Some federal suppliers are deliberately underbidding on government contracts to secure work and then driving up prices through costly revisions, according to Canada’s procurement watchdog.Blacklock's Reporter says Procurement Ombudsman Alexander Jeglic told MPs that certain contractors have mastered a “bid low, let it grow” tactic — taking advantage of vague or poorly written government tenders to expand the value of their contracts after the fact.“The issue is that certain suppliers understand the procurement system and are actively seeking out issues in Statements of Work they know can result in change orders,” Jeglic wrote in a report to the Commons government operations committee. “The methodology is to bid low to win the contract and then exploit inconsistencies to grow the value of the contract beyond what was intended.”Jeglic said federal departments are partly to blame for allowing the problem to persist. .“The government fosters such activities by not properly defining a Statement of Work that accurately reflects site conditions,” he said. “By failing to clearly describe what is being bought, the government also jeopardizes the expected outcomes of projects.”While the full extent of the problem remains unclear, Jeglic warned it could represent a serious risk to taxpayers. Public Works — the department that handles most federal contracts — oversees roughly $25 billion in spending each year..Jeglic has repeatedly criticized Ottawa’s contracting system as inefficient and outdated. “The Canadian system is kind of near the bottom tier,” he told senators last year, calling procurement irregularities “a symptom of a broken system.”“The system has not improved during my tenure,” said Jeglic, who is now in his seventh year as ombudsman. “It’s time to replace the car, not keep applying Band-Aids.”
