BRITISH COLUMBIA

Low bidder policy targeted

The massive cost overruns in the con-
struction of the Coquihalla Highway were
the result of an “unrealistic deadline for
completion” imposed by former Premier
Bill Bennett who wanted the project fin-
ished for Expo 86, and of the government’s
low bidder policy which awarded complex
toadbuilding projects to many inexpe-
tienced and unqualified firms, trade unio-
nists told the commission of inquiry Sept. 1.

And as part of its work, the commission
should investigate reported discrepancies
between what contractors billed the
government for labour costs and what was
actually paid to employees, Carpenters
Provincial Council secretary Colin Snell
told the hearings.

The hearings, which opened in Kam-
loops Aug. 31 before moving to Vancouver
for two days of hearings, Sept. 1 and 2, were
convened by commission chair Doug
MacKay who was appointed by cabinet
July 31 to inquire into the huge overruns in
construction costs on the Coquihalla
Highway. MacKay, a professional engineer,
will also be holding hearings in Victoria
later this month.

Originally budgeted to cost $250 million,
Phase I of the new highway into the Interior
finally came in at $400 million as contract-
ing firms invoiced the government for
amounts far above their original bids. The
most notorious case involved J.C. Kerkhoff
and Sons Construction which bid $5.5 mil-
lion to construct the Great Bear snow shed
but billed the government for nearly twice

that amount — $10 million — before the

Ministry of Highways ordered the company
to stop sending bills.

In Tuesday’s hearings, Snell called on the
commission to investigate why the Ministry
of Highways accepted so much of the cost
overrun before it told Kerkhoff to stop
sending bills.

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SHIELDS SNELL

In addition, he said, it should examine
Possible discrepancies between the wage
schedules outlined by one of Kerkhoff’s
sub-contractors, ALC Construction, and
the amount actually paid to employees on
the site.

Snell read into the record a purchase
order from ALC which indicated that
Kerkhoff was getting various tradespeople
from ALC at rates ranging from $19.82 an
hour, including travel allowances, for a
labourer to $31.15 an hour for a foreman.

He added that a former labourer of ALC
who had worked on three Overpass projects
on the highway for the company would be
Swearing Out an affidavit this week declar-
ing that he had been paid only $8 an hour.

ALC Construction was involved with
Kerkhoff on a Defence Department project
in Chilliwack where it was revealed that the
company, although purported to be a sub-

contractor, was Teally only providing pay-

roll services for Kerkhoff.

: On that project, ALC
violating federal fair Gane esa
was ordered — following the Carpenters’
intervention — to pay employees the dif-
ferences between what they were getting
and the federal wage minimum. Workers
were subsequently given their cheques
— and than asked to sign them back to the
company or risk losing their jobs.

Snell also charged that the Coquihalla
Highway project demonstrated the folly of

the low bidder acceptance policy dictated by
the government.

“The low bid policy compels the ministry
to overlook qualified, experienced, respon-

sible companies for whoever supplies the
so-called low bid.

“Tt is a policy which is failing the taxpay-

ers of B.C. and should be scrapped,” he
said.
_ The low bid policy was also the targetina
joint brief submitted in hearings in both
Kamloops and Vancouver by the Operating
Engineers, Teamsters and Labourers.

Ken Lippert, appearing for the three
unions, told the hearing that the low bid
policy had “borne bitter fruit” on the
Coquihalla since it resulted in some con-
tracts going to out of province contractors.

The policy means jobs, taxes and pur-
chasing power go outside the province and
results in “a loss of quality as inexperienced
or quick buck contractors try to build road
in difficult terrain,” he said.

The president of the Roadbuilders Asso-
ciation of B.C., Dennis Hall who, like Lip-
pert, appeared in both the Kamloops and
Vancouver hearings, also pointed obliquely
to the low bid policy, noting that contracts
for engineering and design work “were
based on price only and not necessarily on
experience or quality.”

He defended the government’s decision
to “fast-track” the highway project calling it
a “sound business decision.”” He acknowl-
edged, however, that costs would probably

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PACIFIC TRIBUNE, SEPTEMBER 2, 1987 e 11

_ In Coquihalla cost overruns

have been lower if there had been more time
for both design and construction work.

In fact, time was the key factor in the cost
overruns — because the Bennett govern-
ment hurried up the highway project to

- have it completed before the opening of

Expo 86, John Shields, president of the B.C.
Government Employees Union testified.

“Tt is classic example of what can happen
when political interests override the public
interest,” he said.

Because of the political deadline imposed
by Bennett, much of the design work was
contracted out to a variety of design firms,
many of which did not have the necessary
expertise. And deficiencies in their design
work led to later cost overruns, he said.

In one case, a stretch of road cost $15
million more to complete than expected
because of deficient soil studies on the site.
In another, bridge footings on the Dry
Gulch bridge collapsed because of poor
engineering and had to be re-tendered. The
hold-up in the bridge work also create costly
delays in moving heavy equipment to the
opposite side.

Shields said the project was “character-
ized by haste and waste,” citing as the most
glaring example the government’s insistence
that paving be done in all weather condi-
tions in violation of all ministry standards.
Those standards specify that no paving
should be done at temperatures lower than
2 degrees Celsius — yet crews on the
Coquihalla were paving “at temperatures of
-10 to -20 degrees Celsius,” he said.

He also noted that the union had received
several reports of cases where ministry staff
had pressed contractors to meet their obli-
gations only to have the contractors com-
plain to political contacts in the government.
“The result was pressure from the political
level to leave the private contractors alone,”
he said.

In response to suggestion from commis-
sion chair Doug MacKay that much of his
testimony was hearsay, Shields emphasized
that highways ministry staff are bound by
an oath of confidentiality and would face
discipline if they were to appear before the
commission themselves. But he offered to
provide the names of some staff members
who could be asked specific questions if
they were subpoenaed.

MacKay has not so far subpoenaed any
witnesses or evidence but in his introduction
Tuesday he didn’t rule that possibility out.
Some 15 companies have been asked to
provide contract information to allow
comparison with submitted evidence.

The commission had originally been
slated to prepare a report by Sept. 30 but
that deadline is likely to be pushed back as a
result of the ministry’s own late brief which
won’t be submitted until Sept. 14.

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