Is City Council tendering all the contacts it should?

It is the duty of City Council to spend the taxpayers money wisely. It is also the duty of City Council to ensure that it gets maximum value for the contracts it enters into and the licenses that it grants. This week I have read about two possible instances where City Council has failed to tender contracts – failing to give taxpayers the value that it should. I emphasize that I have not independently verified this. Nevertheless, these fact situations are interesting:

1. On Monday May 10,  2010 the Globe and Mail reported that the City of Toronto has failed to tender the license that allows the “Boardwalk Pub” to operate.

“For more than two decades, the owner of the Boardwalk Pub has enjoyed a monopoly on food and drink sales on the eastern beaches, the waterfront jewel that stretches from Woodbine Beach Park to the end of the boardwalk.

Now city council is poised to extend that arrangement until 2028 – without competitive bids and with sweetened terms, including the right to hawk merchandise on the boardwalk, sell booze in Ashbridge’s Bay Park and pay $50,000 less in annual rent than city council asked for more than three years ago.

That is, unless a simmering movement to kill the deal prevails at city council this week.”

2. On May 12, the National  Post reported that Rob Ford made the following comment during the May 11, 2010 debate at OISE:

“Asked last night where he would find $200-million to give subsidies to people on a waiting list for affordable housing, Mr. Ford responded that would be “simple.”

“We sole-sourced the subway contract,” Mr. Ford said. “Seimens came into my office and said, ‘Rob, why don’t we tender the subway contract? We could save $200-million.’ No, we sole-sourced the contract to Bombardier, for $750-million.”

These are issues that the next City Council must consider.
Update 1: July 15, 2010. It is interesting to see that Montreal has tendered the contract to build its new subway cars.

Update 2: July 15, 2010: Shed no tears for Bombardier. They have been awarded the contract to build new subway cars in Delhi.

7 thoughts on “Is City Council tendering all the contacts it should?

  1. Pingback: Vote John Richardson – Toronto Danforth – Ward 29 « Vote John Richardson – Independent Judgment For Toronto Danforth – Ward 29!

  2. votejohnrichardson Post author

    This issue will not go away. Check out the following about the “Beach Eatery” from the Toronto Star:

    “Council hands exclusive rights to Beach eatery

    May 13, 2010

    Paul Moloney

    City council ignored calls for competitive tendering in voting 15-12 to grant the Boardwalk Pub exclusive rights to operate in the Eastern Beaches for another 21 years.

    Critics of the deal with Tuggs Inc. are hoping council will re-open the matter. They argue that the late night vote Wednesday, with only 27 of 45 members present, didn’t reflect the true will of council.

    “We’re trying to find a councillor who will reopen the debate and re-do the vote so all councillors can vote on it,” said Beach resident Chris Yaccato.

    “We really need to reopen this so the full council can have a debate on it,” Yaccato added.

    The previous agreement expired in September, 2007 and the new one runs to September 16, 2028.

    At the time, local councillor Sandra Bussin led the charge to let Tuggs continue to operate the Boardwalk Pub and other concessions in and around Woodbine Beach Park. Bussin (Ward 32, Beaches-East York) persuaded councillors it was worth forgoing bids to keep the lease with a local family that had pumped money into the business.

    But Yaccato and other citizens had urged councillors to issue a request for proposals (RFP) to ensure taxpayers would get the best rent deal from the Lake Shore Blvd. E. eatery.

    “I’m extremely disappointed,” he said. “I’m going to fight it. The lack of public input and the lack of respect our councillors have for voters and taxpayers is evident.”

    Council rejected Councillor Adrian Heaps’ suggestion to issue an RFP.”

    Heaps said some councillors were concerned that a multi-national fast food chain could win the concession. But he noted that council has control over the terms and conditions of the RFP.

    “Some people thought there was going to be a chain of Hooters opening up along the waterfront if we opened it up to an RFP. I don’t know where that came from. It’s completely unfounded.”

    At a government management committee last month councilors were told that Tuggs is up to date on its $189,000-per-year rent due under the old agreement, but owes about $100,000 in taxes.

  3. Pingback: “The Better Way” – Anywhere but Toronto « Vote John Richardson – Independent Judgment For Toronto Danforth – Ward 29!

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  6. votejohnrichardson Post author

    Interesting commentary from the Globe

    It’s back to square one on Montreal subway cars

    Bertrand Marotte

    Montreal — From Wednesday’s Globe and Mail Published on Tuesday, Jul. 13, 2010 3:50PM EDT Last updated on Tuesday, Jul. 13, 2010 7:31PM EDT

    Bombardier Inc. (BBD.B-T4.70-0.11-2.29%) and its French partner Alstom SA face further delays and competition from a Spanish rival in the latest twist in the saga to replace Montreal’s aging fleet of subway cars.

    Montreal’s transit authority has decided to go ahead with an international bidding process for the procurement of the new cars, pre-empting the option of awarding the contract – which could be worth as much as $4-billion – to current bidders Bombardier and Alstom.

    The move caps years of squabbling and legal jousting among private-sector and public players. The Quebec government is footing the bill for about 75 per cent of the cost of the new cars.

    Bombardier Transportation division president and chief operating officer André Navarri warned last month that the company and its 90 suppliers could be forced to lay off hundreds of workers at Quebec facilities if it fails to win the contract to supply 765 cars, with an option on 288 more.

    Insisting that he was not making threats, Mr. Navarri said the highly contentious issue represents “an economic problem for Quebec, a big problem of infrastructure.

    “If it takes another eternity, if we go back to tenders, if there is another two years of delay, we won’t be able to maintain employment.”

    About 12,000 people work in Quebec’s rail sector.

    On Tuesday, the Société de Transport de Montréal (STM) said it has decided that issuing an international call for tenders makes sense given the interest in bidding expressed by Spanish firm Construcciones y Auxiliar de Ferrocarriles SA (CAF).

    Bombardier and Alstom recently lost a court bid to quash STM’s efforts to reopen bidding. They argued it would not be fair to allow CAF to bid because conditions in a new bidding procedure launched in January were “far less restrictive and demanding” than the requirements they had to meet.

    The two commercial partners also questioned CAF’s qualifications as a subway-car supplier to the STM, in a letter to Quebec Premier Jean Charest, copied to other provincial and municipal politicians.

    STM’s board of directors decided Tuesday that CAF meets its conditions as a qualified bidder, based on recommendations by both inside and outside experts, including SNC-Lavalin Group Inc.

    CAF spokesman Philippe Roy said the decision is terrific news and cited studies that indicate costs on public projects such as replacing subway cars fall by 15 to 20 per cent when they are opened to bidding as opposed to being negotiated one-on-one.

    An STM spokeswoman said the contract is expected to be awarded in the fall.

    The decision to go back to square one in the bidding process represents a threat to efforts to replace the Métro cars, which are in dire need of replacement, said public interest group Transport 2000.

    “We have no guarantee that the service will be maintained at the same level until the arrival of the new cars in at least three years,” Transport 2000 director-general Normand Parisien said in a news release.

    Slowdowns and service interruptions will be more frequent, he said.

  7. Pingback: Sweetheart deal on the beach | Vote John Richardson – Independent Judgment For Toronto Danforth – Ward 29!

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