Office of the Auditor General
September 29, 2014
Auditor General Delivers Report on His Review of the Cancellation of a Contract Between the Department of Transportation and Works and Humber Valley Paving Ltd.
Auditor General, Terry Paddon, delivered his report on a review of the cancellation of a contract between the Department of Transportation and Works and Humber Valley Paving Ltd. to the Minister of Finance today.
On May 8, 2014, the Lieutenant-Governor in Council requested that the Auditor General inquire into and report on any and all aspects of a contract between the Department of Transportation and Works and Humber Valley Paving Ltd. related to Project Number 1-12PHP.
The objectives of the review were to determine whether:- The original tender and contract award related to Project 1-12 was conducted in accordance with the provisions of the Public Tender Act;
- Progress payments made in connection with the contract for Project 1-12 were properly supported;
- Change orders and other adjustments to the contract for Project 1-12 were appropriately documented and authorized;
- The decision to mutually agree to cancel the contract related to Project 1-12 was appropriately evaluated and authorized; and
- There was any evidence of undue influence in the evaluation or timing of the decision to cancel the contract related to Project 1-12.
The Auditor General has reached conclusions against these five objectives. The report also contains 33 findings and five recommendations.
In summary, the Auditor General has concluded that:- Transactions made under the original contract and contract changes were all in accordance with legislation or Departmental policy, however, progress payments made on a bi-weekly basis were not in accordance with the contract;
- The urgency to conclude an agreement on March 13, 2014 resulted in an evaluation that, with the benefit of more time, may have more fully considered all options available to the Department; and
- There is no documentary evidence of undue influence in the decision to mutually terminate the contract related to Project 1-12.
- The Auditor General was not able to satisfy himself why two Ministers, within ½ hour, independently contacted the Deputy Minister of Transportation and Works to enquire about the status of Humber Valley Paving Ltd. on the morning of March 13, 2014
- The Auditor General was not able to satisfy himself why the process to come to an arrangement with Humber Valley Paving Ltd. to terminate the contract related to Project 1-12 had to be concluded on March 13, 2014 − the day before nominations closed for the leadership of the Progressive Conservative Party of Newfoundland and Labrador.
The Auditor General also found that the Minister of Transportation and Works knowingly withheld information from the Premier of Newfoundland and Labrador related to the decision to mutually terminate the contract related to Project 1-12 between HVP and the Department.
The Report is available on the Office of the Auditor General website at //www.ag.gov.nl.ca/ag/reports.htm
- 30 -
Media contacts:
| Terry Paddon Auditor General 709-729-2700 |
2014 09 29 11:55 a.m.