$21 for a bag of concrete

The Department of National Defence (DND) is spending billions on submarines that don’t float, helicopters that have not been delivered, and, barring a sudden outbreak of common sense, fighter jets that we don’t need. But while big-ticket items such as these tend to get the headlines, smaller items are also important.

Like the fact that Defence Construction Canada (DCC), the Crown corporation that oversees construction work for DND, apparently spends $21 on $2.67 bags of concrete (“DND Charged $21.00 for a Bag of Concrete Worth $2.67, Contractor Says,” Defence Watch, Ottawa Citizen blog, 6 February 2012):

One contractor suggested looking into how some local suppliers have also tried to make money off DND/DCC. He emailed Defence Watch to recount how one of his employees, who used to be involved with DCC jobs “was shocked to see that ordinary Sakrete mix was $2.67 a bag for me” at a local hardware, “but $21.00 plus taxes for DCC.” The employee says he was sent to pick up the ready-mix concrete at a hardware store and “and honestly believed that is what contractors had to pay.”

In an over-funded department that has often shown a lack of transparency, there is a real danger that taxpayers’ money will be squandered.

The concrete story was revealed in a new report by the Union of National Defence Employees. The report alleges that private contractors have been over-charging and under-delivering on maintenance and construction contracts for Defence Construction Canada (“DND being ripped off by contractors, union alleges,” Ottawa Citizen, 5 February 2012):

“In another invoice, the same contractor charged DCC in June 2009 more than $2,800 for small tools and more than $5,000 to rent a scissor lift, a mechanical device that acts as an elevated work platform. The rental of the two lifts was for a six-day period.

But the union’s report also includes an invoice from months before when DND staff at the same site rented the same scissor lift from the same supplier for two weeks for just $1,170. The union also questions why taxpayers would be charged by the contractor for basic tools, as it is common practice for a company to come equipped to do a job.”

The union argues that contracts given by the DCC to the private sector lack adequate oversight.

Equally concerning is the allegation that DCC has become a “landing spot” for former Canadian Forces personnel who were in charge of giving work to DCC. The union alleges that upon retiring from the Canadian Forces, these personnel are often given high level positions at DCC (“Review of Defence Construction Canada,” Union of National Defence Employees, 7 February 2012):

In addition, the DND local staff, generally at the Warrant Officer or CEO level determines the amount of work DCC receives at the local level. There appears to be pattern where local DND officials are increasing the work load to DCC to ensure it is sustainable, then retiring only to return in senior position with DCC. There are at least 8 situations where this has happened and several others are being uncovered. Although this retiring/hiring scheme is not against any public service rules, one needs to question the conflict of interest situation that is arising and whether all decisions made to increase the workload of DCC is in the best interest of the Crown.

DND Photo

Tags: Canadian military spending, Defence Construction Canada, Department of National Defence, Military procurement, Union of National Defence Employees