Scott Radley: City study of Grightmire Arena fiasco shows you sometimes get what you pay for

When the city decided to do a $7-million renovation of the JL Grightmire Arena in the fall of 2017, the plan was to have the Dundas rink out of commission for one winter season.

Yet when it was finally finished almost a year behind schedule - leaving a trail of lawsuits by subcontractors who hadn't been paid, liens against city property and frustrated users who'd lost an additional season of ice time - the cost had risen to $8.4 million.

A city auditor's report on the mess presented to the audit, finance and administration committee on Thursday pointed to a number of flaws, including a delay in getting tenders out from the city, weak contract management" and project managers being spread too thin, among other reasons.

But one stands out as the biggest head-scratcher of them all.

The city has a policy that it takes the lowest bid when a project is sent out to tender. However, it has no process in place to weed out bidders that have a concerning track record. Or reward those that do good work.

The city, through its current approach, accepts the lowest bid, regardless of the level of risk involved or the previous performance of the contractor," the report said. The contractor in this case, was identified as having delivered poorly on a previous project. However, the current approach to procurement is unable to cope with situations where previously poor performers are bidding very low on new contracts."

It's a significant defect in the process. One that was flagged in a roads audit last year. And one that arose again in this case despite red flags waving like it was the final scene of Les Mis."

Not only did the winning bid come in an astonishing 22 per cent below staff's detailed cost estimate - suggesting substantial low-bid risk," says city auditor Charles Brown - but after being accepted, the contractor told the city it had made a $425,000 booboo and needed to bump up its cost by that amount.

That was a significant risk right at the outset," Brown says. What does that tell you about the upcoming management of this project?"

The low bidder for the Grightmire job - Century Group Inc., which has now been banned from bidding on city projects for 10 years - had been criticized by staff for its work on another city project. At least one employee had said he or she wouldn't recommend using the company again for a large-scale project.

It didn't make sense to me or to anyone else in Dundas that a contractor with a bad track record could possibly be the successful bidder for this highly anticipated new arena addition," says Coun. Arlene VanderBeek, who represents the ward.

Yet it was.

According to the report, Century Group pointed to factors out of its control, including design errors, inaccurate drawings, the number of changes required, asbestos discovered in the building and extreme weather conditions for the delays.

Regardless, when things started going sideways, the report says staff didn't use all the remedies it could have to fix things. Instead, the city eventually reached a settlement with the contractor and took over completion of certain parts of the project itself.

We've learned that there actually were things that could have been done at the time," VanderBeek says. There were tools there but they weren't utilized. That's embarrassing and foolish."

Yes, the whole thing was a gong show. And by having to fix the issues and deal with the delays, the cost to taxpayers ended up being 20 per cent more than the original plan anticipated.

It's at this point council would normally get put on blast. Except for one thing. The report says council wasn't told about the risk or the problems until things were well along.

Instead, council was assured that the project would be completed as scheduled," it says.

It knows better now.

Putting a program in place to evaluate, grade and track companies is one of 15 recommendations offered in the report. Director of energy, fleet and facilities Rom D'Angelo says staff is exploring the idea and should have an answer later this year.

That seems like a no-brainer. Along with the others. The city handles roughly 200 capital projects each year. Most are done right. But taxpayers' dollars are precious. All must be done right. There can be no excuse for this to happen again.

My God," Coun. Maria Pearson says. If this happens again, heads will definitely be rolling."

Scott Radley is a Hamilton-based columnist at The Spectator. Reach him via email: sradley@thespec.com