Hey there, time traveller! This article was published 16/7/2015 (2505 days ago), so information in it may no longer be current.
Did embattled cabinet minister Steve Ashton cross the line when he tried to get a $5-million untendered contract for a company represented in Manitoba by a close personal and political friend?
Ashton certainly doesn’t think so. And he has gone to some lengths to deny that he did anything wrong.
However, a more detailed Free Press investigation of flood-fighting equipment procurement over a 10-year period shows that at the very least, there is abundant circumstantial evidence of wrongdoing.
The spring session of the Manitoba legislature was highlighted by the revelation that Ashton had tried to secure at $5-million contract to purchase Tiger Dam mobile flood tubes. A whistleblower flagged the contract to the Manitoba ombudsman, who undertook a brief investigation last year.
The issue here is the awkwardly close relationship Ashton has with businessman Peter Ginakes — Manitoba representative for US/International Flood Control Corp. and its Tiger Dam products — who has been a personal and political friend over the years. Free Press stories revealed that Ashton has used his position as a provincial cabinet minister to promote Tiger Dam, going as far to as to appear at company functions to endorse the company.
Ashton has denied he tried to help Ginakes, and justified his actions by claiming the need for this equipment in chronically flooded Interlake First Nations was urgent. He has further said it is not unusual for the province to bypass the formal tendering process for the procurement of this kind of equipment, because it is often needed on short notice.
It is this third point — the lack of formal tendering — that will no doubt form the backbone of his defence to Ombudsman Charlene Paquin, who has resumed her investigation at the request of Ashton and Premier Greg Selinger, both of whom have denied any wrongdoing.
Ashton clearly knows the province has a long and somewhat troubling history of laying out millions upon millions of dollars for expensive flood-fighting equipment without formal tenders.
Of 14 contracts, only one went to tender
The Free Press investigation of flood-fighting equipment procurement since 2005 shows an almost chronic reliance on untendered or informally tendered contracts for the purchase of mobile flood tubes. These tubes can be transported anywhere, filled with water, and used to hold back overland floodwaters.
Over that period, the province issued 14 contracts to two different suppliers for $12.8 million in mobile flood tubing and the vehicles to transport the materials. Remarkably, all but one of the contracts was untendered or informally tendered.
Of the two suppliers — UIFCC/Tiger Dams and Aqua Dams — the gross majority of contracts went to Tiger Dam. Procurement data shows that Tiger Dam provided $8.3 million worth of tubes and other equipment. Not a single Tiger Dam contract was ever put to formal tender.
Aqua Dam, which also benefitted from untendered contracts, has the distinction of having won the only tendered contract for mobile flood-fighting equipment, a $2.5-million procurement issued in February 2011.
Officials from Manitoba Infrastructure and Transportation, which oversees the Emergency Measures Organization and the provinces flood-fighting efforts, said it is often necessary to bypass normal tendering because the mobile flood tubes are needed on an emergent basis. Government rules allow for untendered contracts whenever there is an existing threat to property or personal safety.
It is absolutely true that all of the purchases of Tiger Dam and Aqua Dam products were done in the late winter or early spring when the province is typically entering the throes of the flood-fighting season.
It is also true that flood forecasting is not an exact science. If we’ve learned anything about living in a flood zone, it is that flood threats can arise or evaporate without any notice.
However, despite all these caveats surrounding the purchase of tubes, the province does a much better job of procuring other flood-fighting equipment through normal tendering processes.
During the same 10-year period, the province issued 12 contracts to purchase more than $5.4 million worth of various kinds of sandbags and seven were tendered. And of the untendered contracts, three came late in the 2011 flood season that was the most expensive flood in Manitoba’s history.
It seems quite clear the province has been much better at anticipating sandbag requirements, and purchasing with enough advance planning to avoid last-minute scrambles using untendered contracts.
Why is the planning so poor on the more expensive flood tubes? Again, departmental officials will say that there are far fewer suppliers of the tubes, and that having bought from one supplier in the past it makes sense to augment supply of that product rather than switch suppliers and technology. That limits the need for a full, open tender in every instance.
There is also the very real concern that since 2009, the province has been under tremendous pressure to respond to a series of significant flood events. Pressure that, departmental officials said, has kept them from getting ahead of the procurement cycle to avoid untendered contracts.
However, even with all that taken into consideration, this is still a function of government that is so poorly planned, it is ripe for abuse. Which brings us back to Ashton and government procurement practices in general.
In many cases, no justification
Last year, former auditor general Carol Bellringer exposed a serious problem in the NDP government with untendered contracts. She studied 50 untendered government contracts and found that in slightly more than half the cases, the absence of tendering was not justified under current guidelines.
That certainly seems to be the case with Ashton’s $5-million Tiger Dam deal. There is little in the background of this particular untendered contract that would suggest the province was under emergent pressure to acquire the tubes for the Interlake Tribal Council.
The plan to acquire the equipment was first revealed in a news conference in late spring of 2014. Following that public pronouncement, sources said Ashton lobbied hard behind the scenes throughout the summer and into the fall of that year to proceed with the purchase on an untendered basis.
His proposal for an untendered contract was ultimately turned down at Treasury Board in early October and then later stalled when it reached cabinet.
This chronology shows there was every opportunity to hold a formal tender, and avoid exposing the inherent conflicts of interest that existed between Ashton, Ginakes and the Interlake First Nations. Further complicating matters was the fact that Ginakes was a board member of an investment agency operated by Peguis First Nation, which was spearheading the flood tube purchase.
It seems more and more evident that now Ashton, knowing full well that flood tubing is almost as a rule purchased without a formal tender, believed he could get a $5-million untendered contract without raising too much concern among his cabinet colleagues. That turned out to be a massive miscalculation, as several key cabinet ministers tried to stop the contract, and a whistleblower reported it to the ombudsman.
Why Ashton did not recognize the peril he faced in this transaction is anybody’s guess.
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The Opposition Progressive Conservatives have already tried to link political donations from Ginakes and other Tiger Dam-related suppliers to multimillion-dollar procurements of Tiger Dam products. The timing and nature of the Tiger Dam contracts does nothing to defend Ashton from those allegations.
That is a threat that Ashton could have, should have anticipated. Showing an unwillingness or an inability to do that, he now faces a no-win scenario with the ombudsman’s investigation.
Paquin could determine that Ashton was in fact trying to do a favour for several political friends. That would be devastating to him, and to his government.
Or, Paquin could find that Ashton was simply carrying on the government’s sloppy, lazy tradition of avoiding the tendering process.
Bottom line? The coming verdict may very well reveal Ashton as a corrupt politician, or an incompetent one. There is little room for a finding in between.