Summary
The Office of Inspector General investigated the performance by Ricova Services of two Ville de Montréal contracts on the sorting and marketing of recyclable materials. The investigation was prompted by denunciations of a possible conflict of interest by Ricova Services, which was reselling recyclables to one of its subsidiaries, Ricova International. Both contracts were legally assigned to Ricova Services as a result of financial problems experienced by the original winning bidders.
The Office’s administrative investigation revealed that the two Montréal sorting centres are being operated by Ricova Lachine and Ricova RSC, and not Ricova Services. However, these companies did not have an authorization to contract from the Autorité des marchés publics when they began performing the two contracts, which was in breach of the applicable legislative provisions.
Regarding the performance of the obligations for the marketing and sale of the recyclables at the two sorting centres, Ville de Montréal had included a clause in the contracts whereby it participates in the revenues from the sale of the recyclables, namely tempering possible variations in the selling prices by assuming a share of the potential losses. The investigation revealed that the CEO of Ricova Services and of the other sister entities committed a fraudulent act by systematically deducting an amount of $20 per tonne prior to the sale price reported by Ricova Services for the purpose of sharing sales revenues or losses, thus depriving Ville de Montréal of considerable sums of money.
While the breaches uncovered during the investigation would justify rescinding the sorting and marketing contracts managed by Ricova Services, the City Administration would not be able to replace them within the time period required by law, which could result in an interruption in service that would not be in the public interest. Accordingly, the Inspector General is recommending that Ville de Montréal rescind both contracts as soon as possible. It further recommends that Dominic Colubriale, Ricova Lachine, Ricova RSC, Ricova Services and Ricova International be declared ineligible for Ville de Montréal contracts and subcontracts for a period of five years.
The Office’s administrative investigation revealed that the two Montréal sorting centres are being operated by Ricova Lachine and Ricova RSC, and not Ricova Services. However, these companies did not have an authorization to contract from the Autorité des marchés publics when they began performing the two contracts, which was in breach of the applicable legislative provisions.
Regarding the performance of the obligations for the marketing and sale of the recyclables at the two sorting centres, Ville de Montréal had included a clause in the contracts whereby it participates in the revenues from the sale of the recyclables, namely tempering possible variations in the selling prices by assuming a share of the potential losses. The investigation revealed that the CEO of Ricova Services and of the other sister entities committed a fraudulent act by systematically deducting an amount of $20 per tonne prior to the sale price reported by Ricova Services for the purpose of sharing sales revenues or losses, thus depriving Ville de Montréal of considerable sums of money.
While the breaches uncovered during the investigation would justify rescinding the sorting and marketing contracts managed by Ricova Services, the City Administration would not be able to replace them within the time period required by law, which could result in an interruption in service that would not be in the public interest. Accordingly, the Inspector General is recommending that Ville de Montréal rescind both contracts as soon as possible. It further recommends that Dominic Colubriale, Ricova Lachine, Ricova RSC, Ricova Services and Ricova International be declared ineligible for Ville de Montréal contracts and subcontracts for a period of five years.
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Report on the performance of contracts resulting from call for tenders 17-5849, “Design, construction, operation and maintenance of a recyclables sorting centre” and call for tenders 19-17343, “2020-2024 recyclables sorting and marketing service”