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When the city awarded the food-service contract for two golf courses to American-owned Aramark, many city residents — fans of previous provider Salisbury House — responded with outrage. In the intervening time, the Canadian Union of Public Employees Local 500 began a petition calling on city hall to do more work to award such contracts locally.
Mayor Scott Gillingham insists the city is bound by international trade agreements to impartially assess responses to requests for proposals (RFPs). CUPE 500 president Gord Delbridge says that’s a cop-out.
Who’s right? It seems they both are.
It’s true that the city has to accept the best deal. It’s also true that the city can’t attach conditions — “must operate a wholesale food outlet at 1800 King Edward St.,” for instance — that a foreign bidder couldn’t possibly hope to satisfy.
Dave Petrishen, operations manager for Salisbury House, felt ‘thwarted’ by the decision to go with Aramark. (John Woods / Free Press files)
It’s true that the city must be transparent about how proposals will be judged. It can’t say it’s looking for one criterion and then turn around and choose based on another criterion.
What isn’t true is that price alone must be the sole criterion.The city gives itself an out on the document outlining its approach to procurement.
“Bids must meet certain mandatory requirements (as stated in the document) and are evaluated on price and qualifications (i.e. the lowest price bid is awarded the contract, provided the bidder is qualified). Qualification will be determined by criteria such as past performance, adequate facilities and equipment, references etc.,” the document states.
Past performance could have certainly worked in Sals’ favour. Unless it didn’t.
Delbridge correctly points out that contracts must surpass a threshold in value to be subject to trade agreements: for goods and services, that’s $139,000, while for construction projects, it’s $347,000 under the Canada Free Trade Agreement and $650,000 and $9.2 million, respectively, under international deals such as the Canada Europe Trade Agreement.
Municipalities can (and have) broken up deals so that each piece stays below a threshold, so that’s one option.
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The CUPE petition also raises the issue of privatization, specifically farming out garbage collection to what is now a U.S.-owned firm.
My take on privatization is this: it makes sense when you’re seeking highly specialized technical skills for a short-term project.
When it’s an ongoing, labour-intensive service, such as garbage collection, it’s always seemed to me the only attraction for the private company is accessing the spread between what it pays staff and what city wages would be. Somewhere in the middle of those two figures is the contractor’s profit.
In the meantime, you’ve taken those city wages out of the local economy and replaced them at lower levels, all for what may, in the end, be illusory savings to the city.
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