TTC got what it paid for on Spadina subway, says transit chair

Maria Augimeri says the city needs to rethink its policy of always picking the lowest bid, in light of yet another delay in opening the Spadina subway extension.

Thestar.com
Nov. 5, 2014
By Tess Kalinowski


The chair of the TTC board says that it’s time the city, the transit system and other public agencies started opting for the smartest bid rather than the lowest on huge capital contracts such as the $2.5-billion Spadina subway extension.

“If you really are concerned about the public interest and you are truly concerned about tax dollars, you don’t look for the lowest bid, you look for the most intelligent,” said Councillor Maria Augimeri, who still chairs the Toronto Transit Commission.

She made the comment in light of the likely prospect that the opening of the six-stop subway extension will be postponed beyond the already delayed target of fall 2016. Issues with contractors and sub-contractors have been cited among the project setbacks.

“The problem with low bids is they don’t represent the true or fair value of work to be done. We assume the lowest bidder is the smarter one, the most efficient one. It is rarely the case,” Augimeri said Wednesday.

She suggested contracts be awarded based on a points system that would favour companies that present Canadian-content provisions and clean health and safety records. Some jurisdictions drop the highest and lowest bids out of the competition, she said.

Most public contracts are standard jobs, with standard labour costs. “So one has to ask, where is the low bidder cutting corners? Because it is somewhere,” she said.

The TTC is considering two alternatives to delaying the opening of all six stops on the subway.

One would be to open the line without stopping at Pioneer Village station, one of three station projects that is behind schedule. But temporary piles would need to be removed from the track area there to allow trains to pass through.

The other would be to run the trains only as far as York University, leaving the northern stops to open later.

Augimeri suggested the decision should be up to the new TTC board that will be appointed once mayor-elect John Tory officially takes office next month.

A panel of international experts is expected to look at the Spadina issues this month and advise the TTC on how it might expedite the remaining work.

Ontario Minister of Transportation Steven Del Duca said he was disappointed to learn of another potential delay. He would not speculate on scenarios where the subway wouldn’t run all the way to his Vaughan riding.

“The province has made an $870-million contribution to a significant project that is, by design, supposed to run to the future Vaughan Metropolitan Centre Station. I will insist that the TTC complete the project as it was originally committed to,” he said.

The companies that win the big contracts tend to act as project managers, brokering out work to sub-contractors, which gives them limited control, said Augimeri.

A worksite fatality at the York University station in 2011 caused months of delay. The 24-year-old worker who died was employed by the sub-contractor of one of the tunneling companies.

OHL-FCC GP Canada Inc. (1842887 Ontario Ltd.), a Spanish construction consortium, and its sub-contractor, Advanced Construction Techniques, will go to court in January on Ministry of Labour charges in connection with the fatality.

OHL won its tunneling contract with a bid of $404.4 million - about $5.5 million, or 1 per cent less, than the next closest bidder, Ellis Don, said Augimeri, who alleges the Spanish contractor was less familiar with Ontario health and safety rules.

Contractor-related delays aren’t unique to the TTC.

Officials at Metrolinx and the City of Mississauga have quietly complained about getting what they paid for by accepting the lowest bids on projects that have come in late, including a parking facility at the GO Clarkson station, a makeover at the Burlington GO station and the Mississauga busway.

The Ontario Liberal government’s commitment to privatizing transit projects has resulted in many big contracts going to off-shore companies, said John Cartwright, of the Toronto and York Region Labour Council.

As the scope of private-sector involvement has grown from the design and construction of projects to financing and even maintaining them, it has become increasingly difficult for domestic companies to qualify financially.

The TTC’s complex procurement process already requires companies to pre-qualify for contracts.

“The bidders have got a whole series of benchmarks that are looked at. It includes time, money, previous experience in this or similar kinds of work. They’ve added one around apprenticeship, around engagement and community benefits, health and safety violations,” said Cartwright.

“You have to show experience in civil construction. You can’t have just built apartments and come along and bid on a subway,” he said.

Still, once companies are qualified to bid, “It almost always comes down to dollars,” said TTC spokesman Brad Ross. “It’s not the only factor, but it is the biggest for sure.”