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The O-train’s Trillium Line stop at Carleton University.
Lost amid the outrage over how SNC-Lavalin managed to secure a piece of the $4.6-billion project to expand Ottawa’s light rail transit system despite low technical marks is something more reassuring for taxpayers.
The lion’s share of LRT Stage 2 — some $2.6 billion worth of work — is being handled by a consortium led by Kiewit Construction of Omaha, Neb., and Vinci Construction of Paris.
While the Kiewit group also failed to secure top grades in a technical evaluation, it cleared the minimum 70 per cent threshold by a considerable margin. This, combined with a competitive financial package, gave Kiewit and its partners the right to build the east-west component of Stage 2, the project known as the Confederation Line extension.
Kiewit’s team will add 27 kilometres of track and 16 new stations. SNC Lavalin is responsible for extending the north-south Trillium line under a $663 million fixed-price contract. It will build eight new stations. Add in nearly $1 billion for a long-term maintenance and services contract and you’ve got $1.6 billion in total.
Examining how Kiewit won its contest makes SNC Lavalin’s weak technical marks all the more egregious.
According to documents released by the city late Thursday, Kiewit won after a very competitive battle against teams led by Spanish construction giant Ferrovial and U.S. behemoth Bechtel. The Ferrovial group scored 81.5 per cent for technical merit against 80.1 per cent for Kiewit and 77.4 per cent for Bechtel. Given the subjective quality of many of the items evaluated, this was a tight spread.
Similarly, in the contest for the Trillium Line extension contract, a group led by Acciona of Spain scored just shy of 85 per cent on technical merit, while its closest rival, Colas Group of France, obtained 84 per cent. However, the bid by SNC-Lavalin garnered 63.6 per cent in the first go-round. Even after the city’s evaluators were prompted by a bid evaluation committee to revise their assessment, SNC-Lavalin scored just 67.3 per cent.
It was only because the city exercised its right to push SNC-Lavalin into the financial evaluation stage that the Montreal-based firm received a shot at winning it all. A low financial bid ensured that it did.
If there’s any competitor that deserves sympathy for how things turned out, it’s the French giant, Colas Group. It was also a key partner in the Ferrovial bid, which means it placed first and second in the two separate technical evaluations, but won nothing for its troubles. Of course, that may have been because it was reluctant to trim its prices. It’s not clear how close the bids were overall because the city did not release the associated financial packages that composed half the total marks in these contests.
What is clear is that five of the six teams that bid on the two main Stage 2 contracts were judged to be competitive on technical merit, and roughly equally so. Then there was SNC-Lavalin.
Of note is the membership of the separate evaluation teams. Three experts — Michael Morgan, Colleen Connelly and Jack D’Andrea — were common to the Confederation Line and Trillium Line extension projects, so there was a good deal of continuity in the scoring.
But there were differences in the teams. The lead evaluator in the assessment that savaged SNC-Lavalin’s capability was Peter Schwartzentruber, who 10 years ago founded Podium Projects Inc., a consulting group specializing in delivering infrastructure projects. In 2005 and 2006, he was a senior project manager for SNC-Lavalin on a project involving the Vancouver international airport. The city hired Schwartzentruber for his independence and expertise, and that was what it got.
Among the documents published this week by the city was one that revealed sharp differences between the technical evaluation team and the bid evaluation steering committee over how the bid should be scored. (The steering committee did not know the identity of the bidder, but it might have been possible to deduce it.) In the document summaries covering the four main technical aspects — general technical, design, construction and maintenance — SNC-Lavalin’s weaknesses were extensively catalogued. Its strengths were barely mentioned.
With the other two contenders, it was the other way around. In the Confederation Line evaluation, the pros and cons were more evenly spread about.
Given the huge stakes, it’s difficult to believe that SNC-Lavalin, a very experienced bidder on public infrastructure projects, could have been so lacking in diligence. The evaluation committee said SNC-Lavalin hadn’t bothered to sign up qualified people, offered a weak narrative or justification for its bid and was disturbingly vague in many of its responses.
The bid evaluation committee set up by the city pushed back on nearly all these items … and got its way.
Just why it felt the need to do so has never been explained.
But at least the puzzle doesn’t need to consume the entire Stage 2 rollout.
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