2016-06-20

Recommendation report on the cancellation of the award process for two snow removal contracts in the Mercier–Hochelaga-Maisonneuve borough (MHM-102-1621 and HMH-104-1621), filed on June 20, 2016

Summary

An officer at J.L. Michon Transports Inc. contacted a competitor to convince them not to submit a bid on a contract that J.L. Michon Transports Inc. had won in the past and to encourage this competitor to convince other contractors to do the same. The steps taken were attempts to enter into collusive agreements with a competitor. It was recommended that the tendering process be cancelled.

SUMMARY

The Office of Inspector General conducted an investigation to determine whether collusion or attempts at collusion had taken place during call for tenders 16-15049, for the four (4) snow removal sectors in the borough of Mercier-Hochelaga-Maisonneuve covered by the call for tenders.

The investigation reveals that Louis-Victor Michon, the director of operations at J.L. Michon Transports inc., has initiated numerous contacts with a single competitor with the intention of convincing him not to bid on the contract that J.L. Michon Transports inc. had obtained following the previous call for tenders issued in 2011. Through these contacts, Louis-Victor Michon also wanted his competitor to convince other contractors, with whom he has friendship ties, not to bid on the contract performed by J.L. Michon Transports inc. during the 2006-2011 period.

The evidence collected by the Inspector General consists in particular of clear and unequivocal admissions expressed by Louis-Victor Michon and of recordings of two (2) conversations between Louis-Victor Michon and a representative of the competitor that took place on May 27 and June 3, 2016.

In the opinion of the Inspector General, the evidence demonstrates that Louis-Victor Michon attempted, unsuccessfully, to conclude agreements of a collusive nature with a competitor in order to “protect” the snow removal contract that J.L. Michon Transports inc. had obtained in the borough of Mercier-Hochelaga-Maisonneuve following the previous call for tenders (2011) and to increase his chances of obtaining the contract once again under call for tenders 16-15049.

It appears that, after the opening of the bids submitted, J.L. Michon Transports inc. was the lowest bidder for two (2) contracts of the borough of Mercier-Hochelaga-Maisonneuve: MHM-102-1621 and MHM-104-1621. These contracts, which are for five (5) years, were to be awarded to J.L. Michon Transports inc. on June 20, 2016, for the amounts of $6,166,521.85 and $6,183,277.49, respectively.

The Inspector General considers that the facts uncovered during the course of the investigation are serious and would justify the cancellation of the contracting process currently underway in order to prevent a company that uses collusive tactics from obtaining the contracts. However, as a result of the very restrictive wording of section 4.3 of the City’s Contract Management Policy (Politique de gestion contractuelle de la Ville de Montréal), the Inspector General cannot order such a cancellation since, according to section 57.1.10 of Montréal’s City Charter, he must find a failure to respect the call for tenders’ documents or be in the presence of false information provided by the contractor during the contracting process.

The City’s Contract Management Policy, as it is written, only requires the signatory of the tender to make a solemn declaration to the effect that, to his personal knowledge and after verification, the tender submitted was not established with collusion, with communication with another competitor, or after an arrangement, in particular as to the decision whether or not to submit a tender. In the case at hand, Louis-Victor Michon is not the signatory of the bid of J.L. Michon Transports inc.

Since the opening conditions of section 57.1.10 of Montréal’s City Charter do not allow the Inspector General to declare, on his own, that the contracting process underway is null, he recommends, under section 57.1.23 of Montréal’s City Charter, that the City Council cancel the process to be finalized on June 20, 2016, with respect to the two (2) contracts in the borough of Mercier-Hochelaga-Maisonneuve to be awarded to J.L. Michon Transports inc.

Moreover, the Inspector General recommends that the City’s Contract Management Policy be reviewed in order to give full effect to the objectives of the policy designed to fight collusion. Furthermore, had it not been for the restrictive wording of this policy, the Inspector General would have recommended to the City Council that it exclude J.L. Michon Transports inc. from any call for tenders initiated by the City for five (5) years.

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Recommendation report on the cancellation of the award process for two snow removal contracts in the Mercier–Hochelaga-Maisonneuve borough (MHM-102-1621 and HMH-104-1621), filed on June 20, 2016