Taggart Construction raises questions about $12.9 million Kingston Big Dig RFP contract award

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Ottawa Construction News staff writer

Despite possible legal action and a contractor’s claim that the city has agreed to pay $1 million more than his company’s lowest competitive bid, the City of Kingston has decided to proceed with a $12.9 million roadwork contract through RFP awarded to another contractor.

The third phase of the Princess Street reconstruction — Big Dig 3— will proceed under a legal cloud.

“We are still waiting for a legal opinion from our legal staff and, until we have it in hand, we have not made a decision on further steps,” Taggart general manager Doug Haight said in an interview. “I’m hoping that will happen within a couple of weeks.”

“We are still not in belief this type of work should be called as an RFP as opposed to a tender, and both Taggart and the Kingston Construction Association (KCA) would like to see that change,” he said.

Councillors voted 12-1 in early October to award the contract to Len Corcoran Excavating even though the company’s bid was $1 million higher than Taggart, its only competitor, The Kingston Whig-Standard has reported.

City staff contend that RFPs give them more flexibility than a tender to pick the right company proposal.

In the RFP model, bidders are ranked according to weighted criteria; in the Big Dig 3 case, cost accounted for just 40 per cent in the final decision, the newspaper reported. And Corcoran had an advantage because it had been granted the contracts for the previous two Big Digs in 2009 and 2012, also based on RFP awards.

In an unprecedented move before council, Haight appeared as a delegation to speak to the recommendation from staff that Corcoran would be getting the contract over his company, the newspaper reported.

Normally, contractors cannot lobby staff, unless the final award comes down to a decision of council.

Haight said before council that RFPs should only be issued for projects “which cannot be fully defined” and require flexibility on the part of the contractor as the work moves ahead.

“He described the terms of the Big Dig as being ”fully defined,” including such items as 137 detailed drawings, completion dates and an outline of public relations needs,” the newspaper reported.

“Public relations include the efforts to keep walkways open to individual businesses while the estimated six months of work proceed.”

Haight was quoted as saying that his company has experience working on similar sensitive projects, citing original downtown street as long ago as 1982 and, more recently, performing “complete underground and surface reconstruction” on Stuart St. near Kingston General Hospital.

He said that if a tender had been put out for the Princess St. project, Taggart’s lower bid of $11.9 million would have succeeded.  Instead, he said, the RFP process “seems to lack transparency,” reflected in the fact that only two companies put in bids, the Whig-Standard reported.

“There are many contractors in the area that are not submitting, simply because it is an RFP, not a tender,” Haught said. “A number are not competing.”

Coun. Adam Candon asked Haight what his company might do if it were not awarded the contract.

“We will push for not using the RFP in future as well as looking at our legal position. We feel we are on strong legal ground. This was a tender,” he said before council.

Ed Smith and Doug Ritchie, representing the downtown business association, spoke in favour of awarding Corcoran the contract because of its track record from the previous two Princess St. digs.

They said timely completion is important for saving stores and shops from going out of business.

Corcoran received positive reviews from shop owners for their efforts to keep their stores accessible to customers by setting up mazes of steel fence walkways and having “greeters” there to show people the way around.  Ritchie said in some cases Corcoran employees carried parcels and even picked up people in their wheelchairs to get shoppers where they wanted to go.

“One million dollars is lots of tax money for sure,” Ritchie said. “In this case, I think it’s a bargain investment in preserving the downtown. I don’t think the cost compares to not bearing the cost whatsoever.”

Ottawa lawyer Dan Leduc spoke for the for the KCA an organization to which both Taggart and Corcoran belong, saying that he wasn’t advocating for one company or another, but wanted to speak about how the contract was awarded.

“I actually believe it’s a tender,” he told council, citing Supreme Court of Canada case law, which, if followed, would have required the city to accept the lowest compliant bid.

Coun. Liz Schell asked Leduc why the construction association had waited so long to attend council with complaints about the contract awarding process. He was quoted as saying in response that the association has tried to talk to city staff since 2010.

“I can tell you KAC has concerns. Your process should be fully open,” Leduc was quoted as saying. “The fact you got two submissions tells me you have a problem.”

He told council that an RFP is more appropriate when a project is to be built in an open field and the contractor must respond with the basics, starting with design and including final price.

In Council, Mayor Bryan Paterson reportedly expressed the opinion of several councillors when he said there were two distinct issues at play: the use of RFPs versus tenders, and the issue of whom to select for the Princess St. work.

“For better or for worse, we decided to go with an RFP,” Paterson said. “The moment we did that, we allowed we might not get the lowest price. It would be inappropriate to change the rules now.”

Coun. Kevin George said it wasn’t a good sign that only two companies had bid on the project and encouraged city staff and the construction association “to sit down and have a very serious discussion about whether the RFP or the tender process is the way to go.”

“It’s a little late to try and back out,” he said.

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