Can "anti-collusion" be a smokescreen?

Posted 11.25.14

SHAWVILLE, QUEBEC | Recently here in west Quebec, the city of Gatineau announced a new bidding process for city contracts, explained as an "anti-collusion" tool. It seems simple -- if there are competing bidders, then there can be no collusion among them to allocate contracts. So all contracts must be competitive, all. This is more simplistic than simple.

Already, large city contracts are awarded by bids. This new regulation will require awarding even the smaller contacts via a bidding process. Previously the city could award small contracts to local businesses, based on the company's price, past history, performance, meeting specifications and deadlines, etc. The city did this then to bypass red tape, but mainly to help local businesses. Local companies pay taxes to Gatineau, hire local people, who also pay taxes, and buy supplies from local companies.

Will the city now buy a computer network, library books, or contract roadside weed removal, watering park plants, or even painting a bridge only on bids? Apparently.

Large contracts must be competitive. Most were, even though there may have been some price collusion by some of the bidders, without the city's knowledge. Now, the small change for most small contracts will be taken away from local shops and given to the large, often multinational, companies who can bid from their very deep pockets. They cut prices and take a loss -- in order to bring in greater profits once their small competitors are out of business. Local businesses can’t match this.

Universal bidding is not a new idea. It is not a testimony to transparency. Municipal governments have always tried to support their communities -– that's their raison d'etre! Small towns will pay a few bucks more to have their sick ash trees removed by a local contractor -- because this is good business for the community itself.

Gatineau's last administration was under heavy pressure to pass this same regulation. That administration refused, knowing this would murder local businesses and jobs. That administration insisted the city must be pro-small business.

Did the present administration study the entire context here? The federal government is pursuing free-trade contracts all around the world, now with China and Europe. "Free trade" isn't free at all, and is a subterfuge for "multinational business." Free trade treaties cover all government contracts. Chinese corporations could bid on any Gatineau contract up for tender. We could have German firms laying asphalt or taking care of our beaches and parks. No help to local suppliers, no creating local jobs -- and our administrators must then deal with contractors in New York, Bombay, or Beijing. Picture the phone calls.

Large corporations are using "anti-collusion" as a smoke screen to obscure their growing domination of our economy. Price-fixing is already a crime. Just use the legal system, as we already do. Why now kill local entrepreneurship and jobs?

The mayor and city council would be wise to take a second, more careful look at this measure. Local small contacts are the ultimate in "shopping at home" –- by the city. Don't we all want to live in a prosperous city?


Copyright © 2014 Fred Ryan/Log Cabin Chronicles/11.14