Political Sole-Sourcing

In what appears to be a classic case of local vendor bias, Canadian transport manufacturer Bombardier, Inc. has found itself in hot water over sole-source contracts with two separate municipal authorities. Both deals are political, with Bombardier’s promise of local jobs seeming to influence the decision not to go out to public tender.

One contract involves the supply of 234 new subway cars to the Toronto Transit Commission, with rival Siemens claiming it could do the job C$100M cheaper by manufacturing offshore.

The other contract is a C$1.2B deal with the Quebec government to replace Montreal’s ageing fleet of 336 subway cars. Rival French vendor Alstom SA is challenging the Montreal subway deal in court. “We are of the opinion that the law calls for an open bidding process for any public transit equipment or material valued at more than $100,000″ said Alstom Canada spokesman Pierre Renault.

The Montreal dispute should be of interest to government procurement teams worldwide, as it deals with a fairly universal question: what happens if we don’t follow our own procurement rules? You end up in court is one answer. What happens next remains to be seen.

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