Changes to bidding process would be welcomed

By Letter to the Editor on February 24, 2020.

I was pleased to read in the News recently that the City of Medicine Hat is reviewing its procurement process and will provide more clarity.

The process the city used prior to the Second Street debacle which ultimately led to the out of town contractor being held in breach of contract, worked well. Contractors submitted a bid complete with a consent of surety and bid bond, ensuring their price would be honoured and the tenders were opened in public. Generally the low bidder received the work and projects went ahead.

Second Street changed all that. The city staff and council endured considerable heat in the media and via word of mouth. The city reacted by deciding to prequalify contractors for certain projects or include a contractor evaluation portion in the tender itself that was used as part of the decision (along with price) as too which contractor would be given a contract. This was done with no guidelines as to which projects would require prequalification/evaluation component and instead was done on an ad hoc basis. Sometimes, as in the case of the Veiner Centre, the motivation to prequalify would appear to be political, as staff and council were under pressure from seniors to get the centre rebuilt.

The Veiner Centre project was vastly less technical than the last two lift stations constructed in the city, that had no prequalification process and ended up being completed years after the intended completion dates. Local contractors were more than capable of completing this project. Additionally the weight of the evaluation in deciding the winning bid was also varied from as low as 10% to as high as 40%, again with no guidelines. These evaluations occasionally took months to be undertaken and in the interim bidders were left in the dark as to whether they would be awarded the contract. The tenders were now also being opened in private, so the prices were unknown to both the bidders and public. Meanwhile, additional tenders were being put out for bidding, with contractors not knowing their work load. This would affect both price and the ability to get projects completed, as a contractor could suddenly find themselves overloaded with work.

The randomness of the process and lack of transparency has created havoc for both city staff, consultants and contractors and confusion and uncertainty became the norm. As a taxpayer, I can understand and applaud staff and council in wanting to assure project delivery and the best pricing. Both the Chamber of Commerce and the Medicine Hat Construction Association have gone to significant lengths to provide input in how to improve the procurement process.

The model put forth is one of prequalifying contractors to ensure that they can deliver projects as per the tender documents and general conditions of contracts. Once prequalified, bidders are then free to bid on city tenders, which would then be opened publicly after the tender closed and the low bidder would generally receive the work. Using this model the city receives the best price and gets a contractor that they can have confidence in with respect to project delivery. The contractors know where they stand with respect to workload in bidding future projects as well. Let’s hope that this review will lead to positive and practical changes to the current process.

Jim Taylor

Medicine Hat