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The Ottawa Hospital appears to have broken provincial procurement rules and cost taxpayers at least $1 million more by sole-sourcing major equipment for the University of Ottawa Heart Institute expansion.
The equipment, including three generators, was sole sourced from GAL Power, one of the companies the hospital alleges was a co-conspirator in a massive fraud and kickback scheme involving former hospital employees. contractors bidding on the Heart Institute job were instructed, as part of the requirements, to buy generators and equipment only from GAL Power. The instructions contained in the massive bidding document on the project, raised the eyebrows of some bidders at the time. One failed bidder even offered a “discount” of $1.1 million in their bid, if they were allowed to buy the same equipment somewhere else.
The Heart Institute job is not part of the allegations of a massive fraud and kickback scheme detailed by The Ottawa Hospital in an explosive statement of claim filed in court earlier this month. Details of the scheme were uncovered by forensic auditors who, sources say, did not uncover issues with the Heart Institute bid. The hospital employees alleged to have overseen the scheme, Frank Mednewitsch, in charge of the facilities and planning department, and Brock Marshall, former director of the engineering and operations planning department, were both with the hospital at the time the Heart Institute bid was being drawn up.
Bidding on the on-going $135-million Heart Institute expansion was overseen by Infrastructure Ontario, but The Ottawa Hospital – which owns the building where the institute is housed – was in charge of procuring extra generators, said Heart Institute spokesman Vincent Lamontagne. Both hospitals and the provincial infrastructure agency were involved in the bidding process.
“Since the expansion of the University of Ottawa Heart Institute required the installation of extra generators, the Ottawa Hospital decided to go with this supplier,” said Lamontagne. “With our service agreement for the procurement and provision of plant services, they ran this specific piece of the process.”
Provincial procurement rules allow for sole sourcing in exceptional cases, including “to ensure compatibility with existing products,” among other reasons. Sources in the construction industry have said they could see no reason why this would include specifying a company from which a generator should be purchased.
The Heart Institute operates independently from The Ottawa Hospital, but leases space from it.
The generators, the bid specified, had to be purchased from Ottawa’s GAL Power and be manufactured by SDMO, a French company. According to the Broader Public Service Procurement Directive, provincial regulations that cover hospitals, a competitive bidding process is required for goods and services over $100,000, although there can be exceptions. The generator equipment was worth several million dollars.
The wording of the bid requirements were unusual enough to raise eyebrows among some contractors bidding for the job. One even looked around to see if GAL Power was offering the best price for the required generator equipment. It was not.
Steven Smith, vice president and area manager of Ellis Don, which unsuccessfully bid on the Heart Institute job, said his company offered a “voluntary cost savings” of $1.1 million on its bid, after learning it could purchase the same generator equipment elsewhere for $1.1 million less than GAL Power would sell it to them for.
He called the sole-source provision “bad business.
“Sole sourcing equipment like this does not make good business sense … it makes you question whether the process was entirely above-board or not. As taxpayers, did we get value for money?”
Smith alleged that the hospital “paid more for that generator than it was worth.” He and others in the business said they could see no reason why a generator would have to be sole sourced.
It is not known how much the generator equipment cost the winning bidder.
PCL, the general contractor on the job, has said GAL Power and Federal Electric, both of whom were named in the explosive hospital civil suit and both of whom are working on the heart institute expansion, will continue on the job as subcontractors. The company has acknowledged Mednewitsch was a guest of PCL on a luxury fishing trip to British Columbia.
The Heart Institute job was not part of the allegations made in the statement of claim by the hospital against DRS Construction, Federal Electric, GAL Power Systems Ottawa Ltd., Ottawa Diamond Construction and the companies’ owners, as well as Mednewitsch and Marshall.
In a 30-page statement of claim filed in Ontario Superior Court earlier this month, The Ottawa Hospital claimed Mednewitsch oversaw a fraudulent scheme that funneled money to the companies involved, through bid rigging and inflated invoices in exchange for kickbacks and payments. The hospital claims Mednewitsch and others went on trips — including a luxury fishing trip to British Columbia followed by a trip to California wine country, that, sources say, cost tens of thousands of dollars. The hospital also claims GAL Power and Federal Electric each hired one of Mednewitsch’s daughters and, in one case, the hospital paid her salary. Mednewitsch went to work for Federal Electric soon after being forced out of the hospital, but has since left, sources have told the Citizen.
None of the allegations in the lawsuit has been proven in court.
epayne@postmedia.com
查看原文...
The equipment, including three generators, was sole sourced from GAL Power, one of the companies the hospital alleges was a co-conspirator in a massive fraud and kickback scheme involving former hospital employees. contractors bidding on the Heart Institute job were instructed, as part of the requirements, to buy generators and equipment only from GAL Power. The instructions contained in the massive bidding document on the project, raised the eyebrows of some bidders at the time. One failed bidder even offered a “discount” of $1.1 million in their bid, if they were allowed to buy the same equipment somewhere else.
The Heart Institute job is not part of the allegations of a massive fraud and kickback scheme detailed by The Ottawa Hospital in an explosive statement of claim filed in court earlier this month. Details of the scheme were uncovered by forensic auditors who, sources say, did not uncover issues with the Heart Institute bid. The hospital employees alleged to have overseen the scheme, Frank Mednewitsch, in charge of the facilities and planning department, and Brock Marshall, former director of the engineering and operations planning department, were both with the hospital at the time the Heart Institute bid was being drawn up.
Bidding on the on-going $135-million Heart Institute expansion was overseen by Infrastructure Ontario, but The Ottawa Hospital – which owns the building where the institute is housed – was in charge of procuring extra generators, said Heart Institute spokesman Vincent Lamontagne. Both hospitals and the provincial infrastructure agency were involved in the bidding process.
“Since the expansion of the University of Ottawa Heart Institute required the installation of extra generators, the Ottawa Hospital decided to go with this supplier,” said Lamontagne. “With our service agreement for the procurement and provision of plant services, they ran this specific piece of the process.”
Provincial procurement rules allow for sole sourcing in exceptional cases, including “to ensure compatibility with existing products,” among other reasons. Sources in the construction industry have said they could see no reason why this would include specifying a company from which a generator should be purchased.
The Heart Institute operates independently from The Ottawa Hospital, but leases space from it.
The generators, the bid specified, had to be purchased from Ottawa’s GAL Power and be manufactured by SDMO, a French company. According to the Broader Public Service Procurement Directive, provincial regulations that cover hospitals, a competitive bidding process is required for goods and services over $100,000, although there can be exceptions. The generator equipment was worth several million dollars.
The wording of the bid requirements were unusual enough to raise eyebrows among some contractors bidding for the job. One even looked around to see if GAL Power was offering the best price for the required generator equipment. It was not.
Steven Smith, vice president and area manager of Ellis Don, which unsuccessfully bid on the Heart Institute job, said his company offered a “voluntary cost savings” of $1.1 million on its bid, after learning it could purchase the same generator equipment elsewhere for $1.1 million less than GAL Power would sell it to them for.
He called the sole-source provision “bad business.
“Sole sourcing equipment like this does not make good business sense … it makes you question whether the process was entirely above-board or not. As taxpayers, did we get value for money?”
Smith alleged that the hospital “paid more for that generator than it was worth.” He and others in the business said they could see no reason why a generator would have to be sole sourced.
It is not known how much the generator equipment cost the winning bidder.
PCL, the general contractor on the job, has said GAL Power and Federal Electric, both of whom were named in the explosive hospital civil suit and both of whom are working on the heart institute expansion, will continue on the job as subcontractors. The company has acknowledged Mednewitsch was a guest of PCL on a luxury fishing trip to British Columbia.
The Heart Institute job was not part of the allegations made in the statement of claim by the hospital against DRS Construction, Federal Electric, GAL Power Systems Ottawa Ltd., Ottawa Diamond Construction and the companies’ owners, as well as Mednewitsch and Marshall.
In a 30-page statement of claim filed in Ontario Superior Court earlier this month, The Ottawa Hospital claimed Mednewitsch oversaw a fraudulent scheme that funneled money to the companies involved, through bid rigging and inflated invoices in exchange for kickbacks and payments. The hospital claims Mednewitsch and others went on trips — including a luxury fishing trip to British Columbia followed by a trip to California wine country, that, sources say, cost tens of thousands of dollars. The hospital also claims GAL Power and Federal Electric each hired one of Mednewitsch’s daughters and, in one case, the hospital paid her salary. Mednewitsch went to work for Federal Electric soon after being forced out of the hospital, but has since left, sources have told the Citizen.
None of the allegations in the lawsuit has been proven in court.
epayne@postmedia.com
查看原文...
