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Construction sector takes hit in AG report

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by Don Wall

Auditor General Bonnie Lysyk’s 2016 annual report is intended to highlight wasteful government practices but Ontario’s construction sector suffered collateral damage as she took aim at Metrolinx, roadbuilders, asphalt suppliers and engineers.
Construction sector takes hit in AG report

Among the 13 audits covered in the first volume of the Nov. 30 report, Lysyk reported poor project oversight by Metrolinx, and especially identified contracts with CN and CP as poorly executed.

"Because of deficiencies noted in its oversight processes around construction contracts, and because of deficiencies we confirmed in a sample of contracts, there is a risk that it is spending more than what is required, and there remains a significant risk that this will continue to happen," said the report.

Metrolinx repeatedly awards contracts to low bidders with little regard to performance, said Lysyk: "Metrolinx rarely holds design consultants and construction contractors accountable when they deliver work that is of poor quality and/or late — and it continues to award them more work... one contractor was awarded 22 more projects after performing poorly for Metrolinx."

Metrolinx issued a statement the afternoon of the 30th from its president Bruce McCuaig that said, in part, "The auditor's report focuses on a small sample out of the many hundreds of projects Metrolinx is currently working on or has completed between 2011 and 2016. While there are clearly challenges with this sample of projects that have required significant management intervention with the vendors, all vendors must realize that poor performance is not acceptable and will lead to being disqualified when considered for future Metrolinx projects."

The statement said that of 275 completed construction projects over the last five years, the average cost overrun was 3.8 per cent.

Lysyk also said the Ministry of Transportation (MTO) had allowed the Ontario Road Builders' Association to take advantage of its close collaboration with the ministry to excessively influence internal ministry policy to its advantage.

As a result, policy changes allowed contractors to delay paying fines — some of which are now uncollectible — and failed to discourage serial lawsuits against the ministry, the report noted.

The MTO has also paid bonuses to contractors after it became aware that the contractors may have tampered with asphalt samples.

ORBA issued a statement Dec. 1 that indicated, "ORBA is disappointed by what we consider a clear mischaracterization of the relationship between ORBA, the Ministry of Transportation, and discussions on the issues concerning our industry. We have been and remain committed to participating in what we consider to be transparent, good faith discussions with public sector agencies to the benefit of all Ontarians."

The Ontario Hot Mix Producers Association (OHMPA), producers of the asphalt used in surfacing many of Ontario's roadways, came under the gun in the report for providing substandard asphalt that has been shown to crack years before it is supposed to, with taxpayers picking up tabs amounting to millions of dollars for premature fixes. "The asphalt industry, specifically the asphalt cement suppliers, were adding cheaper materials, notably excessive amounts of recycled engine oil, into the cement they supplied for use on ministry projects," Lysyk wrote.

Lysyk said roadways with an expected life expectancy of 15 years had to be repaired at taxpayers' expense within five years in some instances — and in one case, in one year.

The OHMPA was also singled out for balking at MTO requests to fully implement an Extended Aging test.

The OHMPA issued a statement expressing its dismay at its portrayal in the report. It said it is "surprised and extremely displeased to hear that industry is being characterized in this way. In addition, OHMPA disagrees with the conclusions made by the auditor general and we strongly object to the inconsistent assertions made in the report."

The statement said OHMPA will review the report in greater detail before commenting further.

Professional Engineers Ontario (PEO) was also singled out in relation to the certification of project completion, with Lysyk recommending that the MTO consider hiring its own engineers to perform Quality Verification Engineer (QVE) duties.

In one high-profile case, a private-sector QVE had signed off on the Nipigon bridge in north western Ontario, but after the bridge failed last January, several materials issues were identified.

In another bridge case, a QVE certified project completion but when the bridge later collapsed, it was determined that the metal components could only hold about 90 per cent of the required load.

PEO registrar Gerard McDonald commented, "We are a regulatory body so we don't get involved in commenting on government policy. And with respect to specific complaints or investigations, if they are underway, we are prevented by the act from commenting on them.

"If, per se, the Ontario government wanted to develop a practice standard for QVEs, we'd be more than happy to work with them on something like that."

He said it would be more appropriate for other engineering bodies involved more in advocacy to comment on policy. The PEO continues to investigate the Nipigon bridge and other project failures, said McDonald.

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