THE BLOG

The Flip Side of B.C.'s Infrastructure Coin

09/24/2015 03:34 EDT | Updated 09/24/2016 05:12 EDT

There are those who execute contracts and those who award them. In B.C., when it comes to provincially funded infrastructure projects, valued at more than $50 million, there's a gatekeeper: Partnerships BC.

Tough to keep track of all the comings and goings at the Crown corporation.

In 2007, there were 26 senior employees at Partnerships BC (PBC). Only seven of the 26 are still there. The others haven't gone far.

Two went off to Plenary Group. Plenary has won three bids at PBC.

One moved on to Deloitte Canada's infrastructure advisory division, another to transportation planning firm Steer Davies Gleave, and former CEO Sarah Clark to Fraser River Pile and Dredge.

Founding CEO and later chair, Larry Blain, is at KPMG where he's the senior director of its global infrastructure unit.

Blain had a colourful tenure at PBC, from pricey wine to his sideline: Aardvark Insights.

On top of the $179,000 in board fees Blain pocketed over four years, Aardvark billed PBC an additional $223,466, some through sole-sourced contracts.

PBC and Aardvark also came as a team.

In 2012, SaskBuilds, a Saskatchewan Crown corporation, hired both: PBC to prepare procurement options and strategies and Aardvark to assess them.

The teachable moment such practices should have represented didn't stick.

This summer, B.C. journalist Bob Mackin reported that PBC awarded a $380,000 sole-sourced contract to its former assistant vice-president Rick Steele, who left the corporation in January.

The contract, for "strategic advisory services" on a Kwantlen Polytechnic University project, has since been torn up and will be put to public tender as government rules dictate.

On its website, PBC has 42 case studies of projects completed or under construction. Ninety-two unique companies are identified as members of the successful proponent teams in those studies.

Forty-one of the 92, have donated a total of $1.32 million to the BC Liberal party, eight have donated $19,650 to the NDP.

Liberal party donors were more likely to be in the winner's circle at PBC.

Thirty-one per cent of the companies that won just one bid donated to the Liberals. Of the companies that won two bids, 37.5 per cent donated. And of those that won three or more, 80 per cent donated to the party.

In one remarkable coincidence -- a little more than a month before PBC announced its preferred proponent for the $302 million Fort St. John Regional Hospital project -- the B.C. Liberal party reported receiving three cheques on the same day of $5,000 each, two from Stuart Olson Constructors and one from Acciona Infrastructures Canada.

They were named the preferred proponent a month later.

Last year, B.C.'s auditor general highlighted that taxpayers are still on the hook for a $31-million private equity loan on the hospital. Interest rate? 14.79 per cent.

It's not all sweetness and light in the industry either when it comes to PBC.

In 2013, the B.C. Construction Association published a review of industry concerns, providing its recommendations on how "to improve the planning, implementation, and operation of assets in BC's public sector."

They included using various procurement approaches, rather than one or two and ensuring that bodies such as PBC don't compete with the private sector, noting: "the government's funding model for PBC creates a conflict of interest."

Concerns that were acknowledged when PBC found itself under the microscope of Bill Bennett's core review last year.

With a passing nod, the review team noted: "PBC is mandated to be both an advisor and service provider to government, and to be a self-sustaining organization. These multiple roles have created the perception that PBC's advice to government could be biased towards solutions that create opportunities for PBC to earn revenue."

PBC relies on consulting fees with ministries, local governments and out-of-province clients to pay its bills.

The review also found that "more than half of the consultant and contractor files reviewed didn't contain adequate documentation such as the justification for hiring the successful contractor, the reasons for direct awarding contracts to individuals or the rates paid."

PBC may have missed the auditor general's note in 2013 that PBC was unable to produce documents "showing how they calculated the expected costs for tunnelling delay and scope changes" on the Evergreen line. "It again points to record-keeping weaknesses that the ministry and PBC need to address."