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Tour Boats Contract Bid Process Under Fire | Business

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Tour Boats Contract Bid Process Under Fire

By Anthony Reinhart


The Niagara Parks Commission is fending off claims it is tilting a tendering process in favour of the Maid of the Mist, the tour boat company whose exclusive access to Niagara Falls has been controversial for the Ontario government agency.

Last year, after a four-decade monopoly for the Maid’s American owners, the province ordered the parks commission to tender the boat lease, worth more than $5-million a year to the $80-million agency. The order followed complaints in 2008 that would-be competitors had been turned away despite having promised richer returns to the commission, which for four straight years has lost money after more than a century of steady profitability.

A fairness commissioner and outside experts were appointed to prevent bias in the tender, but certain clauses in the bid document – drafted by the same parks officials who supported the Maid monopoly in the past – are raising questions about its fairness, and about Ontario’s efforts to improve its stewardship of Niagara Falls, a jewel of Canadian tourism and beacon to travellers around the world.

Commission chairwoman Fay Booker, appointed this year to clean up governance and steer the agency out of controversy, insists it is treating bidders fairly as they work toward a Nov. 24 bid deadline, and that none have complained about favouritism.

“There are very robust mechanisms for evaluating the proposals that may come in,” said Ms. Booker, and “there’s not going to be the ability of any one or two persons to influence this process.”

But Bob Gale, a former parks commissioner who broke ranks and complained to the province after his colleagues voted to preserve the Maid monopoly, said the bid document speaks for itself.

“They could have made this fair; they had a chance,” said Mr. Gale, whose commission posting was not renewed after he went public with his concerns in 2008. “I feel that this [tender] has been made to discourage the bidders.”

Registered bidders are barred by a non-disclosure agreement from publicly discussing the tender, but Mr. Gale said he has heard from several people who think it will narrow the playing field and tip it toward the Maid operation.

Among other demands, the tender requires bidders to own their boats free and clear, have at least 10 years’ tour-boat experience, carry a $10-million line of credit and pay a minimum $5.5-million annually to the commission. It awards extra points to those who can start operating quickly – a tall order for anyone who would need to get boats built and lowered into the Niagara River – and it reserves the commission’s right to overlook the highest bidder and choose someone else.

Many of these requirements appear to be prudent measures to protect Ontario’s interests, but that last clause “jumped off the page,” said Rocco Sebastiano, a corporate lawyer with extensive experience in government procurement, who examined the tender for The Globe and Mail.

“It would make a sham of their entire procurement process if they said, ‘So-and-so was the highest scoring proponent, but we gave it to this other person,’ ” Mr. Sebastiano said. “There’s no criteria they’ve set forward upon which they would exercise this reserved right.”

Bill Windsor, an Atlanta businessman who runs two tour companies, expects to be shut out of bidding for refusing to sign the non-disclosure agreement. Based on his own research of boat tours in other markets, he said the tender as written will leave “only three companies that qualify,” and thus limit Ontario’s ability to shop for the best possible bid to return the commission to financial health.

“The whole bid is structured that they limp along, doing what they’re doing,” Mr. Windsor said.

Provincial officials disputed the criticisms and said they’ve gone out of their way to be fair.

“All registered bidders are being treated equally,” said Mukunthan Paramalingham, a spokesman for Tourism Minister Michael Chan, whose ministry oversees the commission, adding that the process “will get the best deal for Ontarians.”

Howard Grant, the fairness commissioner retained by Ontario to supervise the process, said he is ready to deal with bidders’ complaints, but hasn’t received any thus far.

“Any incumbent in any process has an advantage,” Mr. Grant said. “What the [parks commission] has attempted to do and continues to do is to mitigate or minimize any of those advantages,” he said. The tender can be amended, he added, if concerns warrant.

As for concerns of bias among commission officials who wrote the tender, a procurement consultant and lawyers from outside the agency have been watching closely, Mr. Grant said.

That said, “the appearance of a conflict is just as important as a real conflict,” said Richard Powers, a governance expert at the University of Toronto’s Rotman School of Management. “You have to guard against those as well, or the process will never be viewed as fair.”

Pat Mangoff, spokeswoman for a citizens’ group that has been critical of the commission’s stewardship of Canada’s most-visited park, met with Ms. Booker and the procurement consultant to convey her concerns about bias among parks officials.

“They allayed our initial concerns, but the proof will be in the pudding when we see how many proponents submit bids,” Ms. Mangoff said. “We’re going to keep monitoring the situation to the end.”

This article originally appeared in the Globe and Mail

Published on Monday, Sep. 13, 2010 7:47PM EDT

Last updated on Monday, Sep. 13, 2010 7:49PM EDT

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