By opening negotiations with a local car dealer on a signed contract, Premier Dennis Fentie broke government tendering rules, say opposition politicians.
“This is a clear-cut case of the Yukon Party playing political favourites and short-circuiting due process,” said Liberal MLA Gary McRobb.
“It’s political interference and it shouldn’t be happening,” added NDP leader Todd Hardy.
The affair began last September when the Yukon government ordered 11 new vehicles from Metro Chrysler.
The contract stipulated the vehicles were due by December 29th.
But the full order didn’t arrive until mid-February.
As stated in the contract, the government charged Metro Chrysler $11,103 in fines.
Metro Chrysler balked.
The dealership complained to Fentie.
Fentie referred the issue to Highways Minister Archie Lang.
“I addressed the issue,” said Lang during question period on Monday.
Metro Chrysler’s fine was cut in half.
The company paid $5,590 to the government.
It was a standard contract, said Hardy.
“Other companies have signed this type of contract and when they’ve been late in delivering the product they’ve had to pay a penalty on that.”
Metro’s $5,590 fine was not the actual cost to the taxpayer, as outlined in the contract, wrote an internal government source who exposed the Metro Chrysler issue.
Yukon taxpayers are on the hook for the reduction, approximately $5,513, wrote the source.
Other vendors hit with similar penalties haven’t challenged their contracts, the source added.
Over the past few years, the government has collected $95,000 in damages, wrote the source.
Historically, every other business paid the penalties, said Hardy.
“But this one business talked to the premier personally and the premier obviously directed the minister of Highways and his department to work out a new deal with this company.”
It is illegal and unethical to change the terms of a contract as a result of a vendor complaining to the premier, wrote the source.
Fentie was just the messenger, said Lang during question period on Tuesday.
“He was accosted.
“This was brought forward when he was in downtown Whitehorse. There was a concern — he gave the concern to me as the minister of Highways and Public Works, and I addressed it.”
That’s not how government is supposed to operate, said McRobb.
It’s unfair to other businesses, he said.
“I can assure you there are many companies out there who would love to know if they can have contracts altered with the government just by making a call to Fentie,” added Hardy.
“The premier should have said, ‘I cannot interfere at this level — if you have a problem, take it to the department.’”
During an October 30th Highways meeting, departmental officials “were advised by the deputy minister to negotiate reduced liquidated damages with Metro Chrysler,” wrote a source who attended the meeting.
“The deputy minister asked for written direction from executive council, but was verbally told just to get rid of the issue,” wrote the source.
The source was told, “you will have discussions with Metro and look to reducing the amount they will be charged.
“I said I believed this was illegal as a breech of contract and was also unethical,” wrote the source.
It is damaging to the credibility of the public servants, said Hardy.
And it calls attention to the need for whistleblower legislation, he added.
“The person that has brought forward this information could be subject to some sort of repercussions whether he works for government or not.
“But government better not go after this person for doing what’s ethically right.”
Changing contracts on the fly is damaging to relations with contractors, added Hardy.
Lang’s department is responsible for contracting rules for all government purchases, from pencils to property, he said during Tuesday’s question period.
“But the minister has said those rules are out the window — we can renegotiate anything, no matter what we sign.
“If you don’t like the rules, call the premier — talk to the minister in the grocery store — he’ll fix it for you.
“Let’s all line up at the premier’s door and renegotiate every agreement we sign as soon as we sign it.”
What does Lang plan to tell other local car dealers who bid on this $250,000 contract and weren’t successful? said Hardy.
“Are they expected to believe this is business as usual?
“Is this the way it’s going to be done from now on in the Yukon?”
This isn’t unusual, said Lang during Monday’s question period.
“Lang stands up and says, ‘Hey, no problem, we can handle it — this happens all the time,’” said McRobb.
“And that raises all kinds of other questions. We would like to know what other cases are being resolved from the Yukon Party’s offices instead of going through due processes.”
This sends an extremely serious message to all businesses signing government contracts, said Hardy.
“It indicates that every contract is open for negotiation after you sign it.
“They’ve really lowered the standard here.”
When Fentie came to the minister with Metro’s complaint, why didn’t Lang simply tell him he couldn’t get involved in that? said Hardy during Tuesday’s question period.
“Over and over, we’ve heard the ministers claim they don’t get involved in operational matters.
“Well, apparently they do.
“Why didn’t the minister tell the premier he wouldn’t interfere with a departmental decision at this level because it could put the integrity of the contracting process in doubt — which would not be good for any business in the Yukon?”
In the past, Metro Chrysler has never had trouble delivering vehicles on time, said owner Nathan Lam on Tuesday.
But last winter bad weather and the holiday season played a role in the hold up.
“We did the best we could, but Mother Nature wouldn’t co-operate,” Lam said.
“And $11,000 is a really heavy penalty.”
Lam did not contact the premier, he said.
But his manager, Rod Leisky, may have.
“From time to time, the premier comes to our dealership to service his vehicle,” said Lam.
“He drives our vehicles.
“So Rod may have talked to him or phoned him — I have no idea.”
Lam lives in Vancouver.
“I only come up here once a month,” he said.
Fentie seems to like the Metro Chrysler products, said Hardy.
“And the deal was cut there.
“I don’t know if there is a relationship between the dealer and Fentie. But let’s put everything on