For the third time in less than eight months, the Société de transport de Montréal (STM) has been slapped on the knuckles by the Office of Inspector General (BIG) for shortcomings in the awarding of contracts. The STM has notably been lax with regard to the appearance of a conflict of interest involving its project manager, who piloted the awarding of contracts to a firm for which his spouse works, reveals a report made public on Monday .
The OIG had received a report regarding a tender that the whistleblower claimed restricted competition. On closer inspection, Inspector General Brigitte Bishop’s team discovered several breaches of the rules in the granting of two previous contracts relating to group insurance for STM employees.
Mand Bishop also raises significant shortcomings in the management of an appearance of conflict of interest of the project manager of the transport company.
Cost overruns
A first contract was awarded in 2016 by the STM to a firm for consulting services related to the group insurance program for its employees. The OIG does not name the firm in question in its report, because it judges that it is not to blame in this affair.
In 2019, the transport company’s project manager proposed to merge the seven employee group insurance contracts in order to achieve “substantial savings”. Except that the STM did not ask the firm for a cost estimate.
In the meantime, the reserve granted to the initial contract of 2016, namely $574,875, has been exhausted. The initial contract was modified in 2020, then a second contract, by mutual agreement, was awarded to the same company for an amount of $263,000, which inflated the initial invoice by 50%.
The OIG considers that the modification to the initial contract did not comply with the STM’s normative framework, and that the second contract represented in fact a splitting of contracts, which contravenes the Act respecting public transit authorities and the STM rules. In addition, the conditions linked to the second call for tenders, in 2021, restricted competition.
Appearance of conflict of interest
The OIG devotes a large part of its report to the inadequate management of the STM regarding the appearance of a conflict of interest involving its project manager.
An expression of interest from his spouse, who works for the company that won the contracts, was included in the firm’s bid. After examining the file, the ethics committee set up by the transport company concluded that there was no real conflict of interest, but “that there could be one in appearance”. . This conclusion does not satisfy the OIG, which points out that neither the employee nor his line manager were met personally by the ethics committee and that the company was not questioned about the framework which would consequently be put in place. square.
Moreover, the STM board of directors, which approved the awarding of the contracts, was never alerted to the links between the project manager and the firm’s employee.
The STM’s internal regulations require that any employee participating in the contracting process declare any appearance of conflict of interest, which was not done in this case. Framework measures were only developed after the intervention of the OIG in the file, last January. “In short, the Inspector General notes that, on both sides, the project manager and his hierarchical superiors have failed in their ethical obligations in this file. [Malgré le fait] that it was only a question of a situation of apparent conflict of interest, the laxity observed remains a source of concern and must imperatively be the subject of a tightening”, writes Mand Bishop in his report.
The STM’s board of directors finally canceled the awarding of a third contract that was to have been granted to the firm in question after its auditor general had pointed out various breaches of the normative framework.
In its response to the OIG’s criticisms, the transport company invokes an “unintentional” misunderstanding of the applicable rules. However, it has undertaken to put in place various measures to remedy this.
This is the third time in a few months that the STM has been blamed by the BIG. Last September, a report by Mr.and Bishop blamed the transportation company for breaking the law — and its own business rules — when it changed three contracts it had already awarded to suppliers, resulting in a cost explosion. Then, last February, the general inspector of Montreal had also raised significant shortcomings on the part of the STM in the awarding of contracts for work at the Bellechasse transport center.