To the Editor, It is not surprising to see Patrick Dillon and Ron Johnson criticizing the City of Sault Ste. Marie for studying the benefits of open tendering in their city.
Both are the heads of organizations who are direct beneficiaries of the monopoly on construction projects in that city.
The Interior Systems Contractors Association of Ontario, which Mr. Johnson leads, represents companies that are affiliated with the union that holds the monopoly. And both gentlemen have made incorrect assertions about Cardus in recent days, which I would like to correct.
The fact that competition leads to better value is very well substantiated in law and fact — not "right-wing" thinking as Dillon and Johnson claim.
It is, in fact, the almost universal consensus among economists today.
University of Toronto economist Morley Gunderson and I co-authored a Cardus report, which found that open competition for municipal construction contracts could lead to savings of eight to 25 per cent on project costs.
And leading procurement expert Stephen Bauld and I co-authored a paper which notes that closed tendering is not considered best practice.
Moreover, the OECD, governments of all leading Western economies and even the Province of Ontario’s procurement directives all underline the importance of competition in procurement for fairness and taxpayer value.
Work that is paid for by all — as publicly funded construction projects are — should be accessible to all who are qualified, regardless of the private affiliations of workers on a given project.
Finally, our prediction that costs for tradespersons in construction would rise under the Ontario College of Trades (OCOT) was justified. As we note in our paper, costs rose from approximately $20 per year per tradesperson before the OCOT came into existence to approximately $120 per year per tradesperson now. That represents a six-fold increase in costs.
Dillon and Johnson are entitled to their opinions, but best procurement practice and economic data suggests that competitive tendering is a better, and fairer, way to protect the public interest.
Work and Economics Program
Director at Cardus