Why This Audit Matters
Given the significant amount spent on construction contracts, they can be a prime target for corruption and collusion activities. City staff need to be vigilant in monitoring and detecting unusual bid patterns. The audit identified several red flags of potential bid rigging by certain contractors in paving contracts and highlighted the risk of conflict of interest between contractors and City employees.
By The Numbers
- $2 million per year in paving contract costs can be saved by addressing unbalanced bidding
- Inflated prices by Contractor A cost the City an additional $2.5 million in contract costs over 5 years
- Contractor A dominated one district by winning 92 per cent of the contracts it bid
- 6 audit recommendations to help mitigate the City’s risk exposure to bid rigging by certain contractors
What We Found
Proper monitoring and management controls were not in place to ensure a competitive tendering environment. Red flags identified should raise concerns about the potential for bid rigging by certain contractors.
The City of Toronto awards public contracts worth over $1 billion annually for construction of vital infrastructure including bridges, roads, and water supply. Between 2010 and 2015, the Transportation Services Division spent on average over $100 million annually on road repair and maintenance contracts.