Ottawa’s news media (and the city’s major hospital) have been consumed with a construction procurement scandal. The allegations in a civil lawsuit include assertions of serious kickbacks for favored contractors and suppliers by former long-term hospital administrators, tied in with travel rewards, gifts, and employment of one of the administrator’s children at the hospital vendors’ businesses. There’s also hints of extortion, in which one of the administrators being sued was allegedly coerced to sign off on invoices for non-existent work to avoid exposing under-the-table work done at his home.
None of the allegations have yet been proven in court and while the hospital says it has referred the matter to police, criminal charges haven’t been laid.
As I read through the statement of claim and the media publicity, I’m reminded that many?of the problems here relate to legitimate client relationship practices taken too far. When you dig into the files, you see images of fishing trips where some of the parties to the litigation show up in the same references as contractors not named in the lawsuit and presumably not subject to any negative scrutiny. (The contractors’ representatives could have paid their own way?100 per cent, without supporting or covering any costs of travel related to the owners’ representatives — and without knowledge of the alleged kickbacks or benefits by other suppliers.)
If you take out all the human element of good-will generosity, communication, and occasional entertainment, we lose the soft touch of legitimate relationship and trust-building and try to force everything into a numbers game where “low price wins the job” and quality or other subjective criteria carry no weight.
I’m reminded of a contractor for a U.S.-based hospital (unrelated to the current scandal) who described how his relationship with hospital administrators is so strong that they routinely work with him so he can set the “low bid” and process pre-arranged change-orders. This was good business, he said, because the hospital always knew it would receive the quality and reliability it expected, and it avoided the stress of dealing with sloppy or unqualified contractors. Fair enough. But it seems this sort of manipulation is at the core of the current scandal here.
Where are the boundaries between solid relationship development, client reward and incentive programs, and ethical and perhaps legal violations that result in civil actions, possible criminal charges, and destroyed reputations?