On November 16, 2016, the Auditor General released her report on Road Infrastructure Construction Contract Awarding and Oversight. The report included seven recommendations to help the Ministry of Transportation improve its policies and processes.
The Ministry of Transportation has prepared a detailed Action Plan that includes nearly 50 steps we will take in response to the Auditor General's recommendations. Read the highlights below or:
- Read the full Action Plan
- Read Minister of Transportation Steven Del Duca's statement on the Action Plan
Auditor General Recommendation #1
To ensure that cracks on highways are minimized and that highways can remain problem-free for the duration of their expected life cycle the Ministry of Transportation should:
- Review the practice of paying incentives to contractors for providing asphalt that meet contract specifications.
- Assess whether contract amounts should be withheld when all contract specifications are not met.
Key actions for 2017
- Remove incentives related to asphalt properties and compaction
- Raise our minimum standards for asphalt smoothness
- Continue to penalize contractors whose work fails to meet minimum standards
For 2018 and beyond
- Conduct a formal review of our contract payment systems to identify opportunities for additional improvements
Auditor General Recommendation #2
To identify poor-quality asphalt before it is laid on highways, the Ministry of Transportation should immediately incorporate the Extended Aging test into its standard testing methodology for asphalt.
Key actions for 2017
- Incorporate the Extended Aging test in all contracts tendered after March 1
- Conduct more inspections and require contractors to provide certifications proving they are using high quality asphalt cement
- For relevant contracts, ban the use of certain materials that can reduce a road's lifespan
- Begin construction of the new Centre of Excellence for Transportation Infrastructure, a state-of-the-art facility for research and road material testing
For 2018 and beyond
- Research new testing processes that can be used to better predict asphalt pavement performance
Auditor General Recommendation #3
In developing internal policy, the Ministry of Transportation should ensure that decisions made are in the best interest of all Ontarians. In this regard, the Ministry should:
- Evaluate industry best practices on the collection of liquidated damages and determine whether to re-implement its original policy of collecting liquidated damages at the field level to be in line with industry best practices.
- Re-incorporate the provision for excluding highly litigious contractors from bidding on further contracts, and appropriately exercise it when needed.
- Pilot and fully assess the use of reviews of referee decisions as an alternative to escalating to litigation before this process is included into policy and procedures.
- Re-implement its original dispute-resolution process if it determines that the use of referees will not be incorporated into its policies and procedures.
- Ensure that whenever committees are established to review and make policy implementation decisions, that the committee members are not in a conflict of interest.
Key actions for 2017
- For all new contracts, begin charging interest on outstanding penalties (liquidated damages).
- Create a panel of third-party experts to advise the ministry on contract administration and provisions
- Conduct a formal review of the ministry's policy-setting processes, with a focus on engaging stakeholders in an open and transparent way and preventing conflicts of interest
- Conduct a formal review of the ministry's dispute resolution process to identify opportunities for improvement
For 2018 and beyond
- Implement recommendations from the reviews of the ministry's policy setting and dispute resolution processes
Auditor General Recommendation #4
To ensure that testing of asphalt quality is a constructive process and that information from whistleblowers is adequately investigated, the Ministry of Transportation should ensure that controls and appropriate processes over asphalt samples are in place to prevent the risk of sample switching;
Key actions for 2017
- The Ministry of Transportation will be responsible for the care, control and oversight of asphalt samples for all new contracts
- Create a fraud reporting tip-line so violations can be reported anonymously
- Fraud prevention training for ministry staff, as well as additional training for ministry and contractor staff to ensure samples are not compromised
For 2018 and beyond
- Evaluate the new sample delivery system to ensure new practices and procedures are working
Auditor General Recommendation #5
To ensure it obtains a high-level of assurance that infrastructure is safely built according to specifications, the Ministry of Transportation should hire or contract its own engineers who are independent from the contractors to perform verification activities.
Key actions for 2017
- Audit key projects to ensure that quality verification work meets ministry specifications
- Undertake a pilot project in which Ministry of Transportation staff will complete quality verification work instead of third-party engineers, starting with a minimum of 15 contracts across the province
For 2018 and beyond
- Conduct a formal review of the current quality verification process and implement changes to ensure inspectors are appropriately independent from contractors
Auditor General Recommendation #6
To ensure that contractors perform warranty work they are responsible for, the Ministry of Transportation should:
- Change its warranty provisions so that the burden of proof is not on the Ministry to show that no other factors could have caused cracks for poorly performing pavement and that the warranty is based on items that should have been foreseen; and
- Enforce its warranty provisions for costs to be borne by the contractor for all contracts with warranties.
Key actions for 2017
- Clearly define contractor requirements and standardize the way we administer and evaluate warranties across the province
For 2018 and beyond
- Use state-of-the-art technology to automatically and objectively evaluate pavement to better enforce warranty provisions.
Auditor General Recommendation #7
To ensure that poor-performing contractors and contractors that do not follow safety standards and other requirements are appropriately penalized for their performance or behaviour, the Ministry of Transportation should:
- Establish Appropriate Penalties For Contractors With Unsatisfactory Ratings
- Incorporate Stricter Rules Around Excluding Contractors From Bidding If They Breach Safety Regulations
- Establish Appropriate Penalties For Contractors That Report Inaccurate Financial Information To The Ministry
- Implement Policies And Processes To Exclude Smaller Contractors From Bidding In All Regions If Performance Issues Are Noted In One Or More Regions.
Key actions for 2017
- Change the current Contractor Performance Rating system to include more safeguards and harsher sanctions for underperforming contractors
- Conduct formal reviews to identify opportunities to better hold contractors responsible for the financial information they report and to prevent smaller contractors from bidding on contracts if they have underperformed in the past.
For 2018 and beyond
- Change the current contract tendering process to include the improvements identified in the reviews listed above
Action Plan
Checklist for Key Actions
| Topic | Key Actions for 2017 | Key Actions for 2018 and beyond |
|---|---|---|
| Incentives and penalties |
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| Testing Asphalt |
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| Policy development |
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| Asphalt sample collection |
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| Verification activities |
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| Warranties |
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| Poor-performing contractors |
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