Montreal corruption watchdog finds irregularities in contracts, thwarts attempted collusion

Montreal's inspector general has released two damning reports, one concerning attempted collusion in the snow-removal industry and another about an irregular tender process involving water treatment pumps.

A $25-million contract to replace water treatment pumps at the Atwater treatment plant was cancelled after Denis Gallant found the tender process was riddled with irregularities.

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In a 65-page report released Monday, Gallant traces how water technology company Xylem was able to win the contract in 2015 despite not meeting the conditions of admissibility.

The tendering process was run by Montreal's potable water department with the help of engineering company SNC-Lavalin, which supervised the technical side of the contract.

Five companies initially submitted bids for the contract but under SNC-Lavalin's advice, all of them were deemed inadmissible.

"There is no document attesting to the results of this first analysis of the conformity of the submission," Gallant's report said.

A second analysis of the bids was conducted by SNC-Lavalin, which decided that only Xylem conformed to the technical demands of the contract.

As Gallant points out, this was despite the fact that Xylem couldn't supply the cooling system set out in the tender guidelines.

Moreover, Xylem did not provide a letter from a prior client about the reliability of the company's water pumps, as it was required to do.

When Gallant asked the company about the letter, he said they tried to "induce the inspector into error" by making it appear as though they had submitted it.

"The process that took place contravenes the fundamental principles and the rules framing the adjudication process of contract," Gallant said in cancelling the contract.

Attempted collusion

The city's inspector general also recommended the immediate cancellation of two snow removal contracts in the borough of Mercier–Hochelaga-Maisonneuve.

In a separate report tabled Monday, Gallant found that one company tried to convince a competitor not to bid on snow removal contracts.

Louis-Victor Michon, the director of operations for J.L. Michon Transports, contacted the same competitor several times in hopes of convincing the competitor not to bid on the same contract that his company won in 2011.

Gallant also noted that Michon wanted the same competitor to convince other entrepreneurs not to bid on the same contract undertaken by J.L. Michon Transports during 2006 to 2011.

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The 20-page report reveals that the evidence was obtained through "clear admissions" from Michon and from audio recording of two conversations between Michon and a representative from the competitor on May 27 and June 3.

"The evidence as a whole shows that Louis-Victor Michon tried, without success, to strike a deal of a collusive nature with a competitor to 'protect' a snow removal contract that J.L. Michon Transports obtained in the borough of Mercier-Hochelaga-Maisonneuve during a previous call for tenders," wrote Gallant.

The two contracts, which were expected to be awarded to J.L. Michon Transports, were worth $12.3 million.