OPP investigates possible bid-rigging on Toronto city contracts

Ontario Provincial Police are investigating possible bid-rigging by private firms for City of Toronto paving contracts, a racket that could be costing taxpayers millions each year. 

Suspicions of bid-rigging were the focus of a recent audit that probed city contracts awarded to private contractors from January 2010 to June 2015. Results of that audit were presented in a March report that highlighted "telltale signs of bid-rigging and inflated pricing" and scolded city staff for antiquated record keeping. 

City staff said at the time that Toronto police had been briefed on the findings of the audit.

On Friday morning, OPP Sgt. Peter Leon confirmed that the OPP has launched an investigation of its own, to be led by its Criminal Investigations Branch (CIB). He did not provide any further details on the probe.

Al Rosen, a veteran forensic accountant, said the OPP will first need to examine the quality of evidence available, though he noted that the involvement of the CIB could mean at least some evidence of a crime is evident.

He said news of an OPP investigation was not necessarily surprising.

"This type of thing has been going on forever," Rosen quipped. 

'Systematic and insidious problem'

Coun. Josh Matlow, who represents Ward 22, St. Paul's, is concerned that bid-rigging in paving "is the tip of a slippery slope.

"I'm concerned that it's not just one company or another. We have a systemic and insidious problem that we have with respect to complementary bidding happening with paving contracts, and there are suspicions it might be happening elsewhere," he told CBC Toronto. 

Matlow tabled a motion Friday that would see council explore ways the city could blacklist companies that have acted unethically or illegally. It was passed unanimously. 

Matlow added that city staff, "whether it be through sloppiness and incompetence, or something else, have allowed this to go on for so many years," and any collusion must also be part of the probe. 

The report by Auditor General Beverly Romeo-Beehler does not identify companies by name. but she estimates the city could save about $2.5 million per year on paving contracts alone, if the bidding process were made more equitable and transparent. 

Considering the city spends an estimated $1 billion annually on construction contracts, it's possible bid-rigging and similar forms of shady — and potentially criminal — dealings could be costing taxpayers tens of millions each year, the report said.

Toronto Mayor John Tory said in March that he was "extremely troubled" by the auditor general's findings, and that the city is "transforming and modernizing the bid process to ensure a fair and competitive process that gives us the best price and best value for money."

That process started back in June 2016, when the auditor general released a less comprehensive report on bid-rigging, according to Barbara Gray, the city's general manager of transportation. 

Gray said her department began reviewing the bidding process last summer and is focusing on being "more systematic and consistent in filing data" that will help keep digital tabs on bids. A database that integrates data from across the city was a primary recommendation of the March report.