Documents raise more questions about SNC-Lavalin bid

In the year since CBC reported that SNC-Lavalin won the $1.6-billion contract for the Trillium Line extension into Riverside South even though it failed to score the minimum 70 per cent on the technical evaluation, councillors and the public have been demanding to know more about how that decision came about.

On Monday, in an effort to quell the controversy, the city released hundreds of pages of previously classified documents.

The unprecedented document release certainly provides more details on the two-year-long procedures for choosing the winning proponent for Stage 2 of the north-south Trillium Line.

But when it comes to the controversial decision to allow SNC-Lavalin to continue in the bidding despite twice failing to meet the technical threshold, the documents raise more questions than they answer.

Here are four.

1. If the evaluation process left the city open to lawsuits, isn't that on Norton Rose Fulbright?

Ottawa's top executives used discretionary power that no one, including councillors, knew existed to allow SNC-Lavalin to continue in the bidding process after the technical stage.

Back in August, city manager Steve Kanellakos said the city received a legal opinion from its external legal firm, Norton Rose Fulbright, advising that if it didn't allow SNC-Lavalin to continue on in the process after missing the technical bar, the city could open itself up to legal action from the company.

Late Monday, the city released that legal opinion. 

On Oct. 23, 2018, Norton Rose Fulbright lawyers wrote two memos: one outlined how the city could exercise its discretionary power; the second described the legal risks of not allowing SNC-Lavalin to continue in the process.

The second memo, which was never actually sent, but only shared verbally with the executive team, argued "there is a lack of clarity to the grading and scoring chart in the Trillium Evaluation Framework."

The memo went on to warn that "if a proponent could show that the evaluation and score which led to its proposal not continuing in the evaluation process was flawed, then there is a strong likelihood that a court would at the very least award significant damages."

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But if the procurement process used in awarding the Trillium Line Stage 2 contract was flawed, isn't that on Norton Rose Fulbright?

According to a March 2019 email from the city, Norton Rose Fulbright has "performed the role of the overall procuring authority as well as providing legal advice. This includes preparing the procurement documents, processes and protocols and leading the meetings with the proponents."

As taxpayers, we've shelled out more than $6 million to the international law firm since February 2016.

But somehow it built a process so vulnerable that it left the city open to legal challenges if it didn't wave through a bidder that fails to score the minimum technical grade?

2.  How was SNC-Lavalin 'conformant'?

All bids were reviewed to determine whether they were "conformant" to what the request for proposal (RFP) called for, and were assessed for any "material deviations."

One document released Monday described a material deviation as a situation where "some crucial piece of information is missing or provided on the basis of a fundamental error, without which the Project could not be completed in accordance with the RFP requirements."

If a bid is found to have a material deviation, it's thrown out of the bidding process.

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SNC-Lavalin's bid was not found to have any material deviations; however, we knew that the city's technical evaluators found what they believed were serious flaws.

Those included that the Uplands station had a single platform for one direction of train travel, and that designs for the Bowesville and Leitrim stations didn't include stairs or elevators.

The proposal also didn't have a plan to incorporate the existing Alstom LINT trains into the expanded Trillium Line, had no plan for snow removal and was missing a signalling and train control system. 

The company also included details for an electric train system, when the Trillium Line is diesel.

3. How objective was this advice?

The RFP absolutely gives the city the sole discretion to allow a bidder that scores below 70 per cent score to keep going in the procurement process.

It says so right there in Sec. 6.5.2(4) of the RFP, if you'd like to look it up. Or you can see it bold face in the legal memo drawn up by Norton Rose Fulbright. But both the memo and RFP also say the city has the right to toss the bid out.

Indeed, in all the discussions in various documents about how whether SNC-Lavalin should be allowed to stay in the process, the advice appears to skew toward yes.

For example, the legal memo quotes a paragraph in the evaluation framework that says any proponent found to be "conformant ... has attained a presumptive design score of 70%."

But the legal memo does not mention the very next paragraph in the framework that clearly states that "evaluators should note that a minimum score of at least seventy percent (70%) of available points must be achieved." A failure to do so could "prevent the Proposal from being considered further."

Or consider the minutes of the Oct. 3, 2018, meeting of the bid evaluation steering committee (BESC), which included Norton Rose Fulbright lawyer Geoffrey Gilbert, Deloitte financial expert Remo Bucci and Simon Dupuis, a procurement officer at the city.

The BESC had just found out about SNC-Lavalin's failing grade, and had unanimously agreed the company should not go on. But the minutes show the committee believed that if "the submission meets the RFP requirements, then there is a strong rationale for the proponent to get a passing grade."

It contended that if a bidder was approved in the request for qualifications — a vetting process that comes before the RFP — "then how can they fail? They should not," according to the minutes.

But the procurement documents are explicit: clearing an earlier hurdle in the process does not give a bidder an automatic pass later on. The RFP states the city's discretion in determining "disqualification" of a bidder "is not limited or restricted in any way by the fact that a prequalification process preceded this RFP Process." 

According to another section, even if a proposal contains no material deviations, a bidder "shall not be automatically presumed to pass any applicable minimum scoring threshold."

4. Did a Norton Rose Fulbright lawyer who worked for SNC-Lavalin give advice on waiving SNC-Lavalin's bad score?

It sure seems that way.

Norton Rose Fulbright is a giant law firm that routinely represents the Montreal-based engineering giant in deals worth many billions of dollars. 

We've been told that everyone in this process passed city fairness commissioner Oliver Grant's conflict of interest screening and that the law firm didn't represent SNC-Lavalin in the city's procurement process; it worked for the city. 

For its part, the city says it was aware of Norton Rose Fulbright's relationship with SNC-Lavalin, and waived any conflict of interest concerns.

However, it's worth noting that the firm's lawyer, Stephen Nattrass, has personally worked on SNC-Lavalin files recently, and represented the city in the procurement that was eventually awarded to the beleaguered company.

Nattrass was one of the three Norton Rose Fulbright lawyers who wrote the legal opinions in October 2018 that led to the city waiving SNC-Lavalin's poor technical score.

About this time last year, the newspaper Le Droit reported that Nattrass was on the legal team representing SNC-Lavalin in a criminal case.

In 2014, Nattass was on SNC-Lavalin's legal team that oversaw the company's sale of AltaLink, a deal worth $7.2 billion. 

The Trillium Line Stage 2 procurement documents will be discussed at the finance and economic development committee on Monday.