children Michael, Natalie and Ariana. John spent 23 great years in the pharmaceutical industry working with one of the largest companies in the world based in Montreal and Paris, France. John is an excellent communicator who is outstanding at building relationships. He knows what the words “hard work” and “dedication” really mean. Learning first hand from his immigrant blue collar parent’s from Croatia and Italy. He has carried these same ambitions with him into the world of real estate as a Land Developer in North Edmonton and has become a very keen investor in the Valley of the Sun - Arizona. John Oplanich is a serial entrepreneur with over 25 years of experience in private sector corporate business management in various industries including real estate. Mr. Oplanich is fluent in Italian. John spent 5 years as a volunteer (Health Council) with Capital Health (Alberta Health Services) between 1999 and 2004. He was recognized with a Certificate of Appreciation for 5 years of service as a volunteer (Health Council) with Capital Health (Alberta Health Services) between 1999 and 2004. He has also enjoyed volunteering coaching over the years. He calls himself the “best gate keeper in hockey.” John spent his early years of schooling at St. Angela’s Catholic Elementary School and Sir John Thompson Junior High School. He graduated high school from St. Joseph High School in 1979. John then went on to the University of Alberta where he graduated with a Bachelor of Arts degree. His interests are economics, urban planning and health care. John is a strong believer in education and believes everyone should try that institution of higher learning once. His key concerns are Education, the Economy, the Environment and the wasteful spending which translates into more then ever taxes for Albertans. Never shy to share his ideas and successes with people he meets. He is looking forward to meeting many of his friends and neighbours in Ward 3 campaigning for City Council. Many of you probably remember John Oplanich during the City of Edmonton Civic Elections 2010 and Provincial Elections in 2012.

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