Here we go again.
Readers will recall I’ve long argued that ALL city contracts should be a matter of public record, as a matter of course. If the city contracts for services, the contract should simply be posted on the city’s website, with all the particulars spelled out—term, dollar amounts, details. Such a policy would give transparency to the tendering process and accountability to the taxpayer. Moreover, it will tend to bring city costs down, as successful bids will be public record, and future competitors for similar contracts will offer lower prices.
At the risk of rousing the CFA monster, I’ll point out that all American cities routinely release contracts, to no observable negative effect.
There’s some bizarre argument here that releasing contracts would put companies at competitive disadvantage as proprietary information would become public. I can’t even wrap my head around that argument; it makes no sense at all. None. Contracts don’t reveal workers’ wages or the company tax number or email passwords; contracts merely spell out what particular service is going to be provided, at what cost over what time period—nothing truly proprietary. But that’s the reason I’m repeatedly given when I’m denied city contracts.
Of course, if companies don’t want certain information to be part of the public record, they have every right to decline to bid on public projects. It’s as simple as that.
Anyway, this has been a burr under my saddle ever since the city refused to give me the contract with Nustadia for the four-pad arena on Hammond Plains Road.
But when the concert loan scandal materialized, I thought I had an inarguable right to get the various contracts between the city and Power Promotional Events, Harold MacKay’s promotional company that hosted the Common concerts. Power Promotional Events no longer exists, I told the city, so therefore there are no proprietary issues, and no company has standing to object to the release of the contracts.
Lo and behold! The city agreed with me, and sent me a nice letter saying they were prepared to give me the contracts. But then, some anonymous (to me) “third party” objected, by filing an appeal of the city’s decision with the provincial Freedom of Information and Protection of Privacy Review Office.
The folks at the FOIPOP office tell me they’ll probably get all the documents together by the end of the month, and start making a determination as to whether the appeal meets the terms spelled out in Sections 20 and 21 of the Freedom of Information Act. Who knows how long this will take? It could be a 20 minute once-over, or it could take years.
As it happens, Larry Munroe, the city’s auditor general, will release a report on the concert loan scandal before the end of the month. Presumably he has read the contracts, so perhaps some of that information will come out via the report.
Still, there’s a greater principle at stake here. We now know that $5.6 million of secret, illegal loans were funnelled through a back-door city bank account to Power Promotional Events. The public interest demands that every aspect of those loans be put in the public record, and the best way to do that is to make the contracts public. The public interest trumps any conceivable personal information that might be in the contracts.
For The Coast’s complete coverage of the Common concert financing scandal, click here.
This article appears in May 19-25, 2011.
TIM this is the way HRM procurement works. They do what they feel then create supporting documents after the fact to justify poor procurement activities. I think the AG will be extremely critical when he gets to them Now Cathy the tool and Anstey are gone as they were party to these activities.
A team working together to only reveal info tio council and public when they had to and OHHH I could go on
Tim – the loans were not illegal. Wrong word. HRM is just screwing around and is determined not to give you a scoop. Other journos should be bombarding them with FOI requests.
Wally – Cathy O’Toole has said she knew nothing of the arrangements, I suggest you retract the portion of your post which refers to her.
Wally– Cathie O’Toole did everything by the book. She should be celebrated as a public servant who put the public’s interest above all else. We wouldn’t know about this fiasco were it not for her.
joe- I dunno. The loans clearly violated provincial law in the municipal governance act, and the city charter as well. Whether they were criminally illegal remains to be seen, but they definitely violated the law. Illegal.
I will retract nothing. I am very familiar with past work of hers. She was the CFO if she didn’t know anything she should of and My comments were not specific to the concert scandal. My comments refer to the bigger picture regarding contracts and procurement at HRM.
Athough I cannot seem to locate it I will refer to a comment either made my Kathy O’Toole or the othe Kathy a few years ago. maybe 3 or 4 years ago and it may be in Audit Committe meeting or a report I read about preocurement but it was something to the effect that there was no need for external auditors or an iindependent auditor because they were in effect the auditors. I found that starement very defensive and now years later in light of the concert scandal I chuckle at it because it is very obvious that internal controls very very poor and cannot wait for the AG report
As a person whose livelihood revolves around competitive bidding on public and private tenders locally and internationally, I can tell you that the reason you’re provided is very much a valid one. Winning a tender is an exercise of trying to provide the best service/product to the client for the highest price you can get away with. That involves a grueling exercise of trying to guess what the competition’s bid will be and trying to offer a price lower than their bid.
The methods of finding out what the competition’s bid price would be in a tender can border on espionage sometimes, so these figures are a closely guarded secret. Companies spend a lot of time and money learning about what the market can bare, researching trends, and working out their margins. If I win a tender (due to my hard work) and my bid price is made public, I might as well hand the business to my competitors because they’ll simply go back and copy all the effort I spent on getting the best price, but they won’t have to invest the time and money that I invested.
Then, they’ll wait until the next tender and beat my price because now they know what my bid range is going to be. On the other hand, I don’t know what their prices are because their bid was not disclosed in the process (because they either lost the bid to me originally, or they didn’t participate in the first bid). So that puts me at an automatic disadvantage in future bidding, which is not fair.
Ensuring transparency in the disbursement of public money is the job of people who’ve been selected by the public to represent them in this oversight. Those representative operate under confidentiality rules and are accountable, so competing firms don’t mind it if someone challenges the bid results and an internal process investigates and looks at all the bidding figures from all the companies involved.
Giving that information to the papers, on the other hand, is a no-no.
ISSamat – Yeah I am ok with Tender dollar amounts being private but both the city and the province release that info and there doesnt seem to a lot of consistency. The HRM has their own way of doing business and has for a long time. Internally everyone has one anothers backs in an “Us against the world” team approach.
I have 6 inches of printed files and hundreds more emails and reports in one of my computers on the HRM. The whole way the Concert Scandal came down was of ZERO surprise. The secrecy at the senior staffing levels.
I am still digging for that quote “we dont need auditors” I know it is in writing just its 3-4 years old. It really is an interesting quote in light of how much has been uncovered.
It is possible that the comment was made by Kathie Sanderson who was a senior Manager of Financial Services and not Kathie O’Toole.
All I know is if I was CEO of a large company and this type of financial shenanigans happened in my company iw ould be holding Senior Financial peopla ccounatble regardless of if they knew of not.
Issmat– every provincial expenditure is public record, and that doesn’t seem to stop companies from bidding. They even post them on the intertubes:
http://www.gov.ns.ca/finance/en/home/publi…
I can’t wrap my head around the argument that public expenditures should not be public record. This is a democracy, not some soviet-style oppressive government with secret budgets and the party making expenditures behind closed doors.
Every jurisdiction handles bid disclosures differently. I’m just presenting the argument from the bidder’s point of view.
What I’ve seen happen in many cases is that the government (or funding body) discloses the budget for the project being tendered. This would be the ‘public expenditure’ you’re referring to and which appears in the link you provided. That number would include the amount they paid for a project (i.e. the bid price) plus all other government administrative expenses attached to that specific project, so it would be hard to guess the bid-price portion of that budget, which offers some protection to the bidder.
The idea is not to hide money or have a secret budget. The idea is be accountable to the public while at the same time maintain confidential information… confidential. There is no reason for you or anyone else to know what my specific bid price is. The public interest, in my view, is limited to whether or not there was any wrongdoing, or how much the government is spending on certain areas/initiatives as a whole.
Really, what other possible reason would you have to find out the details of my bid? Anything outside protecting the public from wrongdoing and tracking government promises immediately raises a question about your intent from chasing the specifics of a bid price, and 95% of the time that intent causes harm to the business that’s bidding. So why would you do that? There are people who work for these businesses and families that depend on income from these projects. It’s unethical to smear a business or limit its future opportunities just so you can get a story out.
You can chase a story about wrongdoing all you want, but you can do that by asking the right questions, not making a fuss about information that you don’t need to have in order to establish wrong doing.
There are elected representatives of the public and bureaucrats that you can go to and ask them to check on any suspected wrongdoing for you. By virtue of their position, these people are bound to a higher duty of care (than The Coast or a general member of the public) to protect confidential and proprietary business information, so they can see the bid prices and report back to the public on whether any wrongdoing has taken place, not what the bid prices actually are. If you doubt these people’s integrity, then you have avenues to challenge them as well. But that’s not the bidder’s problem and my business shouldn’t suffer for it.
If there WAS wrongdoing and the file is investigated, then I think bidders should be prepared for their bids to be a matter of public record. Even then, there are possible protections in place that may be extended to the companies who acted in good faith and are not involved in the wrongdoing.
Again, different jurisdictions, governments, and funding bodies have different disclosure rules. These rules are communicated fully to the bidder before the bid. If a bidder enters a bid with the understanding that bid prices are not disclosed, and then a reporter pressures a councilor or a bureaucrat to tell him the winning bid and it’s all over the papers the next day, you can bet there will be legal action taken against the government! And the money the government will spend defending itself is public money. So, it’s irresponsible for someone who is privy to bid prices to disclose that information without a legal opinion, and that opinion is tied to the terms of the specific bid that bidders participated under.
Not everything is a conspiracy. It’s just business.
“Really, what other possible reason would you have to find out the details of my bid? “
BECAUSE IT’S MY MONEY. I pay a lot in taxes, and I have every right to know where that money is going.
And you’re simply wrong: The province will and does give me specific dollar amounts paid to each vendor. If you drill down on Public Accounts, you’ll see it on the website. I call provincial agencies all the time and ask them, “How much are we paying company X for this?” and they tell me.
There’s the additional importance of knowing how much of a project cost is administrative, and how much is to the vendor, which is public record because we need to know how effective and efficient the bureaucracy is.
The ‘It’s my money’ argument doesn’t negate confidentiality rules of a bid, if they exist. As an individual, your ‘tax’ contribution to that bid’s budget is too minuscule for an ‘it’s my money’ claim. As a people, the claim is stronger, but it’s not absolute. That is: the claim for information still adheres to the rules of the bid and procurement laws of the jurisdiction, if they exist. These laws are seldom perfect.
You wanting to publicize competitive confidential information about my private business because a fraction of your tax money might have contributed to my business is akin to me asking for your personal credit rating because my tax money contributes to the transit service that goes by your house, which contributes to the higher assessment of your property when you want to sell it. Philosophically, that argument is ludicrous.
As mentioned before, if the ‘public’ is concerned, there are avenues for the public to find out certain information. But that information, in my view, should be a balance that considers who may be harmed by releasing that information. Not everything that the ‘public’ wants should be handed over regardless of law.
Furthermore, in the absence of a clear law to govern specific information, the request for information should be viewed in context. If you’re someone who is known to have twisted similar information in the past to cause public harm to a person or business, then your request is more likely to be scrutinized. And we all know you’re not exactly a bastion of journalistic integrity. A simple search on this site will turn up all the times The Coast had to apologize on your behalf for libelous and/or inaccurate reporting. This, to be fair, is notwithstanding the pieces of excellent investigative journalism you have contributed to this paper.
In any case, I’m presenting the reason why businesses prefer to protect this information because you didn’t care to present the opposite point of view in your article. We are obviously on opposite ends of the philosophical debate here. So let’s agree that if a clear procurement policy exists that indicates that bid prices will be disclosed, then any business that participates in that bid should not mind that information becoming public.
Here’s the deal: If you don’t want the public to know how much the public is paying for your business’s services, THEN DON’T DO BUSINESS WITH THE PUBLIC.
It’s really as simple as that. I can’t imagine any other case where the person/organization paying for a service is not allowed to know how much they’re paying for that service.
This is really quite the ridiculous conversation.
God bless you Tim.
“Winning a tender is an exercise of trying to provide the best service/product to the client for the highest price you can get away with.”
This attitude is exactly why it should be made public to prevent over paying for a service.
By opening the bid to the public, competitors and staff members allows finding of areas which savings can be made. This allows funds to be spent on more projects benefiting more people.
People who are trying to sell something for way more then it’s worth are also opening the door to a competitor who can do it far less and higher quality. By not focusing on the best way of doing things will result in a business early demise or restrict it’s growth.