Citing affordability, city defends $1.6B SNC-Lavalin LRT contract in new report

Gladstone
Gladstone Station on the forthcoming stage two development of the north-south Trillium Line.
Editor's Note

This story was updated with a group of councillors' calls for the Ontario ombudsman to probe the procurement of Ottawa's LRT line.

City staff say awarding a $1.6-billion contract to SNC-Lavalin for an extension of Ottawa’s north-south rail line was the only affordable option, even though the construction and engineering firm failed to meet the project’s technical requirements.

City manager Steve Kanellakos released documents Monday evening detailing the procurement process that resulted in TransitNEXT – a subsidiary of SNC-Lavalin – winning the contract to extend the Trillium line in the second phase of light-rail in Ottawa roughly a year ago.

Council had directed Kanellakos to do so before next week’s meeting of the Finance and Economic Development Committee. In January, documents revealed that the technical evaluation committee working on stage 2 bids sought to disqualify TransitNEXT from the process because it submitted an unsound application. The contractor only continued on in the process because direction from higher steering committees, which included senior municipal staff, consultants and lawyers hired by the city, advised evaluators to keep it in the race.

The documents Kanellakos released Monday stated that TransitNEXT’s bid was the only submission that met the city’s affordability threshold for the Trillium Line extension. The other two consortiums in contention submitted bids that exceeded SNC-Lavalin's submission by more than $100 million.

Law firm Norton Rose Fulbright, which provided the legal advice that kept TransitNEXT in the running, was evaluated and cleared for potential conflicts of interest related to the stage 2 procurement process, Kanellakos noted.

The city’s experts on the stage 2 file, including representatives from Norton Rose Fulbright, will be present at FEDCO next week to answer council’s questions.

Existing line ‘expensive and unreliable’

At the same time, a group of councillors are looking for a deeper probe into the city’s light-rail contracts.

On Tuesday, seven council members held a news conference announcing their intention to bring the issues with the rollout of phase one LRT and the procurement of the second stage contracts to Ontario’s ombudsman.

In a draft letter, councillors wrote that the regular breakdowns and disruptions on the Confederation Line since it first launched in September have left Ottawans with an “expensive and unreliable” transit system. They noted their frustration with the city’s contractual obligations to protect Rideau Transit Group’s proprietary information, a roadblock to learning more about the system’s management and technical specifics.

A motion will be brought forward to full city council before the letter can be sent as an official request to the Ontario ombudsman.

The councillors also said they intend to seek legal advice on how the city might break its long-term maintenance contract with the original LRT builder and look to bring the upkeep work in-house. They’re also looking at options to secure a refund for the Alstom-made trains under a warranty clause in the procurement contract.