“Money and corruption are ruining the land…”

“…crooked politicians betray the working man, pocketing the profits, treating us like sheep, and we’re tired of hearing promises that we know they’ll never keep.” ~ Ray Davies

Here on this site, we have revealed many breaking news stories of secret deals,evidence of corruption, collusion and a number of other shameful instances of how ‘money and corruption’ are ruining the land -our land here in British Columbia.

Sea to Sky Highway Shadow Tolls and the insidious relationship between the BC Liberals and long time, private partner Macquarie. The same partner that oddly, still managed to keep a position as advisor to the Port Mann project after a failed P3 bid, the terms of which remain secret to this day.

Canada Line construction and the ongoing, equally insidious relationship between SNC Lavalin and the BC Liberals.

Tercon vs British Columbia, a landmark case where the Ministry of Transportation and several high level government employees altered documents and hid details to purposely rig a bid and give a large contract to another ‘ preferred’ bidder.

You name it, there is not a P3 deal, nor a major transportation project that I have not examined,with confidential documents or hard sourced evidence, that does not give rise to an extensive list of questions about the governments ad hoc policies, and the lack of integrity in the bidding process. ( For newer readers, each can be read in detail, on the Best Of page up top)

Throughout these stories, there remained a dark undercurrent that repeats itself time and time again. In many stories, there are what I would consider clear indications of unethical and questionable behavior that lean towards collusion and influence of officials, both crimes in Canada under the competition bureau and of which I have previously written. Yet we see no investigations. Business continues as usual, from Gordon Campbell  onto yet an even more disastrous leader who has openly discussed her relationship with a powerful man who remains on the Board of Directors for SNC Lavelin – while the company has ongoing contracts and new bids outstanding.

This is how it works in British Columbia, with the BC Liberals.

This is the, in your face, we do what we want, way of doing business that everyone seems to have no problem with in the provincial government, that spans all ministries – none have been exempt from scandal or inference of preferred bidders. People like myself rely on close sources and data-mining to acquire evidence and documentation of contract and project details kept hidden from the public, since most FOI requests result in pages of useless redacted information.

Earlier this year, CBC did a brief story online, on a study conducted by the ministry of Public Safety into corruption in the construction industry in B.C. and in Quebec. The only real details given to the press on this report,which was not released, were that very few wanted to talk about the issue of  construction corruption in B.C. , and that the industry overall was at a medium to high risk of corruption.

Imagine that. So few of the people or organizations contacted wanted to talk about this issue of corruption in commercial construction – and by association of public sector projects, the government –  that it made it difficult to get a firm vision of what is going on. In fact, the report relied on many anonymous sources in some instances to get the information needed to make an assessment.In spite of this aura of reluctance and opposition to prying questions, the report did manage to uncover some revealing ways our public projects are at risk for corruption… and the way our government makes this possible.

The report in question was released informally to me recently following an FOI request, and confirms much of what I have reported here in many stories over the last few years. I recommend a read of the entire report, for the insight it offers into the problems facing large public projects here in B.C.

Here are some highlights:

  • Investigators found that the most vulnerable aspect of the commercial construction process, including public projects, was the procurement process ( bid process) and project management. Sources indicated officials responsible for procurement were often uninformed about the cost of construction project costs and the lack of accountability and transparency in the bidding process across Canada was noted.
  • Investigators found many factors that contributed to an environment where bribery and fraud flourished and were nearly impossible to detect,including the large scale of public projects,the uniqueness and complexity of projects,the concealment of some items of work by others, the lack of transparency in the industry and the extent of government involvement.
  • Situations that facilitate the formation of construction cartels and bribery, included the size of the project. Some projects like dams, power plants and highways that are extremely large in nature and costly,making it easier to hide bribes and over inflated  claims. It was also noted these larger projects often have a limited number of bidders, and those bidders are often well known to public officials and other bidders, again facilitating bribes and cartels.
  • Lack of transparency – costs are often kept secret even when public money is being spent. Commercial confidentiality takes precedent over public interest, and publication of financial information and routine inspection of books and records which could uncover irregularities or prevent them, does not take place. ( in the case of the Sea to Sky highway project, companies participating in the project had to sign confidentiality agreements preventing them from talking about their involvement in the project in some cases, for up to 7 years, as you can read in the Sea to Sky shadow toll series on the Best Of page at the top of my site – Laila)
  • The extent of government involvement– There is significant government involvement in public projects. Even private sector projects require government approval at different levels. the power wielded by government officials in every stage of the construction process,when combined with the structural and financial complexity of these projects, makes it quite easy for unscrupulous government officials to extract large bribes from those undertaking the projects.
  • The impact of corruption in projects goes beyond bribes and fraud, to poor-quality construction and low funding for maintenance. Because much of the infrastructure is hidden behind concrete or brick, builders can cut costs, bribe inspectors to approve sub-standard construction leading to poor quality construction.  ( In Quebec, years of this kind of construction on public infrastructure is creating a problem for the province, with crumbling bridges and overpasses that need extensive rehabilitation. Will we see the same thing happen here in British Columbia with some of our major transportation and infrastructure projects? Certainly many projects have already shown evidence of substandard quality, via the expansion joints on the William R Bennett bridge in Kelowna, and the ever collapsing retaining wall on Lougheed, part of the Port Mann project. – Laila)
  • Sources in British Columbia indicated that government officials responsible for the procurement process ( tender and bidding process) lack the required experience in relation to the commercial construction process. Many who did have the experience retired or moved onto the private sector. Government officials often failed to follow their own procurement policies. ( I have explored this in detail on a previous post, where a source revealed to me that often, the officials in charge of a project will rely on employees of a bidding company for direction, via hiring them as a consultant in the process. Fairness reviewers deemed with examining the bid process for fairness, are often seen as being in a perceived conflict via work with the government on other projects- Laila)

It is simply not acceptable, nor is it in the publics interest, to allow often incompetent, and more often unethical business practices to continue within the B.C. government. It absolutely must stop.

In 2010, in following final ruling of the decade long Tercon vs. British Columbia court case, I said the following:

“.. What is needed is a full and independent inquiry into the actions of the government then, and now, to reveal the truth of what is going on in that portfolio. If the government intends to stand by its claim of administering an honest and open government with integrity, let it start with the Basi-Virk trial upon our doorstep, and end with the Tercon Judgement. The integrity of the entire bidding process, the future of local industry in our province, and what little faith we may have remaining in our elected officials, depends on it.”

 That was 2010. As we know, the Basi-Virk trial was shut down faster than a bear trap snaps its victim, and while Vaughn Palmer picked up the Tercon story, the government denied and ignored any lingering questions.

Two years later, we find ourselves with a premier who campaigned on bringing open government to the people and then quickly revealed herself as being more secretive than Campbell ever was. A premier who mandates transparency and accountability to ensure tax dollars are being spent wisely to give British Columbians a better quality of life… but applies that mandate selectively, targeting her foes and protecting her friends.

I say now, that this report bolsters and supports my repeated calls for a full investigation  and public inquiry into the public procurement process within all ministries of the government of British Columbia, and the sooner the better.

To do anything other, is to condone corruption within government by our elected officials -a concept which should have never been tolerable in the first place.

Public Safety Construction Corruption Report PDF format ( I will be happy to email you a copy of this report upon request)

We are all Egyptians.

Fighting the good fight

I believe that any individual who has spiritually awakened in our time, to the degree that he or she finds a higher and deeper motive for living, is going to be driven to fight the good fight in one way or another.

 Whether it is through engaging with the struggle to evolve *democracy or fighting to save *the environment or remove *corrupt governments, the spiritual impulse cannot be separated from the moral compulsion to make the world a better place. And in order to fight the good fight, we have to engage, we have to get into the ring, not just stand outside it and be philosophers.

It takes guts and integrity of motive to fight the good fight.

 It takes a passionate interest in life itself.

It’s easy to stand on the sidelines, shaking your head and commenting on how tragic things are. But if you really care, you are going to be in the ring, trying to make the world a better place. And only from that position will your words and your thoughts and your insights have weight.

 When you live an engaged life, your sense of self gains depth and power and authority, and your philosophy is no longer abstract. You become a person who can really make a difference, because you are actively participating, you are digging deep, and you are pushing up against the edge of your own potential.

Andrew Cohen

(* indicates words I have substituted for effect)

A pink wash frames Mt. Baker in the southern sky beyond my bedroom window this morning, signalling the start of a new day. I woke very early, laying in the dark thinking about the quote I posted to Facebook last night.

“Our government… teaches the whole people by its example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy.” ~Louis Dembitz Brandeis

This morning, I realized I am an Egyptian.

Nothing else could explain the magnitude of outrage and desire for change that burns in my belly. Nothing else could explain why, even at this early hour, I feel like I should have a loudspeaker in my hand as I march down the centre of  the streets, drawing people to join me as I shout: ” I have had enough! ”

I have had enough of a government that issues press releases touting the “overwhelming success” of the Canada line when the truth is that line is a massive financial burden to taxpayers and in my opinion, has done little to nothing to get cars off the road. The only people who think this project is a success are the concessionaires who are getting a wonderful return on their P3 investment, among them shadow fares based on number of riders and distance travelled. This is fact, not fiction. It is yet another case of hidden debt and monetary excess that we all pay for whether we ride it or not.

For the rest of us, and in particular, Susan Heyes, it is nothing more than another reminder of why this government must go, the sooner the better.

It is a reminder that this government has repeatedly and with great air of entitlement, demonstrated that they are above the same laws the rest of us are beholden to. This it not simply a use of rhetoric on my part, it is fact. I have stacks of research and documents to back this statement up, as do a number of others.

The government has fostered an environment within itself that not only rewards unethical behavior – just don’t get caught – but encourages it by example. The government has committed to transparency and accountability, but has a record of stalling both in any possible way they can.

” The HST wasn’t on our radar.”

” We can state unequivocably that there are no shadow tolls on the Sea to Sky.”

” We’ve said all along, the government did not do anything wrong in the sale of BC Rail, it was only about two corrupt criminals and they have admitted their guilt.”

I dare not go on, it might use all my blog space. One look at the 100 reasons Campbell should go above, will also tell you why the rest should depart as soon as possible. There is no difference between any in this group, and nor will electing a new leader change what is going on inside the ministries,because as Tercon vs. BC showed us, it is often the high level ministry contacts that oversee contracts and projects who are well involved in some unethical actions as well.

We are told to put our trust in a national police force that has shown us more than a few times, that even they will conceal, deflect and spin the facts that could have shown us the truth.

We have Liberal corporate friends and associations that think nothing of using their money and power to bully and intimidate people who tell the truth and threaten their current feed at the Liberal trough. Look at how much money these kind of companies are throwing behind Kevin Falcon, skirting his own parties leadership financial limits for campaigning. Look at the movers and shakers on Christy Clark’s team. These are the people who will benefit most from a continuation of the Liberal corporate driven agenda – not you, and certainly not I, nor any other average person in this province.

Look at it. Skyrocketing unemployment, a fake deficit that is far larger than the one the government admits to, and a province in turmoil  and indecision as the two major provincial parties both struggle to choose a new leader as the old one departs and tells reporters he is proud of the feeling he has left with British Columbians…

This is the time to say enough. And mean it. No more settling, no more rationalizing, and no more excuses.

 It is not enough to stand on the sidelines and say you watched and supported while others fought for your future. It is not enough to read the stories I bring you and say: ” Wow, that sucks- the government really is corrupt!” because what if next time it is your house in the way of a road? What if it is your business their overbuilt, over-priced  project will run into ruin?

Who will fight for you then?

 You must take your future into your own hands and fight for what it right and show this government they work for us – we don’t work for them.

After all, we are all Egyptians.

” True heroism consists in being superior to the ills of life, in whatever shape they may challenge us to combat. ~ Napolean


 “For I say unto you in all sadness of conviction that to think great thoughts you must be heroes as well as idealists.

Only when you have worked alone / when you have felt around you are a black gulf of solitude more isolating than that which surrounds the dying man, and in hope and despair have trusted to your own unshaken will / only then can you gain the secret isolated joy of the thinker, who knows that a hundred years after he is dead and forgotten men who have never heard of him will be moving to the measure of his thought / the subtle rapture of postponed power, which the world knows not because it has no external trappings, but which to his prophetic vision is more real than that which commands an army.

And if this joy should not be yours, still it is only thus you can know that you have done what lay in you to do / can say that you have lived, and be ready for the end.”

 ~ Oliver Wendall Holmes Jr., Judge and jurist.

I have on good authority that tomorrow is the day the ruling will come down in the appeal of former Cambie Street merchant, Susan Heyes award of damages from Canada Line, Translink and Intransit BC. 

The timing is remarkable, for reasons that will soon become evident, but on this night before, I cannot but think of what a hero she has become to so many people, regardless of the outcome of the case.

I met Susan a couple of years ago downtown at the courthouse on a day I attended court to see the Basi-Virk proceedings. I liked her immediately, the kinship evident after a half hour of discussion in the main hall. 

Her fiery hair is greatly indicative of her spirit, her eyes indicative of a weary soul who wishes only for justice and closure after so many years on the battlelines.Tall in stature, she paints a strong, statuesque silhouette in any venue. Ironically, the courthouse suits her well – lady justice could not be played by a more appropriate woman than Ms. Heyes…

” I believe in truth. I believe in truth and honesty,and in doing the right thing. Most of all, I believe in justice…”  was her reply to me when I asked what drew her to the hearings that day. I knew immediately that this was a woman who, no matter what obstacle came her way, would be triumphant in righteousness regardless of how events unfolded in her personal, but very public, battle against the big guns in government. And I liked that about her immensely.

In many ways, Ms. Heyes has become a hero to thousands of people across BC. She has done the unthinkable, the unimaginable. She stood up in the face of near defeat and said:  ” No. No I will not stand back and let you do this.” and took on three levels of government, something many people think about doing, but never do.

As someone who researches,and writes in an effort to find the truth, to expose the facts behind the fallacies and deceptions of a government that routinely crosses the line, it is safe to say that while Susan’s case is likely the most publicized case of David vs. Goliath, it is certainly not by far the only example of government playing roughshod with little regard for those in their path.

Take Pavi Khunkhun, the hotel owner from Golden facing economic ruin in the face of Kicking Horse highway upgrades, much like Susan faced. Unable to find a lawyer to take his case, Pavi was determined to find a way to get the government to do the right thing.

Or Tercon Vs. British Columbia, a case revolving around contracts and the extent to which the Ministry of Transportation and Highways would go to conceal the truth, alter paperwork and misrepresent bids in a competitive tender situation – a case that spanned 10 years and changed the way bidding and contracts are handled with government around the country.

Yes, to be certain Ms. Heyes case is  but one among many that demonstrate how this government likes to do business, and it isn’t pretty. The South Fraser Perimeter Road has uprooted historical Delta families who have lived in the same place so long they have streets named after them. In the face of the Goliath persona so much of our government has assumed, most give up before the battle even begins in earnest, not willing to wager years of their life on an unknown end result. 

But Susan did. And for that she must be supported, commended and applauded.

No one can say what decision the court has reached. No one but Susan knows what it feels like the night before such a monumental moment in one’s life. But I do know this. No matter what the outcome is, she has become a hero in everyone’s eyes for taking on the impossible, the unthinkable, and for doing it with a passion that never took away from who she is.


We have a Legal System here in BC – but do we have Justice?


On May 27th, 2009, after four years of litigation, BC Supreme Court Justice, Ian Pitfield, awarded $600,000 in damages to my company Susan Heyes Inc. as compensation for business losses caused by the construction of the Canada Line.  The appeal of this ruling in my favour was heard April 15th, 2010.  

Today, the decision was finally announced, that shockingly contradicts the findings of the lower court. 

In upholding this appeal, the legal system has supported the confiscation of individual citizen’s livelihoods by government funded private, for profit ventures. This shocking ruling has failed to protect the rights of citizens, and has failed to uphold justice and fairness in a democratic society.

The Canada Line project was built on the backs of hundreds of blindsided small business people along the Cambie corridor.

The project chose the most disruptive of several methods of construction.  This discretionary and confidential decision alone should have negated the defence of Statutory Authority which the Appeal Court Justices used today as the basis for their ruling. 

Under the law, the defence of Statutory Authority can only be used when it is proven in court that no other less disruptive method of construction was available. Instead of the devastating cut-and-cover construction, a bored tunnel method was not only available, but it was the basis of all public consultations and years of engineering reports and studies.

This project was enabled by the strategic use of confidentiality agreements at every stage, leaving citizens and even municipal officials misinformed and out of meaningful consultation. The last minute secret switch from underground bored tunnel to cut-and-cover, was never approved by Vancouver City Council, as a decision making body. They had authorized the City’s Engineering Department to negotiate the agreement that provided access to Vancouver’s streets for the project in a vacuum.  The engineers were forced to sign confidentiality agreements that prohibited them from informing their bosses – City Council – of this critical switch. 

I question the validity of any contract or agreement that allowed this project to proceed, that was obtained in the absence of the whole truth about the project and its impacts on citizens and small businesses. Compensation should have been factored into the business plan.

I am appalled that our legal system has failed to support the rights of citizens, and has attempted to provide a legal justification for the excessive harm caused by this P3 project. I further wonder how many tens of millions of dollars have been spent to legally defend the project, instead of fairly compensating the victims.  

The May 27th 2009 ruling from Justice Pitfield must be upheld by the Supreme Court of Canada. The outcome of this litigation will set a precedent for all small businesses across Canada. The precedent that it sets should be just and fair, and reasonable. When governments use their powers to confiscate value for the common good – individuals must be compensated.

Susan Heyes


4255 Main Street

Vancouver, BC

V5V 3P9

Fraser Transportation Group chosen as preferred bidder for South Fraser Perimeter Road, surprising many.

The  Ministry of Transportation  issued a long-awaited press release Friday- late,late Friday –  surprising many industry insiders by announcing  that the Fraser Transportation Group  has been chosen as the preferred bidder and will proceed to the final stage of the procurement process for the South Fraser Perimeter Road project. 

I say surprising because many industry insiders thought SNC Lavelin of the Riverway Partnership were shoe-ins following the Port Mann bidding debacle that awarded that project to Kiewit-Flatiron, despite their failure to secure financing as required. Had the MOT deferred to the next best bid when that occurred, SNC would have been building the Port Mann right now, instead of Kiewit.  Rumour also had it that SNC had been considering legal recourse because of this, but decided against such action so as not to be blacklisted by the province on other projects- ( See Tercon vs. MOT/Province of BC, to find out what happens to contractors who complain too loudly) 

However, there was something else very surprising that I notice in the  SFPR Press Release

VICTORIA – Fraser Transportation Group has been selected to proceed to the next stage of procurement as the preferred proponent for delivery of the next phase of the South Fraser Perimeter Road project. This stage involves detailed negotiations for finalizing a contract. 

 Fraser Transportation Group includes ACS Infrastructure Canada Inc. and Ledcor Industrial/Mining Group Ltd. as equity partners, and Dragados Canada, Inc, Ledcor CMI Ltd., Belpacific Excavating and Shoring Limited Partnership and Vancouver Pile Driving Ltd. as the members of the design-build contractor. 

There appears to have been a significant change in the make-up of the proponents in the group itself, because in the announcement of the three qualified short-listed bidders,   The Fraser Transportation Group looked like this: 

Fraser Transportation Group –  includes Iridium Concesiones de Infraestructuras, S.A. of Spain and Zachry American Infrastructure of Texas as equity partners and Dragados S.A. as the lead design build contractor. 

Wow. So… Am I right to ask the question : What the heck happened to that pre-qualified bidding group? Iridium( From Spain) and Zachry ( of Texas) are now gone as the equity partners, replaced by ACS infrastructure Canada, and Ledcor Industrial /Mining Group Ltd.  That is a complete change from the “Pre-qualified bidders” listed in the original announcement. 

Not only that, Dragados Canada  were listed as the lead design/build contractor in the original announcement, which now lists Ledcor CMI Ltd., Belpacific Excavating and Shoring Limited Partnership and Vancouver Pile Driving Ltd. as part of the design-build team. 

What happened to the original bidding team? Why the complete change in equity partners? No money? Companies backed out?  Call me a cynic, but I would say that Jane Shackell, the ” fairness  reviewer”  appointed to oversee and monitor the procurement process, has her hands full on this one. One of the most popular blog series I’ve ever written covered the near decade long Tercon vs. BC/MOT lawsuit, in which  a change to the makeup of a ” pre-qualified” bidder during the procurement process, ultimately led to a supreme court win for the contractor. In Tercon vs. the MOT/Province of BC, an unqualified contractor was added  on as a concealed partner with an already qualified bidder, and  this change was subsequently concealed by MOT staff  at many different levels to avoid complaints from  the other qualified bidders who may have been rightly awarded the MOT job. Full details are in this post, which contains links to the other two parts of the series. http://lailayuile.wordpress.com/2010/02/17/tercon-contracters-ltd-vs-british-columbia-the-rest-of-the-story/ 

One would certainly hope the province has not overstepped in this case, because this seems to be a significant change to the makeup of the preferred bidder. (Not that I mind seeing smaller local companies doing work, rather than Kiewit and SNC Lavelin- so long as the bidding process was fair, transparent and honest ) 

 Also of extreme importance in this press release is the notation that the SFPR is now slated for completion in 2013,  which is a full year behind the original completion date 2012. I stand by my source that the project has been scaled back with significant scope changes and that can only mean one thing. Money. money. money… ( out of interest, click HERE to see political donations by LEDCOR)

While I am on the subject of money, it certainly would seem that Kiewit, the main contractors on the Sea to Sky highway and of course, the Port Mann bridge…. have a hell of a lot of extra money to toss around on campaign contributions -and the timing of them is  certainly interesting, to say the least. 

S-A1-A – Your Search Criteria
Contributor Name Date From Date To Party
kiewit      (ALL)
  S-A1-A – Your Search Results
  Total Contribution For This Search: $81,575.00 
Records 1-13 of 13 
Contributor Name Date Amount Party Class Principal Officer 1 Principal Officer 2
PETER KIEWIT SONS CO LTD. 2008/12/03 $1,875.00 BC LIBERAL PARTY 2    
PETER KIEWIT SONS CO LTD. 2006/09/29 $3,000.00 BC LIBERAL PARTY 2    
PETER KIEWIT SONS CO LTD. 2007/04/24 $1,000.00 BC LIBERAL PARTY 2    
PETER KIEWIT 2009/04/02 $2,000.00 BC LIBERAL PARTY 1

Note the rather obese contribution to the BC Liberals mere days after the last election….and in the rest of 2009. Now, call me speculative, but if I were a  contractor who had just been chosen to build the Port Mann Bridge, even after my financing fell through,( see link above on Kiewit)  and the province went to a great extent to give me that contract, even changing the project from a P3 to a taxpayers fully funded one to do so….. well, I think I would be really appreciative too.  Not sure those contributions paid off for the SFPR bid though…lol. 

It brings me back full circle to the topic of campaign contributions and conflict of interest which we have been talking about on and off over the past bit. Lets even toss in  how they relate to collusion and corruption. 

 While it is certainly not illegal for any one person,  or any company to donate to one political party or another, I find it remarkable that anybody could say these donations, especially such sizable ones such as Kiewit’s, have no bearing or influence, nor do they represent any conflicts in the various situations that invariably pop up along the way. 

Poppycock.  Do you honestly think a $50 grand donation from Kiewit doesn’t help to grease the wheels along the way? Keep them at the top of the Special Donors list? Of course it does. To think anything else is to be as naive as a new-born babe. 

Just for fun, because yeah, I’m kind of geeky that way, I did a bit of an update to a previous list of large donors to the BC Liberals, from their 2007 reported ones. Donors that also seem to get the lucrative government contracts along the way, donors who have boards of directors padded with ex-MLA’s and political movers and shakers. 

Donors that know how business works in BC. 

* 2009 donation amounts listed only- click on provided link to see past donation history. 

Teck Cominco and subsiduaries:  $150,800.00 

Goldcorp: $88,500.00 

Encana : $118,000.00 

Telus : $68,123.52 

Aquilini Group : $ 80,700.00 

Brookfield Asset Management/ Brookfield Timber Management : $ 60, 000.00 ( note Richard Legault and Barry Blattman, whose names seem to come up in everything Liberal related. 

Timberwest: $ 60,988 

West Fraser: $ 108,089 

Catalyst: $ 24, 500.00  ( guess they couldn’t have been doing too poorly if they could still afford donations to the Liberals…  

Jim Pattison Group and Great Pacific Investments: $10,500.oo ( down from previous years)   

Well, that’s all folks. If you are an average person like me, this all stinks to high heaven. Smaller companies who can’t , or won’t play the game are getting left out in the cold time and time again.  Clearly, it’s not what you know, it’s who you know -and how much you donate to them. Think about that next time you are driving over the Port Mann bridge…

Tercon Contractors Ltd vs. British Columbia ( Ministry of Transportation and Highways)

If it can be said there is any good that has come from the infamous and inexhaustible BC Rail debacle, it would be that it opened my eyes to much of what goes on with the tendering process within many ministries of the B.C. government.

In particular, tendering irregularities, for lack of a better word. Irregularities and mysteries as to how public contracts are awarded to the companies who submit bids for them, big or small.

 I’ve blogged several times about the sea to sky highway ( or the Sea to Sly Highway, as I refer to it), and the Port Mann bridge project, both with regards to the contractors and how  or why those bids were awarded.  I’ve been told by many professionals within the  BC road construction industry that there are serious questions many contractors have regarding  the entire tendering process, whether it be the P-3 model, or what was traditionally an open bid and award process for public projects. Throughout the conversations I’ve had, one thing became glaringly clear :  something is wrong with the tendering and bidding process for public projects in BC.

And nowhere is this more substantially shown than in a lawsuit that has been quietly going on since 2004 , when  a  road construction company said enough is enough, and took the Province of British Columbia to court :  Tercon Contractors Ltd. vs British Columbia ( Ministry of Transportation) .

I say quietly only in reference to the  mainstream media, of course, because I could find naught about it in the news most people read, but law journals, legal publications and construction companies everywhere in Canada have been buzzing about it for years. The implications of the pending outcome of this case are serious for the construction industry across Canada, as well as for how governments conduct the bidding process.

It is a long case, but easily understand to most and there are certain to be arguments made for those legally inclined among you, but let me take you through the gist of it.

The  B.C. Ministry of Transportation and Highways put forth a request for  Expressions of Interest to construct  a 25 kilometre strip of highway in northern BC, in 2001. 6 companies responded to that request, and were evaluated for eligibility through the ministry’s process.

 The Ministry then issued a Request for Proposals, of which only the shortlisted companies that met the eligibility requirements would be allowed to submit proposals. Tercon  and another company, Brentwood Enterprises, both made the shortlist of  companies that met the eligibility requirements.

At some point prior to the submission of the RFP, Brentwood –  who had become eligible based on their company alone –  took steps to enter into a joint venture with another company that had not undergone the eligibility review of the initial process, and the ministry was made aware of this prior to their submission.  Now, this is where it gets sticky.

This excerpt from a case-law comment provides the easiest explanation of what happened then:

Through a series of correspondence and discussions, both pre- and post-RFP closing, the Ministry was alerted to the fact that the Brentwood proposal was, in essence, a joint venture submission on behalf of Brentwood and Emil Anderson.

However, in an attempt to submit a compliant proposal, the Brentwood/Emil Anderson proposal was submitted solely under Brentwood’s name.

  When the Ministry conducted its evaluation of all proposals, the “Brentwood” proposal received the highest rating. Recognizing the potential problem with the Brentwood submission, the Ministry sought legal advice as to how it might accept the Brentwood proposal despite the fact that it was essentially not a submission by a firm short-listed as a result of the RFEI evaluation.

In addition, the Ministry actually amended draft copies of evaluation reports to hide the fact that the Brentwood proposal was truly a submission from a joint venture and amended the terms of the construction contract (“Contract B”) to identify Emil Anderson as a “major member of theContractor’s construction team.” 

Ultimately, the Ministry awarded the construction contract to Brentwood and Tercon sued for breach of Contract A.

The judge found in favor of Tercon and awarded the company $ 3,293.998.00 in damages. She had this to say in her summary, which can be read in the following PDF file  : tercon reasons for judgement 2006 

 The Ministry acted egregiously when it knew or should have known that the Brentwood bid was not compliant and then acted to incorporate EAC indirectly in contract B whilst ensuring that this fact was not disclosed. These circumstances do not lead this court to give aid to the defendant by holding the plaintiff to this clause.

 Of course, the ministry appealed, and the judgement was overturned because the appeal judges felt the exclusion clause built into the contract spelled out the terms concisely and without mistake.

 In their eyes, despite the ministry’s involvement in accepting an ineligible bidder, and disguising that fact from other bidders and their own documents,  the clause excluded the ministry from any actions brought forth by other bidders, as Tercon took to do.  That case summary can be read HERE.

Again, the full implications of the case have yet to hit home, because Tercon took leave to appeal to the Supreme Court, who heard the case early last year : http://www.scc-csc.gc.ca/case-dossier/cms-sgd/sum-som-eng.aspx?cas=32460

The Supreme court has yet to rule on this case, although the fact that they are taking so long  would seem to suggest a favorable rule towards Tercon, as relayed by some construction lawyers across Canada. Clearly, there stands at risk  the entire integrity of the bidding system, which appears to be horribly breached.

Should the Supreme court rule against Tercon, we can expect what many categorize as the currently unfair and irregular tendering process to continue, with the resulting  consequences.  As stated in this case comment on the BC appeal:

For many years, Canadian courts have recognized the need to protect the integrity of the tender process. Our courts have often acted boldly to ensure fairness in the tender process, but our courts are ultimately constrained by the law of contract in affording relief to aggrieved bidders.

Where owners have acted unfairly, courts have often decided that the bid contract (created when a compliant bid is submitted) contains implied terms prohibiting that unfairness. When owners have responded by including, in the next call for tenders, express terms which give them wide latitude in the way bidders can be treated, the courts have attempted to interpret those express terms in ways which preserve the integrity of the tender process.

This contest between owners and the courts has resulted in tender packages containing terms which are more and more explicit in favor of owners, and which have recently created much difficulty for our courts in trying to maintain the integrity of the tender process.


Owners need to understand that if they include tender terms that allow them, with impunity, to treat bidders unfairly, they may see fewer bids, intentionally non-compliant bids, and higher bids.

 If the Instructions contain terms which allow owners to treat bidders in a way not normally expected (for example, allowing owners to accept non-compliant bids, allowing owners to negotiate with bidders after the close of tenders or prohibiting any claims by bidders for anything related to the tender process), then potential bidders may decide against bidding, may submit an intentionally non-compliant bid (revocable at any time) or bid higher than they normally would.
I would be terribly remiss to fail and remind you that  Judith Reid was the transportation minister at the time this project was being bid on. Kevin Falcon took over the Ministry of Transportation in January of 2004, where he remained until last year. I wonder what either would have to say should the Supreme court rules in favor of Tercon and the $3 million dollar judgement ordered to be paid out by the Provincial Government ?
$3 million of taxpayers money, at that. 
But there is more. Although the bulk of complaints about the government procurement process have occurred in recent years, tendering irregularities  go back  further than that. In the 1990’s, Tercon took the provincial government to court in a wrongful award suit, and won damages as well.  Details are in this PDF document : tercon reasons for judgement north island highway
The government appealed and  was unsuccessful in their appeal . The judgement was upheld, and it is believed that this initial case paved the road for the case Tercon is currently awaiting ruling on from the Supreme court

 Whether  the actions of the government are due to honest mistake, ignorance, incompetence or  corruption in either of these cases, is completely open to interpretation, and I will let you decide for yourself what you believe after reading the links and documents within this post.

 Clearly, something is grievously wrong with how things are operating within public process in British Columbia, and  the question must be asked, why does it continue unabated?

My curiosities for this type of ad hoc policy began when the Port Mann bridge bidder lost their financing and the province still awarded them the contract- simply making the project a public one, rather than a P-3. 

 Even to a layperson with little knowledge of tendering, bids and contract law, it would seem odd. One would think that if the successful bidder could no longer meet the specifications and requirements  of the bid,  in particular, an inability to provide the financing demanded by the province, that the deal would be null and void and the contract would be awarded to the next lowest bidder who met the qualifications. 

It just makes sense – or at least it does to me.

 But then I became really piqued by all the emails I began receiving from very knowledgable people in the industry, who said this kind of thing happens all the time, even with public projects. I posted an excerpt from one of those emails in this post here, highlighted in yellow. I suggest you read it if you have not, because it spells out the issue with the Port Mann failed P3 proposal so concisely.

Many in the BC construction industry have been complaining for years about what they call the lack of checks and balances in public project procurement. This article from 2008, written by Steve Weatherbe,  highlights a concern held throughout much of the industry at that time. Here is  an excerpt:

Then there is the whole public procurement picture in the province, formerly done according to the traditional open and transparent bidding process. This has gone by the boards, says Knappett, since the Liberals disbanded the Capital Division of the Finance Ministry, which had enforced these practices on various spending authorities such as school and hospital boards.

Now a method called “construction management” has replaced the traditional method where the projector commissions a design and puts out tenders based on it, awarding the low bid. Now the projector seeks a contract manager based an ad-hoc points system which according to Knappett is often tailored to favour a company already doing business with the projector. School boards, universities and hospital boards on Vancouver Island are now using this method for contracts too small for P3s.

Greg Baynton, president of the Vancouver Island Construction Association, says the industry has been trying for five years to get the Liberal government to discuss the issue. His view is that the government has hitched its fortune to the P3 star in reaction to the 100-per-cent cost overrun of the Vancouver convention centre.

But the overrun was not an indictment of the traditional tendering system, he says. “They had such a sense of urgency about the convention centre they removed the checks and balances.” The originally projected cost of the centre, moreover, was concocted out of thin air. No design had been done first upon which to base an estimate.


“What happens when contracts aren’t tendered openly and the results aren’t transparent?” asks Knappett. History provides the answer in one word, he says: “corruption.”

It’s 2010 now, and nothing has changed since the publication of that article. At the time, then finance minister Carole Taylor had this to say about P-3’s and other public project procurement issues :

Finance Minister Carole Taylor told the Business Examiner that, local contractors are often let in on the big P3 projects as sub-contractors.

“They are a huge success,” she said. “There are over 20 now and all are on budget.” She cited the huge overrun with Vancouver’s convention centre as an example of what can happen without P3s.

“When we can transfer that kind of risk to P3s, we do.”

Taylor further contended that Partnerships BC is not necessarily involved in P3s: the independent spending authorities can negotiate these on their own.

As for procurement by these authorities of projects not destined for P3s, Taylor said the provincial government was looking into the construction industry’s complaints about inconsistency.

Today, the complaints remain regarding the entire tender and bid process in British Columbia. But isn’t it refreshing to hear that the person being billed as a shoe-in for premier loves the concept of P-3’s?

Another thought that occurred to me while looking over all of this, is why hasn’t someone taken this up with the competition bureau? If they can address bid-rigging, they should be able to address these procurement irregularities, because the effect is essentially the same. Collusion, and deception, resulting in the same companies getting all the jobs – over and over again. Seems to be an unfair market practice if you ask me.

  Should the Supreme court find in favor of the Province of British Columbia in the Tercon case, construction companies and contractors  can look forward to more unease when submitting bids to the ministry.  A ruling of this nature would be saying in essence, that it is perfectly legal  for the province to treat bidders however they wish to – with unfair practices, or  even with the use of deception, as long as the exclusion clause is there.  To say that this opens the door to intentionally non-compliant bids is an understatement.

My hope it that the court sees fit to uphold the integrity of the bidding process,  and rule in favor of Tercon, so that contractors can feel safe to bid in good faith without worrying whether or not the province is making deals on the side.

To do anything other, is to condone corruption within government by our highest court- a concept I find disturbing, to say the least.