Urgency cited as main reason for sole source contracting by N.W.T. government

·6 min read
Departments of the government of the Northwest Territories cited urgency as the reason they bypassed competition in some of their contracting in a selection of sole-sourced contracts CBC took a closer look at. (Sara Minogue/CBC - image credit)
Departments of the government of the Northwest Territories cited urgency as the reason they bypassed competition in some of their contracting in a selection of sole-sourced contracts CBC took a closer look at. (Sara Minogue/CBC - image credit)

Every year the Northwest Territories government picks and chooses businesses to give government contracts to rather than putting them out to competition.

Though it is generally recognized that competition is the best way to maximize value for tax dollars spent, there are sometimes good reasons for allowing so-called sole source contracting. One of the most common is that services or goods are needed so urgently there is no time to go through a competitive process, which involves notifying potential bidders, giving them time to put a bid or proposal together, then analyzing each to determine which one is the best value.

CBC took a closer look at 55 sole-sourced contracts from the government's most recent report on contracting, from April 1, 2020 to Dec. 31, 2020.

Urgency was the reason the government cited most often for not putting those contracts out to competition. In emailed responses to questions, the government said it sole-sourced 23 of those contracts because there was no time for competition.

That was the explanation the Finance Department gave for sole-sourcing a $100,000 contract to Charlottetown-based HR Atlantic for negotiating a new collective agreement with the NWT Teachers' Association.

Urgency was also the reason given for sole-sourcing a host of contracts for investigations of workplace complaints. One for $35,000 went to HR Atlantic. Three contracts totalling $87,500 were given to Vancouver law firm Southern Butler Price LLP. Another, for $25,000, went to Thomas ADR of Yellowknife.

The Finance Department would not provide any details about the outcome of those investigations, saying in an email: "It is critical that the GNWT keeps the details of these investigations confidential to protect the safety of employees, and to ensure that employees feel safe to bring forward HR complaints."

Urgency was also the rationale given for sole-sourcing a $1 million contract to Buffalo Airways for air tanker service. In an emailed response, the territorial government said hiring the additional air tankers was part of the government's wildfire approach in light of COVID-19.

"Having additional air tankers allowed ENR to conduct initial attack on more fires in order to reduce the likelihood of having to import firefighters from outside the NWT and potentially evacuate communities if fires become large."

The 2020 wildfire season turned out to be the slowest in three years, with less than half the fires of 2019 and one fifth of the area burned.

COVID-19 contracts

Urgency was also the reason given for numerous sole-sourced contracts related to the COVID-19 pandemic.

There was a sudden need for catering services for a temporary shelter for homeless people in Yellowknife. The shelter was run out of the Salvation Army initially, then at the Aspen Apartments on 51st Street.

In an emailed response, the Department of Health and Social Services said it wanted to spread the business around to local restaurants. It entered into 12-week contracts to provide meals and snacks at the shelter with five businesses: Javaroma, Copperhouse, Gourmet Cup, Yellowknife Hospitality Corporation and YK Inflight Service. All of the contracts ended up being extended. The total cost of catering contracts for the temporary shelter during the period was $473,000.

As a result of the urgency of the pandemic, the department also sole-sourced contracts totalling $1.6 million to six different businesses to provide accommodations for isolating travellers returning to the Northwest Territories.

Most of that money went to two Hay River property owners. The Ptarmigan Inn, owned by the Rowe's Group of Companies, received $545,000. Greenway Holdings Ltd., a company owned by former MLA Jane Groenewegen, received $414,975.

At the end of April, 2020, the Department of Industry, Tourism and Investment (ITI), which maintains a registry of northern businesses, paid the NWT Chamber of Commerce $5,000 to identify makers of personal protective equipment including masks. (The chamber later clarified that money was part a contribution agreement via the department's Support for Entrepreneurs and Economic Development (SEED) program, though the government's list of sole source contracts, which included this figure, made no mention of SEED.)

It is not clear if it is the result of that contribution agreement, but in July, the Department of Education, Culture and Employment entered into a $78,553 sole-source contract with Debbie's Sewing of Fort Smith. ECE says the company produced 7,125 child-sized cotton masks which were distributed to N.W.T. schools. Again, urgency was listed as the reason for sole-sourcing the contract.

Government connections

The Department of Industry Tourism and Investment paid the Denendeh Development Corporation $50,000 to provide an Indigenous member for a panel it assembled to review its procurement practices. Darrell Beaulieu, CEO of Denendeh Investments, a related company, was the member provided. The department said it sole sourced the contract because Denendeh Development was the only party available and capable of performing the work.

There was a different explanation for sole sourcing a contract to another panel member. The department said it gave the $48,875 contract to Peter Vician, a former deputy minister, because the work was urgently required. The government was unable to say how much, if anything, the third member of the panel was paid.

Vician is one of a host of former territorial government workers who got sole-sourced contracts from April 1 to Dec. 31, 2020.

ITI also contracted one of its former assistant deputy ministers, Deborah Archibald, to write up seven job descriptions at a total cost of $12,000.

The Justice Department gave former director of corrections Robert Riches an $18,750 contract that ended up costing double that to develop a new corrections policy to go along with a new Corrections Act. The department said Riches was given the contract because he was uniquely qualified to do the work. It said the contract ended up requiring more time to complete than initially anticipated.

Northways Consulting was paid $49,100 to develop an administration manual for local housing authorities. According to his LinkedIn profile, principal Allan Twissell is a former human resources manager with the territorial government. The N.W.T. Housing Corporation said it gave the contract to Twissell after not getting any response to a request for proposals it issued for the work.

Darlene Delorey, whom the government says is a former employee with its airports program, was given two contracts for $15,000 each for, "specialized technical/engineering related knowledge of northern airports and skills required for regulatory compliance and safety," according to an emailed explanation provided by the infrastructure department.

In March ITI Minister Caroline Wawzonek told MLAs the review of the government's procurement practices would be completed by spring. Wawzonek said that, after that, it would undergo an internal review.

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