Hydro taking heat over single-source contract

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This article was published 01/03/2016 (2578 days ago), so information in it may no longer be current.

Elected officials are demanding answers after the revelation Manitoba Hydro awarded a single-sourced contract worth up to $85 million to an engineering consulting firm.

Reacting to a media report, Premier Greg Selinger and Eric Robinson, the minister responsible for Manitoba Hydro, said the public deserves to know why the contract was awarded to California-based Tetra Tech in 2014 and why the contract did not go to the competitive bidding process.

The Crown corporation signed the contract with Tetra Tech to provide construction management services during the construction of the Keeyask generating station project. 

“We have to know the specifics of it from Manitoba Hydro, why they did it and for what reason. Hydro is there to deliver an effective service to people. I haven’t seen all of the details of it, obviously, at this stage of the game,” Selinger said Tuesday.

“We have to take a look at the specifics, and Hydro has to be accountable for what they do.”

By late afternoon Tuesday, Manitoba Hydro offered a brief timeline into how the contract came to be awarded.

On top of the $6.5-billion Keeyask dam project and $4.6-billion Bipole III transmission project, Manitoba Hydro has a number of capital projects around the province that forced it to “augment” their management team with outside help, said Manitoba Hydro spokesman Bruce Owen.

Owen said in 2012, an expression of interest was sent out seeking construction management expertise, and six companies responded. One company was not considered because it was not a construction management firm. Three companies were already involved with project design with Manitoba Hydro — which could be perceived as a conflict of interest — and of the two remaining companies, “Tetra Tech had the most expertise,” Owen said.

“A decision was made. We know them, they know us, that we will issue this contract for their services because we will know they’ll be available and hit the ground running with us,” Owen said. “Knowing what we knew almost four years ago, this was the best way where the shovel hit the ground. The best people were in place, so we’d be getting the best bang for our buck.”

Owen said there are several instances in which the corporation will use a single source, including emergency situations: when no alternative is offered or in the case of sole-sourced contracts, when there is only one supplier of a particular service or product.

Owen said between 2011 and 2015, more than 2,100 single-sourced contracts were awarded with a value of $463 million, which is five per cent of Manitoba Hydro’s total procurement.

The single-sourced contract was the topic du jour at Tuesday’s question period, where Progressive Conservative Leader Brian Pallister hammered Selinger about the contract by the Crown corporation, linking it to the Tiger Dams scandal in which $5 million worth of flood-fighting equipment was allegedly promised to First Nations without going to tender. Pallister said the government needs to set a “proper tone at the top” of shopping smarter, to set an example for Crown corporations.

Selinger said 95 per cent of Manitoba Hydro contracts go to tender, and accused Pallister of wanting to “slice and dice” the Crown corporation, in similar vein to the Tories’ privatization of MTS in 1996.

The Progressive Conservatives have promised to reduce the amount of untendered contracts by “shopping more intelligently” as part of their open government agenda.

“When I see $85 million and I hear a Hydro spokesperson say, ‘Well, we tender most of our stuff. It’s only $85 million,’ I cringe,” Pallister said.

kristin.annable@freepress.mb.ca

Twitter: @kristinannable

— with files from Larry Kusch