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Back of the bus
Nov 02, 2007

I can understand government contracts should be awarded to the lowest bidder in the nation’s best interests, but I can’t understand the motivation behind conceding a contract to the lowest bidder when there are valid reasons not to.

There is something about government contracts and Winnipeg that causes Conservatives to ignore the obvious in favour of the unsupportable. The Mulroney government ignored the obvious in 1986 and the Harper government recently repeated the process. 

Whatever one thinks of the politics of the NDP’s Pat Martin, the West End Winnipeg MP does present a darned good argument that the federal government should have awarded the contract to build 30 new buses for the Canadian military to Motor Coach Industries of Winnipeg. Instead, the Harper government went with Setra, a German bus company and a subsidiary of Daimler-Chrysler, which underbid Motor Coach by $2,000 a bus, or half of one per cent on the $14-million contract — the buses cost $500,000 each.

Martin is proposing, along with the International Association of Machinists and Aerospace Workers, that the government cancel the contract with the German company and re-tender the contract, allowing only Motor Coach and Quebec-based bus company Prevost Industries to submit bids.

“We make the best buses in the world right here in Canada,” said Martin in

an NDP press release. “Both Motor Coach Industries of Winnipeg and Prevost Industries in Quebec can build top-notch Canadian buses to carry our troops, but because of the government’s asinine procurement policies, neither company won the contract.”

“How does this make sense?” asked Dave Ritchie, Canadian president of the IAMAW, whose lodge represents the workers at Motor Coach. “Not only do we lose jobs to an off-shore competitor, but the government loses all the income taxes and business tax revenue which would have paid for a big part of the total cost of the buses.

“The Canadian manufacturing sector is getting slaughtered out there, and our own minister of public works is giving jobs away. Government spending should create jobs at home, not in Germany.”

Primarily due to a strong Canadian dollar hovering around US $1.05, Canada’s manufacturing sector is losing 192 jobs a day, according to the IAMAW.

News through the grapevine indicates that Motor Coach will soon be transferring a significant portion of its Canadian operations to the U.S. Although it started out as a local company founded by Harry Zoltok in 1933, Motor Coach is now owned by American equity investment firm, JLL Partners (Joseph Littlejohn & Levy), and its corporate headquarters are in Schaumburg, Illinois. Besides its Winnipeg plant, the company has another plant in Pembina, North Dakota.

For the sake of $60,000, the federal government awarded the contract to the German company, which Martin pointed out as the cost for government officials for one trip to the European country to inspect the work on the buses.

The other point in favour of Motor Coach is that it had delivered 12 new buses to the military last February. Apparently the military is quite satisfied with the Motor Coach buses. If that’s the case, why did the government decide it was in the nation’s best interests to go with another brand of bus that has limited supply and technical support in North America?

Harper got his start in politics protesting the Mulroney government’s awarding of a $1.4 billion CF-18 maintenance contract “in the national interest” to Canadair in Montreal when Bristol Aerospace in Winnipeg had submitted a lower and better technical bid. Western indignation arising from the Mulroney government decision resulted in the formation of the Reform Party with its protest message that “the West wants in.” 

When he was a reform MP, Harper  said, “Reform has triumphed in the West, but not elsewhere, because the West loses the most from the patriot game.”

As prime minister, Harper has learned the “patriot game” when it comes to new aircraft purchases. When announcing the government’s intention to buy 16 Chinook helicopters and four Boeing C-17 Globemaster military transports, the terms of reference stipulated a percentage of the work be outsourced to Canadian companies and a significant portion of the maintenance be done in Canada.

The “new era” in Canadian politics — as opposed to the “old era” of politics under Mulroney and the Liberals — so often hyped by the Harper government is not new to Winnipeg — our companies still get the shaft.

No one should be arguing to buy Canadian simply because there is a product available. When considering any government purchase, especially for the military, it is essential that the product is of the best quality and delivered at a reasonable cost to Canadian taxpayers.

In the case of Motor Coach, the product was of excellent quality and the cost was within reason. The fact that a locally produced bus had the added benefit of maintaining jobs while returning tax dollars to all levels of government, should have trumped any consideration that a German bus company underbid Motor Coach by a mere $2,000 a bus.

It was a case of buying locally being the best option.

Martin and the union are too late in their protest against the government decision in favour of the German bus company. The government should know from a past Liberal example that cancelling a contract is not an option. 

Remember when the Chretien Liberals cancelled the Cormorant helicopter contract awarded by the Mulroney government? 

When the newly-elected Liberal government announced the it had cancelled the contract, Canadian taxpayers had to shell out $500 million to the European company in penalties.

Fair, accountable government is needed when awarding contracts, but there are cases when being fair is not being accountable to the national interest.