Item - 2014.AU14.4

Tracking Status

  • City Council adopted this item on April 1, 2014 with amendments.
  • This item was considered by the Audit Committee on February 28, 2014 and adopted without amendment. It will be considered by City Council on April 1, 2014.

AU14.4 - The Charbonneau Commission - An Opportunity for the City to Re-evaluate its Procurement Practices

Decision Type:
ACTION
Status:
Amended
Wards:
All

City Council Decision

City Council on April 1, 2 and 3, 2014, adopted the following:

 

1.          City Council request the Director, Purchasing and Materials Management to review the upcoming report of the Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry, otherwise known as the Charbonneau Commission; such review to determine whether recommendations pertaining to establishing measures to identify, reduce and prevent collusion and corruption in the awarding and managing of public contracts in the construction industry have relevance to the City of Toronto.

 

2.         City Council request the Director, Purchasing and Materials Management to meet with the Federal Competition Bureau to determine the Bureau’s Investigation process particularly as it relates to:

 

              a.       the criteria for referring specific cases to the Bureau;

 

              b.       the level of evidence required by the Bureau; and

 

              c.       the results of individual investigations.

 

3.          City Council request the City Manager, in consultation with the City’s Agencies and Corporations, to develop a protocol for the distribution and sharing of fraud investigation related reports; such process to ensure that, as a minimum, recommendations contained in all such fraud investigation reports be shared with Senior Management at the City as well as its Agencies and Corporations.

 

4.         City Council request the Director, Purchasing and Materials Management to report to the Government Management Committee on the findings and any policies and protocols arising from the implementation of Parts 1 to 3 above.

Background Information (Committee)

(February 6, 2014) Report from the Auditor General - The Charbonneau Commission - An Opportunity for the City to Re-evaluate its Procurement Practices
https://www.toronto.ca/legdocs/mmis/2014/au/bgrd/backgroundfile-66968.pdf

Motions (City Council)

1 - Motion to Amend Item (Additional) moved by Councillor Janet Davis (Carried)

That City Council request the Director, Purchasing and Materials Management to report to the Government Management Committee on the findings and any policies and protocols arising from the implementation of Audit Committee Recommendations 1 to 3.

Vote (Amend Item (Additional)) Apr-03-2014 8:15 PM

Result: Carried Majority Required - AU14.4 - Davis - motion 1
Total members that voted Yes: 26 Members that voted Yes are Paul Ainslie, Maria Augimeri, Michelle Berardinetti, Shelley Carroll, Raymond Cho, Vincent Crisanti, Janet Davis, Glenn De Baeremaeker, Frank Di Giorgio, Sarah Doucette, John Filion, Mary Fragedakis, Mike Layton, Gloria Lindsay Luby, Josh Matlow, Pam McConnell, Denzil Minnan-Wong, Cesar Palacio, John Parker (Chair), James Pasternak, Gord Perks, Anthony Perruzza, Jaye Robinson, Michael Thompson, Adam Vaughan, Kristyn Wong-Tam
Total members that voted No: 0 Members that voted No are
Total members that were Absent: 19 Members that were absent are Ana Bail„o, Josh Colle, Gary Crawford, Mike Del Grande, Paula Fletcher, Doug Ford, Rob Ford, Mark Grimes, Norman Kelly, Chin Lee, Peter Leon, Giorgio Mammoliti, Mary-Margaret McMahon, Joe Mihevc, Peter Milczyn, Ron Moeser, Frances Nunziata, David Shiner, Karen Stintz

Motion to Adopt Item as Amended (Carried)

Vote (Adopt Item as Amended) Apr-03-2014 8:16 PM

Result: Carried Majority Required - AU14.4 - Adopt the item as amended
Total members that voted Yes: 27 Members that voted Yes are Paul Ainslie, Maria Augimeri, Michelle Berardinetti, Shelley Carroll, Raymond Cho, Vincent Crisanti, Janet Davis, Glenn De Baeremaeker, Frank Di Giorgio, Sarah Doucette, John Filion, Rob Ford, Mary Fragedakis, Mike Layton, Gloria Lindsay Luby, Josh Matlow, Pam McConnell, Denzil Minnan-Wong, Cesar Palacio, John Parker (Chair), James Pasternak, Gord Perks, Anthony Perruzza, Jaye Robinson, Michael Thompson, Adam Vaughan, Kristyn Wong-Tam
Total members that voted No: 0 Members that voted No are
Total members that were Absent: 18 Members that were absent are Ana Bail„o, Josh Colle, Gary Crawford, Mike Del Grande, Paula Fletcher, Doug Ford, Mark Grimes, Norman Kelly, Chin Lee, Peter Leon, Giorgio Mammoliti, Mary-Margaret McMahon, Joe Mihevc, Peter Milczyn, Ron Moeser, Frances Nunziata, David Shiner, Karen Stintz

AU14.4 - The Charbonneau Commission - An Opportunity for the City to Re-evaluate its Procurement Practices

Decision Type:
ACTION
Status:
Adopted
Wards:
All

Committee Recommendations

The Audit Committee recommends that:

 

1.         City Council request the Director of Purchasing and Materials Management to review the upcoming report of the Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry, otherwise known as the Charbonneau Commission.  Such a review determine whether recommendations pertaining to establishing measures to identify, reduce and prevent collusion and corruption in the awarding and managing of public contracts in the construction industry have relevance to the City of Toronto.

 

2.         City Council request the Director of Purchasing and Materials Management to meet with the Federal Competition Bureau to determine the Bureau’s Investigation process particularly as it relates to:

 

            a.         the criteria for referring specific cases to the Bureau;

 

            b.         the level of evidence required by the Bureau; and

 

            c.         the results of individual investigations.

 

3.         City Council request the City Manager, in consultation with the City’s Agencies and Corporations, to develop a protocol for the distribution and sharing of fraud investigation related reports.  Such a process ensure that, as a minimum, recommendations contained in all such fraud investigation reports be shared with Senior Management at the City as well as its Agencies and Corporations.

Origin

(February 6, 2014) Report from the Auditor General

Summary

Procurement and contract fraud is extremely difficult to detect because, in the case of bid rigging, kickbacks, and illegal gratuities for example, it generally involves collusion between parties external to the City.  While there has to be a balance between controls and an effective procurement process, it is important that controls are continually evaluated.  The Charbonneau Commission currently in progress provides a unique opportunity to do so.

 

The Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry, otherwise known as the Charbonneau Commission, is a public inquiry in Quebec into potential corruption in the management of public construction contracts.

 

The Commission was enacted in October 2011 with a mandate to:

 

             “1.      Examine the existence of schemes and, where appropriate, to paint a portrait of activities involving collusion and corruption in the provision and management of public contracts in the construction industry (including private organizations, government enterprises and municipalities) and to include any links with the financing of political parties.

 

             2.        Paint a picture of possible organized crime infiltration in the construction industry.

 

             3.        Examine possible solutions and make recommendations establishing measures to identify, reduce and prevent collusion and corruption in awarding and managing public contracts in the construction industry.”

 

It is anticipated that the final report of the Charbonneau Commission including its recommendations will be available in mid-2015.  At the present time, the final cost of the Commission is estimated to be in the range of $35 million.

 

Even though the Commission is still in progress, there have been significant repercussions as a result of certain information provided to the Commission as follows:

 

·         In May 2013, the former Mayor of Laval was arrested and charged with corruption.

 

·         In November 2013, the Mayor of Montreal resigned as a direct result of revelations made at the Commission.

 

·         In June 2013, the interim Mayor of Montreal resigned after his arrest on criminal charges stemming from activities linked to companies central to the testimony of the Commission.

 

The proceedings of the Commission even at this point provide an opportunity for the City of Toronto to re-evaluate its procurement practices and, where appropriate, address certain areas.  In this context, while the City has an ongoing relationship with the Federal Competition Bureau this relationship needs to be revisited particularly in regards to the referral of individual cases to the Bureau and the investigation process undertaken by the Bureau. 

Background Information

(February 6, 2014) Report from the Auditor General - The Charbonneau Commission - An Opportunity for the City to Re-evaluate its Procurement Practices
https://www.toronto.ca/legdocs/mmis/2014/au/bgrd/backgroundfile-66968.pdf

Motions

Motion to Adopt Item moved by Councillor Mary Fragedakis (Carried)
Source: Toronto City Clerk at www.toronto.ca/council