Question re: F.H. Collins Secondary School tender

Hansard November 4, 2013

Mr. Silver:   I have a question for the Premier about this government’s financial mismanagement of the F.H. Collins project.

In March 2013, the Premier told Yukoners the government had two estimates that told them that the schools could be built for $38.6 million. In fact, the government had two estimates that told them the opposite. It even had an estimate that told them that it would cost $43.7 million. Despite knowing this, the government instructed public servants to disregard the higher numbers and kept the budget from contractors bidding on the new school at $38.6 million. One company alone spent $500,000 preparing a bid on the project the government knew was going to come in overbudget.

Why did the Premier instruct officials to use a lower number, a number it already knew was unrealistic?

Hon. Mr. Pasloski:     I have articulated the answer to this question twice already. Perhaps the Member for Klondike wasn’t listening. In May of 2012, Management Board did approve a construction budget for F.H. Collins of $38.6 million. We then received two independent estimates that confirmed our number was right. In fact, both of those estimates came in below the amount that we budgeted for that project.

On November 7 the tender was issued for the construction, and 41 days later, on December 18, a third estimate was received. That estimate was not reviewed by Management Board. The tenders were opened at the deadline — at the closure of the tender period — and at that point we found out that the lowest bid was almost $10 million above our budget, Mr. Speaker. As I have said many times, this government is responsible for the taxpayers’ money and we wisely made the decision to relook at this project. This project has now gone out to tender again and we’re looking forward to the construction of a beautiful new high school in this community for the students, for the parents, for the teachers and for the administrators.

Mr. Silver:   I guess the Premier has been asked this question many a time, but he offers nothing but briefing notes. It wasn’t that long ago that the Premier was out in front of F.H. Collins with his golden shovel in hand and now he doesn’t want to talk about it anymore.

The government knew that this project was going to cost more than $38.6 million before the tender closed. Unfortunately, it didn’t let contractors know about this inside information. It also instructed officials to judge the bids against the low-balled number. There are many words to describe what the government did in this case, and being fiscally responsible is not among them. Many of these words are also unparliamentary, Mr. Speaker.

Companies that put in money, time and effort to prepare the bids did so in good faith. Unfortunately the government already knew that it was going to reject these bids.

What does the Premier have to say to the companies that wasted their time and money preparing a tender that the government had no intention of awarding?

Hon. Mr. Pasloski:     In May of 2012, Management Board approved the construction budget for F.H. Collins school of $38.6 million. Subsequent to that, we received estimates done independently by professional estimators, who both came in with estimates below our construction budget approved by the Management Board.

We then issued the tender in November. Forty-one days after the tender had been issued, we received a third estimate. When the tender was closed — the deadline — and we opened up all the tenders, we found that the low bid was almost $10 million more than what we had budgeted.

I also said that if it had come mildly above our budget with the addition of the geothermal and with the addition of the temporary gym, I’m sure that the Minister of Education would have considered bringing it back to Management Board. The bottom line is that this project came in almost $10 million overbudget before we even turned a spade.

We will build a school, we will build it with financial prudence and we will build something that will be the pride of all Yukoners.

Mr. Silver:   Let’s recap what we know about this government’s fiscally responsible approach to the building of F.H. Collins: (1) Before the last election, the Premier had a ground-breaking ceremony and promised a new school that would be completed in August of 2013; (2) $5.5 million was spent on a design and site work that will now have to be redone — that money is lost; (3) the former Minister of Education told Yukoners that the new design was free and then turned around and handed a $900,000 contract without competition to a company from Alberta to redesign the school; and (4) the government withheld from the public and contractors estimates that told them that the school could not be built for $38.6 million.

Why did the government withhold the true cost of the building estimates from the contractors? Why didn’t they at least negotiate with the low bidder, who did come within 10 percent of the government’s best estimate?

Hon. Mr. Pasloski:     I guess the only way we can answer that question is that the member is wrong, the member is wrong, the member is wrong. As I have articulated and repeated many times just today, we had an approved construction budget in May 2012 that was confirmed by two independent professional estimators, who came in with budget numbers — or with estimates — that were lower than our construction budget. We went to tender after that, and 41 days later we received a third estimate that was higher because of the acknowledgement of the geotechnical work and the temporary gym.

I guess what we’re hearing from the Member for Klondike really fits in with what he told us in this House almost a year ago to the day. I will quote: “There are many different parts of the truth. I’m merely presenting my version of what Klondikers and Yukoners believe to be the truth ...”