Competition Bureau warns government on bid rigging on infrastructure projects
Bureau says it may not have resources to keep up with demand as $180 billion set to go out the door in next decade.
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The Trudeau government is spending tens of billions on transit, social housing and infrastructure projects across the country, but Canada’s Competition Bureau worries those dollars won’t stretch as far as they could because of rigged construction bids.
The bureau, the sole agency dedicated to investigating bid-rigging cases, may also not have the resources with more than $180 billion set to go out the door over the next decade.
Rigging occurs when contractors conspire in advance so as prices can remain high and everyone gets a few contracts.
“At some point there is a breaking point where we can’t look into them all, given our resources — 60 or 70 people for the country,” said Matthew Boswell, deputy commissioner with the bureau.
The Organization for Economic Co-Operation and Development (OECD) estimates bid rigging can inflate costs by up to 30 per cent. Given the amount of money the government is planning to spend, Boswell said, the practice could add up to hundreds of millions of dollars to the bottom line, even if rigging occurs in just one per cent of contracts.
“I’m a taxpayer. My friends are taxpayers. My family are taxpayers. I don’t want to see 30 per cent taken off the top because of successful bid rigging.”
On Thursday, the Competition Bureau will announce a new partnership with the RCMP and Public Services and Procurement Canada to launch a hotline where people will be able to report bid rigging and other corruption in federal contracts.
Since cities will ultimately be the ones issuing tenders for most of these projects, Boswell said, they’re helping them spot suspicious contracts.
“We’re trying to educate people how to detect this and everyone has got to be vigilant.”
He said the bureau has seen obviously questionable situations where two bids for a project are sent in the same envelope or with the same handwriting. More sophisticated examples of collusion are harder to spot.
The bureau has several criminal cases underway, and Boswell said more investigations are ongoing.
According to briefing notes Metro obtained through access to information, the bureau’s commissioner recommended a “big data” approach to help ferret out suspect bids as the government was rolling out its first infrastructure plan last year.
Boswell said such an approach could help track whether construction companies seemed to always win projects in particular regions or cities, or whether bids always split between a few companies evenly.
The bureau is working on a similar project with all federal contracts.
The government announced a comprehensive data collection project for the new infrastructure projects in last month’s budget, but that measure appears to focus more on how effective infrastructure is.
Brook Simpson, press secretary to Infrastructure Minister Amarjeet Sohi, said the data-collection measure will help.
“With better data comes better decision-making and projects that are better planned and procured,” she said.
She said that, generally, the government has audits and other measures to make sure the money is being well spent.
“We’re committed to being vigilant in monitoring the use of taxpayer dollars and ensuring that procurements are fair, transparent and consistent with value for money principles.”