AB NDP Gives 500m sole source road maintenance contract to BC company

[HiTempguy1]

https://nationalpost.com/pmn/news-pm...lving-b-c-firm

What a pile of bullshit

[rage2]

As much as I like to bash the NDP...

Carillion holds maintenance contracts that run until 2022 or 2023. Carillion goes bankrupt, PWC managing bankruptcy, sells it off to Emcon in BC. Alberta companies bitch about it because there was no bid, but if anything that would be PWC's problem would it not?

[HiTempguy1]

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As much as I like to bash the NDP...

Carillion holds maintenance contracts that run until 2022 or 2023. Carillion goes bankrupt, PWC managing bankruptcy, sells it off to Emcon in BC.

Now, I'm not a corporate contracts lawyer, you might have had some dealings with such things, so you are telling me that when a company goes bankrupt, the contracts are an asset that can be sold, and the individual who signed the initial contract gets no say?

Surely you jest, as the government regardless of any of that would still have to sign off on the deal I would think.

[Buster]

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Now, I'm not a corporate contracts lawyer, you might have had some dealings with such things, so you are telling me that when a company goes bankrupt, the contracts are an asset that can be sold, and the individual who signed the initial contract gets no say?

Surely you jest, as the government regardless of any of that would still have to sign off on the deal I would think.

Contracts typically have clauses which discuss assignment rights.

[Masked Bandit]

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Now, I'm not a corporate contracts lawyer, you might have had some dealings with such things, so you are telling me that when a company goes bankrupt, the contracts are an asset that can be sold, and the individual who signed the initial contract gets no say?

That sounds about right.

[ExtraSlow]

They may have to "sign off" on the deal but they probably can't cancel it outright and retender.

[HiTempguy1]

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Contracts typically have clauses which discuss assignment rights.

I was being a bit facetious, as you may have noticed by the part you didn't quote.

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They may have to "sign off" on the deal but they probably can't cancel it outright and retender.

It's the government. They can (virtually do) whatever they want with contracts, as has been shown in multiple situations in Alberta and Ontario the past 3 odd years. They shut down some friggin power plants and cost Albertans how many untold billions of dollars. I'd rather see the $500mil stay in Alberta, or at least be tendered as such.

Clearly some of the article wasn't read by you guys:

The association said it wants answers to reports that not only is the province giving the contracts to Emcon, it is making the deal more lucrative.

I have no real problem with the contract being sold to a BC company (normally). However, this isn't normal times, and the contract clearly has conditions that allow it to be sold to others. It should be put through a bidding process, especially if there is a need to be giving more money supposedly.

[rage2]

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Now, I'm not a corporate contracts lawyer, you might have had some dealings with such things, so you are telling me that when a company goes bankrupt, the contracts are an asset that can be sold, and the individual who signed the initial contract gets no say?

That's correct. Think of it this way. You sign a contract to finance a Tesla through Tesla, and Tesla goes bankrupt before your finance contract is up. Do you all of a sudden not have to make payments on the car? No, it continues till the end of the contract, the contract becomes a security which gets resold to the highest bidder to pay off creditors. You have no say who ends up owning that finance contract.

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I have no real problem with the contract being sold to a BC company (normally). However, this isn't normal times, and the contract clearly has conditions that allow it to be sold to others. It should be put through a bidding process, especially if there is a need to be giving more money supposedly.

I agree, PWC acting in the best interests of shareholders of Carillion should be going after top dollar. I don't know if bid process is the best way to do it, or if they did approach multiple parties trying to get top dollar, and AB companies offered the least. Who knows, but it's not a NDP problem.

[Sugarphreak]

...

[J-hop]

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This company has nothing to do with the pipeline, or the BC government currently in power. There isn't anything to be gained by just becoming all out anti-BC.

At the end of the day, whatever company can offer reliable service at a good value point should be used. Doesn't matter if they are from Albert, BC, or even the US. In fact, getting a company from another province will force them to setup support operations in Alberta anyway.

Plus the albertan companies couldn’t compete in the original bid so why would they be able to compete now? Tendering bids is an expensive wasteful process (in this case), not something people should be expecting pwc to do.

I haven’t looked into Emcon but Carillion wasn’t even based out of Canada yet I didn’t see people throwing constant fits that a foreign company was handling our road maitenance. Not sure what changed??

[JDMMAN]

As a PSCM professional, sole sourcing is something that has a time and place. That said, it's possible that the contract between AB and Carillion which was bought by Emcon was likely still providing the best value to AB especially if their contracted prices were firmed up during the recession.

The question that's better to ask is whether or not the sub contracts utilized by the GC are local (AB based) companies or not. Generally speaking, at least in private industry, sustainable business practices and local content is a fairly large component in the original tender evaluation. As such, it's quite possible that a majority of the equipment and labour required for the road contracts are still based out of AB.

[suntan]

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That's correct. Think of it this way. You sign a contract to finance a Tesla through Tesla, and Tesla goes bankrupt before your finance contract is up. Do you all of a sudden not have to make payments on the car? No, it continues till the end of the contract, the contract becomes a security which gets resold to the highest bidder to pay off creditors. You have no say who ends up owning that finance contract.

I'm not sure Carillion was securitizing their contracts. American mortgages are securitized because having a 25-year loan at 3% sucks for the lender.

[rage2]

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I'm not sure Carillion was securitizing their contracts. American mortgages are securitized because having a 25-year loan at 3% sucks for the lender.

I doubt they are, I just wanted to make a dig at Tesla for HiTemp there haha.