(August 20, 2013) The World Bank and Canada’s Department of Foreign Affairs, Trade and Development have banned Canadian engineering giant SNC-Lavalin from bidding on aid contracts. But that hasn’t deterred the Canadian federal department of Public Works from awarding a lucrative defence contract to a subsidiary of the corruption-plagued SNC-Lavalin company.
By Lisa Peryman and Patricia Adams
For Probe International
The Canadian federal government has awarded a rich defence contract through its Public Works department to SNC-Lavalin PAE Inc., jointly owned by SNC-Lavalin Defence Programs Inc. and the U.S.-based PAE Government Services Inc. The contract, worth up to $400 million, represents the second iteration of the Canadian Forces Contractor Augmentation Program (CANCAP).
As per the previous agreement, the new contract begins with a five-year term and includes two possible two-year extensions and one possible one-year extension for a maximum of 10 years. Under the contract, SNC-Lavalin PAE Inc. provides logistical support, such as administration, equipment maintenance, health and food services, transportation, power and water supply and distribution to the Canadian military in Bosnia, Kabul and Kandahar, reports On-Site, a Canadian construction magazine.
This follows the World Bank announcement in April that it had banned the company for ten years for “misconduct” on projects in Bangladesh and Cambodia. CIDA, Canada’s former aid agency also banned the company saying that firms sanctioned by a development organization for engaging in corrupt or fraudulent practices “will be ineligible” to bid on projects it funds.
Nicholas Doire, a spokesperson for the Department of Foreign Affairs, Trade, and Development, which recently took over CIDA’s operations, confirmed last week in the Toronto Star that this ban will be maintained by his department. Mr. Doire said DFATD’s request for proposal documents stipulates that bidders prove they are not under sanction by a government or development organization providing assistance.
According to The Star, however, those restrictions don’t extend to Public Works, which said “it bars only individuals, companies, board members and affiliated companies convicted of offences under its own ‘integrity provisions.’”
In addition, the department said in an email to The Star, “by submitting a bid, the bidder certifies that neither they nor the active members of their board of directors nor their affiliates have ever been convicted of an offence under (Public Work’s) integrity provisions.”
The Star article notes that prior even to the announcement of the SNC-Lavalin PAE Inc. contract, the Conservative government had been questioned by NDP MPs asking why other departments were still allowing SNC-Lavalin to bid on government work.
NDP MP Mathieu Ravignat questioned the double standard, saying Public Works’ process of awarding and monitoring contracts was “clearly flawed.”
“Public Works can keep doing business with SNC-Lavalin, whereas CIDA and the World Bank have banned the company from bidding on their projects,” he said in the Commons in April.
This double standard apparently also applies to contracts involving the Canadian Commercial Corporation (CCC) and Export Development Canada (EDC), which is currently reviewing a contract for SNC-Lavalin to build a $163-million hospital in Trinidad and Tobago. Lawmakers in that Caribbean country are challenging the wisdom of awarding a multimillion-dollar contract to a firm that has been banned by the World Bank and Canada’s aid program. [See “SNC-Lavalin corruption allegations abound — so why’s Canada promoting the company abroad?”].
- SNC-Lavalin Corruption Allegations Abound – So Why’s Canada Promoting the Company Abroad? (journal.probeinternational.org)
- SNC-Lavalin subsidiary wins government contract despite World Bank ban (thestar.com)
- Blacklisted Canadian company got TT$2.2m from gov’t to design hospital in Penal (stabroeknews.com)
- SNC-Lavalin chair’s defence of scandal criticized as ‘weak, unpersuasive’ (business.financialpost.com)