City AG Questions Cost Of E-Bus Purchase
The is a release from the Office of the City Auditor General:
Today, Auditor General Nathalie Gougeon released the Audit of Zero-Emission Buses Sprint 4 – Envari Contract, which had previously been tabled in-camera at the June 9, 2023, Audit Committee.
The audit report assessing the contract between the City of Ottawa and Envari Holding Inc., a subsidiary of Hydro Ottawa, for the provision of charging infrastructure to support the Zero Emission Buses (ZEB) Program has highlighted potential risks to the City with the existing contract structure.
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The report underscores that the contract’s “cost-plus” arrangement, involving a 15% overhead and profit margin component, combined with no fixed price, could result in higher overall project costs. The Auditor General further emphasizes that her Office could not provide assurance that this agreement would yield the best value for money for the City. Lastly, in the absence of detailed requirements reflected in the contract, the City will require appropriate technical expertise to effectively oversee and monitor the contract’s execution.
“The audit conducted by my Office, offers recommendations aimed at addressing these issues to help support the successful implementation of the ZEB Program,” said Mme Gougeon.
There are 3 recommendations and management agreed with all of them.
Full copy of the report is available on the Auditor General’s website at www.oagottawa.ca
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Headline “City Buys Pig in a Poke” or as Watson/Hubley shop “Just Do It” Competitive bid process to a Expression of Interest not in their MO. Yet another example of “it’s not our money” so who cares.
Try to run a normal household budget like these representatives do and you will soon be in debt well over your capability to deal with it…. Oh yes that is where Ottawa’s financials are at now, and rising!! Higher interest rates will bring a significant TAX INCREASE.
We always blame the councillors and mayor for the wrongdoings at city hall and never focus on the project ,management teams. Unlike councillors, who need to be voted out of office, project managers can be relieved of their duties at any time (eg. the absence of detailed requirements reflected in the contract). While I realize that city workers are unionized, which adds some complexity to the issue of relieving them of their jobs, someone needs to take a long hard look at the way projects are run within Ottawa and clean up the mess. This would be a good project for our newly-appointed city manager to dig her teeth into.
Let me see if I have this right (spoiler alert: I do). The city is the 100% shareholder of Hydro Ottawa. Hydro Ottawa is the 100% shareholder of Envari Holding Inc. The city has a contract with Envari Holding Inc., or effectively with itself.
Aside from pondering the transfer pricing issues associated with consolidation accounting (safety warning, put down any sharp tools and step away from heavy equipment), the city has all of the financial risk on this project, irrespective of whether the contract is fixed price or not.
If this is what the Office of the Auditor General has been spending its time on, then clearly they have lots of time to handle more compelling issues, such as the awarding of the Trillium Line Stage 2 contract to a consortium that failed the technical requirements twice. Barring that, prudent councillors might want to focus their cost cutting attention on the AG’s obviously bloated staff levels.
Sisco. Valid points but tell me. Where does the buck stop? Sure city project managers are supposed to offer good sound advice and sometimes they do. However if a councilor WANTS or the Mayor desires, or in some cases do not want. Look no further than Landsdowne, LRT, AAA baseball, snowplowing creating bicycle ROADS and so much more.
Instead of cleaning house the tall foreheads promote. Tenure seems to equal promotion, where excellence is ?