TORONTO — Provincial government procurement policies for capital projects and its general management of government properties came under fire from Ontario Auditor General (AG) Bonnie Lysyk in her 2017 Annual Report, tabled Dec. 6 in the legislature.
A statement summarizing property management and project procurement issues highlighted by Lysyk noted the design of a major request for proposals in 2014 for project management of 7,500 capital projects worth $900 million over five years attracted only three bids, all from large companies, because of its scope. Of the two companies chosen as project managers by Infrastructure Ontario (IO), one had performed poorly in a previous contract between 2011 and 2014.
The AG also charged that IO does not obtain sufficient information from project managers to assess whether the procurement of vendors for client ministry and agency capital projects is done in a competitive and fair manner. Project managers are not held accountable for meeting the original completion dates of capital projects, said Lysyk. They can revise the completion dates while the project is ongoing and IO does not always ensure the change is for valid reasons.
The audit found that deferred maintenance of government-owned buildings — the amount needed to keep properties to a minimum standard — more than doubled between 2012 and 2017, from $420 million to $862 million. Over the last six years, the average condition of government properties has deteriorated from excellent to almost poor, as measured by industry standards, the AG report said. For example, capital repairs at a government lab were deferred for five years, affecting its service delivery.
“Infrastructure Ontario can do a better job in managing government properties from start to finish,” said Lysyk in the statement.
“Ontario paid almost $19 million in 2016/17 to operate and maintain 812 vacant buildings across the province, 600 of them unoccupied an average of eight years. This suggests that the province needs to dispose of real estate within its portfolio on a timelier basis. Savings from the disposal of vacant properties can be used to improve the condition of other government properties,” Lysyk stated.
By reducing the square footage of its office space to meet its own 2012 Office Accommodation Standard of 180 rentable square feet per person, the audit identified that the province could also save as much as $170 million a year, the statement indicated.
Provincial ministries were given advance notice of the AG’s report. Minister of Infrastructure Bob Chiarelli issued an immediate statement following the release of the AG’s report saying he accepted Lysyk’s recommendations and he is committed to taking appropriate action.
“Infrastructure Ontario is an exceptionally well-governed agency that is respected both in Canada and around the world, but there is always room for improvement,” Chiarelli said.
“Our goal is to ensure that provincially-owned properties are used in the best way possible. Ontario holds one of the largest and most diverse real estate portfolios in the entire country. We know that there are challenges associated with managing a pool of assets this large, especially with many of the properties dating back 40 to 50 years, and nearing the end of their useful lives.”
Chiarelli also noted his ministry has initiated a process to develop a new provincial asset inventory.
“This tool will provide us with more of the information that we need to keep the province’s real estate portfolio in good repair,” he said.
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