The cost of political patronage
Your editorial, “A Failed Institution,” describes some of the political patronage contracting practices of the Government of the Northwest Territories.
The Construction Association has challenged the GNWT over negotiated and sole sourced contracts for five years without positive results. Our position is that public funds for public works should be awarded by public tender.
The virtue of the public tender process is that it protects against the political manipulation of awards; it identifies the true market value or cost of a project; and it insures that bona fide contractors end up doing the work
In the editorial, you noted that “Premier Don Morin has finally agreed to publish information about these kinds of contracts. According to a study of this data, undertaken by Treeline Planning Services over 45 per cent of GNWT contracts are either negotiated or sole sourced.
Since negotiated or sole sourced awards are usually 10 per cent to 25 per cent higher than similar projects that are tendered by competition, the annual additional cost to the taxpayer runs into millions of dollars.
Nevertheless, the policy of the current government is to continue sole sourcing and negotiating work. Why is this?
As the amount of public works dramatically declines through budget cuts, competition for a short supply of work increases.
Pressure is then placed on politicians to protect and reward allies and supporters with contracts. Driven primarily by patronage considerations, projects are promoted that are inadequately priced, often suffer from cost overruns, and are, ultimately, bailed out by the government at additional expense.
What can be done to remedy this situation If the government of the NWT awarded construction works and service contracts through public tender, rather than relying on negotiated and sole sourcing method,, there would be an overall cost saving to government of approximately $25 million in the budget between now and division.
These savings could be apportioned to other public works and projects, such as schools and housing, which are needed everywhere
Consequently, with a full commitment to public tendering, additional work and job opportunities would be created throughout the North. Something to consider!
NWT Construction Association