Dawson’s $25M sewage contract vindicated

The Yukon government was right to give Vancouver-based Corix Water Systems a $25-million contract to build Dawson City's sewage treatment plant, the territory's bid-challenge committee has concluded.

The Yukon government was right to give Vancouver-based Corix Water Systems a $25-million contract to build Dawson City’s sewage treatment plant, the territory’s bid-challenge committee has concluded.

The committee was asked to look into the tendering process after Whitehorse-based Ketza Construction made a stink over the rejection of its $16.5-million bid last April. The bid was rejected on technical grounds.

There were many mistakes in the bid evaluation, said Ketza’s president Peter Densmore, who, at the time, outlined the perceived goofs in a 15-page letter.

He claimed he was penalized for, among other things, promising to finish the project on time.

He accused the territory’s technical consultant of “professional misconduct.”

And he derided Corix’s proposal as a “white elephant” in the making.

Ketza’s subcontractors chimed in. Some complained the work ought to go to Yukoners, rather than Outside contractors.

Another, Dan Huras of Calgary’s Sapphire Group, wrote an angry letter to federal Transport Minister John Baird.

But the bid challenge committee found little evidence to support Densmore’s claims.

“Ketza Construction was not deliberately treated unfairly and no obvious bias existed against it,” the committee’s report states. “The government accepted the better proposal.”

Densmore is now uncharacteristically quiet. Over the past month he’s been asked repeatedly to comment on the committee’s conclusions.

Several phone messages for him have gone unreturned. The three times he answered his phone, he brushed the Yukon News off, saying he was too busy to talk and making unfulfilled promises to return the call.

“I’ll call you right back,” he said yesterday afternoon. As of deadline this morning, he had not.

Ketza’s bid received a failing grade of 45 per cent. The bid challenge committee concluded “the awarded points gap spread between Ketza Construction and Corix Water Systems appeared reasonable.”

That’s not to say the tendering process was free of confusion or mistakes.

Perhaps most damningly, the committee judged the contract’s evaluation team – made up of representatives from the Yukon government and town of Dawson -“appeared to lack the necessary depth of technical expertise.”

As well, “there was the appearance that the evaluation committee relied too heavily on only a single technical advisor,” and “there should have been more ‘voting’ evaluators with a technical background specific to the project.”

To fix this, the committee recommended in the future “all, or at least most, of the ‘voting’ members of evaluation committees have a level of expertise consistent with the nature and complexity” of the project.

The committee also recommended the detailed scoring systems used to evaluate bids be released when a request for proposals is made.

But Jeff O’Farrell, deputy minister of Community Services, disagreed with most of these suggestions.

“There is significant support in the professional procurement community for both the use of technical advisors as non-voting members of evaluation committees, and for not disclosing detailed scoring breakdowns in solicitation documents,” he wrote in response to the committee’s report.

“I also note that, in this particular instance, the complainant did not believe the level of information provided concerning the breakdown of scoring was an issue.”

The committee identified one gaff made by the evaluation committee, having to do with the instructions it gave to bidders to separate technical and financial information.

This is because the contract was value-driven. This means the technical merits of each proposal were judged before their cost estimates. So technical information went into one envelope and cost-related material went into another.

In Ketza’s case, their cost envelope was never opened because they flunked the technical evaluation, so the $9 million price difference between bids was never considered.

But the committee questioned why bidders were instructed to include a detailed equipment list in their cost-related envelope. This prevented Ketza’s detailed equipment list from being considered.

But Ketza’s bid would still have failed, even if its equipment list received top marks, noted O’Farrell.

He calls the equipment list a “very minor” part of the proposal. Its placement in the second envelope is “the only possible example of something being missed,” he wrote.

The committee also suggested that Ketza be paid $26,538 for its troubles, in light of the confusions that occurred. But O’Farrell made it clear in his letter that this won’t happen.

The territory’s contracting regulations won’t let him, he said.

Complaints need to be valid for a payment to be made. But the bid challenge committee never found evidence to support Densmore’s claim that he was treated unfairly, said O’Farrell.

And none of the committee’s own objections “had any bearing on the outcome,” he wrote.

O’Farrell also warned that awarding money to Ketza would set a dangerous precedent that “could cause significant uncertainty and liability in future contracts.”

The bid-challenge committee is made up of members appointed by the territorial government and Yukon’s business community. It doesn’t have the power to overturn the awarding of a contract. Its job is simply to review a case when a complaint is made and make recommendations.

Three members of the committee formed a panel that examined Ketza’s complaint. The panel was screened to ensure none of its members would be in a perceived conflict of interest.

The report was produced by the committee November 3. The report’s conclusions were released by the territorial government this week, accompanied by the government’s response.

Most of the report’s body was withheld by the territory. It states it did so to avoid disclosing Ketza’s proprietary information.

Contact John Thompson at


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Dawson the dog sits next to the Chariot Patrick Jackson has loaded and rigged up to walk the Dempster Highway from where it begins, off the North Klondike Highway, to the Arctic Circle. (Submitted)
Walking the Dempster

Patrick Jackson gets set for 405-kilometre journey

Liberal leader Sandy Silver speaks outside his campaign headquarters in Dawson City following early poll results on April 12. (Robin Sharp/Yukon News)
BREAKING: Minority government results will wait on tie vote in Vuntut Gwitchin

The Yukon Party and the Liberal Party currently have secured the same amount of seats

Yukonomist Keith Halliday
YUKONOMIST: The Neapolitan election

Do you remember those old bricks of Neapolitan ice cream from birthday… Continue reading

Chief Medical Officer of Health Dr. Brendan Hanley. (Crystal Schick/Yukon News)
Exposure notice issued for April 3 Air North flight

Yukon Chief Medical Officer of Health Dr. Brendan Hanley has issued another… Continue reading

Crystal Schick/Yukon News file
Runners in the Yukon Arctic Ultra marathon race down the Yukon River near the Marwell industrial area in Whitehorse on Feb. 3, 2019.
Cold-weather exercise hard on the lungs

Amy Kenny Special to the Yukon News It might make you feel… Continue reading

Today’s Mailbox: Rent freezes and the youth vote

Dear Editor, I read the article regarding the recommendations by the Yukon… Continue reading

Point-in-Time homeless count planned this month

Volunteers will count those in shelters, short-term housing and without shelter in a 24-hour period.

The Yukon’s new ATIPP Act came into effect on April 1. Yukoners can submit ATIPP requests online or at the Legislative Assembly building. (Gabrielle Plonka/Yukon News file)
New ATIPP Act in effect as of April 1

The changes promise increased government transparency

A new conservancy in northern B.C. is adjacent to Mount Edziza Provincial Park. (Courtesy BC Parks)
Ice Mountain Lands near Telegraph Creek, B.C., granted conservancy protection

The conservancy is the first step in a multi-year Tahltan Stewardship Initiative

Yukon RCMP reported a child pornography-related arrest on April 1. (Phil McLachlan/Black Press file)
Whitehorse man arrested on child pornography charges

The 43-year-old was charged with possession of child pornography and making child pornography

Team Yukon athletes wave flags at the 2012 Arctic Winter Games opening ceremony in Whitehorse. The postponed 2022 event in Wood Buffalo, Alta., has been rescheduled for Jan. 29 to Feb. 4, 2023. (Justin Kennedy/Yukon News file)
New dates set for Arctic Winter Games

Wood Buffalo, Alta. will host event Jan. 29 to Feb. 4, 2023

Victoria Gold Corp. has contributed $1 million to the First Nation of Na-cho Nyak Dun after six months of production at the Eagle Gold Mine. (Submitted/Victoria Gold Corp.)
Victoria Gold contributes $1 million to First Nation of Na-cho Nyak Dun

Victoria Gold signed a Comprehensive Cooperation and Benefits Agreement in 2011

Most Read