THURSDAY, NOVEMBER 16, 2017 7
A SUPPLEMENT TO THE WINNIPEG FREE PRESS
Celebrating 75 GROUNDBREAKING years in 2018
OBSTRUCTIONIST POLICIES A QUICK PATH TO ECONOMIC RUIN WE STRIVE TO TRADE GLOBALLY, YET SOME GOVERNMENTS THWART COMPETITION IN CANADA
THE PALLISTER GOVERNMENT ITSELF EFFECTIVELY DECLARED MANITOBA HAS ZERO TOLERANCE FOR LOCAL PREFERENCE CLAUSES IN PUBLIC TENDERS, ISSUING NOTICE TO DEPARTMENTS, AGENCIES, CROWN CORPORATIONS AND PUBLIC SCHOOL BOARDS, AMONG OTHERS, THAT NO SUCH PRACTICE WILL BE PERMITTED.
G rowing the economy is more than a buzzword. Canada’s GDP is inching up, but for real employment gains, it needs a shot in the arm. So why would public offices employ obstructive policies that deliberately thwart business from expanding their markets, creating jobs and returning to government the tax revenue that underpins Canada’s globally envied social programs? Sounds counterproductive, right? We think so, too. Yet, time and again business and trade organizations get thrown under the bus when they attempt to compete fairly for work that is tendered by government or public offices. Yes, that’s right — public procurement policies that defeat competitive bidding, whether by design or effect. The first kind of obstructionist policy is that which some jurisdictions use to give favourable treatment to local companies, even after signing trade agreements that are supposed to pave a level playing field, ensuring best value for the public dollar. This fall, for example, Manitoba contractors were prevented from bidding on tenders in a neighbouring jurisdiction that uses local preference policies. Local preference clauses do not explicitly say “out-of-towners need not apply.” Typically, they are disguised in language such as “experience working with local authorities and community organizations” or “knowledge of and experience with local conditions.” This practice is particularly offensive since Manitoba’s public procurement rules open the door to all comers in other provinces, making for some tough bid-competition in the heavy construction industry. Ron Duncan, president of Winnipeg heavy civil contractor Tri- Core Projects, says tenders should permit open, fair bidding and, after assessment for bids that qualify for the work involved, the contract “That gives you an idea of what is at stake for Manitoba contractors, and their workers, when the cards are stacked against them,” says Duncan. “But also, it ramps up cost to the taxpayers in that jurisdiction, because the public owner has already written off getting ‘best value’ from the tender in limiting the competition.” The Manitoba Heavy Construction Association (MHCA) has opposed such local preference policies repeatedly. And now, the ought to be awarded to the lowest qualifying bid. The contracts can be worth millions of dollars.
Pallister government itself effectively declared Manitoba has zero tolerance for local preference clauses in public tenders, issuing notice to departments, agencies, Crown corporations and public school boards, among others, that no such practice will be permitted. Further, the government also has said that public tender and contract documents will not contain what is known in the industry as arbitrary or punitive ‘reprisal clauses.’ A reprisal clause tells bidders for public contracts that they need not apply if they are now, or recently have been, in legal dispute with that public entity arising from a previous contract. Recently, a Manitoba school division included such a clause in its tender documents. Basically, the impact of such as clause is: If you exercised your legal right to civil action because of a dispute over the terms or conditions of the contract, the reprisal clause bars you from submitting a bid to compete for work. But that tramples recourse to basic contract law, which provides for legal recourse to resolve disputes. Either party is allowed that right, which is constitutionally protected. Imagine the chill that would send down private enterprise — public bodies are the owners of some of the highest value projects and work tendered in any given year. Jack Meseyton, co-owner of Portage la Prairie contractor E.F. Moon, doesn’t have to imagine the chill — he’s felt it first-hand. He stopped dead when he read the division’s reprisal clause in the tender document. While he hasn’t been involved
chilling practice that effectively denies a company of its right to contractual redress.” Reprisal clauses also work against the public interest because they limit competition. Both forms of obstructive trade practices are bad for business, bad for the public’s dollar and destructive to economic growth. The MHCA supports and agrees with the Canadian Construction Association in its efforts across the country to fight pernicious
tender practices, whether they be giving the leg up to local companies in tenders, or eliminating competition through reprisal clauses. Canadian businesses have shown the world they can compete globally with the best, time and again. We should
not have to fight restrictive trade practices that limit the value of vigorous competition from our own governments and public bodies. That kind of internal warfare paves a path to economic ruin. ❱❱❱
Tri-Core Projects president Ron Duncan says tenders should permit open and fair bidding. Photo by DARCY FINLEY
in past legal disputes with the school division, the threat of reprisal would colour his options should a dispute arise. “The effect of the reprisal clause on my company is to make us reluctant to enforce legal rights because of the threat of being blacklisted from future work,” Meseyton
explains. “The public entity can exert undue pressure on my company to abandon our legal claims, or settle for considerably less. “So you can see how the use of reprisal clauses is an unfair,
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