Infrastructure minister promises to stop companies ‘gaming the system’
The NWT’s infrastructure minister says her department will change the way procurement happens to make sure more northerners get work on projects.
Katrina Nokleby came under sustained pressure from MLAs on the issue as the legislature began examining the Department of Infrastructure’s proposed budget on Tuesday.
The territorial government has already promised to update procurement policies, but MLAs raised concerns that – in the words of Yellowknife North MLA Rylund Johnson – “shell, fake northern companies” are bidding on contracts, then handing much of the work to southerners.
Monfwi MLA Jackson Lafferty and Hay River South MLA Rocky Simpson made similar points. Kam Lake MLA Caitlin Cleveland asked: “Can we as a government … do a bit more project management to be able to maintain the employment actually in the Northwest Territories?”
“Definitely, that is the goal,” said Nokleby, “to not have it [be] a sort of shell company that gets a cut and then just gives everything to the south.”
The minister told Lafferty: “I do recognize that if we don’t change the language in our contracts, we’re just going to keep letting people game the system, which is what’s happening.
“That’s when you see the cutting of the cheque or, you know, the bait and switch of, ‘Oh, we’ve got these people,’ and then, “Oh, now we’ve got the contract, we’re going to hire these people.’
“All of those types of situations are things that I’m pretty aware of and alive to, and part of my motivation for getting into this seat in the first place.”
Department ‘set in its ways’
Nokleby made the remarks as an examination of her department’s budget turned into an opportunity for newly installed MLAs to explore the broader philosophy of NWT infrastructure spending.
Johnson characterized many companies winning construction contracts as “actually southern companies, and those true, kind-of northern construction firms are becoming rarer and rarer.”
He said: “I would really encourage the minister to get hold of all of the infrastructure policies and look at some little tweaks. Perhaps start doing that without this huge procurement review that is probably going to take us two years or three years.”
The NWT government’s mandate says work to review and improve procurement and contracting is scheduled to last until the fall of 2022.
Joe Dragon, the Department of Infrastructure’s deputy minister, said the department awarded 39 out of 45 contracts worth more than $500,000 to northern businesses, at a value of $78 million.
Dragon said the six remaining contracts were awarded to southern firms as no bids came in from northern companies.
“I have asked our procurement staff to make sure that I have regular reports on how many northern businesses are actually getting our contracts,” said Dragon.
MLAs, though, questioned whether those “northern businesses” were in fact giving all of the work to northerners once contracts were won.
“I understand that sometimes a lot of contracts are, yes, awarded to northern businesses, but the employment doesn’t necessarily stick behind,” said Cleveland, who asked how much work given to northern businesses was actually then passed on to northerners.
Nokleby said the department would commit to providing Cleveland with a dollar figure.
Both Nokleby, newly elected in October, and Dragon, appointed in November, are new arrivals at the Department of Infrastructure.
“I can tell you that there are times where I butt heads, where I am saying, ‘This has to change,’ and these are the conversations that Dr Dragon and I are having,” Nokleby told MLAs.
“Both of us being new to a department that is very set in its ways is actually a really good thing, I think.”
The NWT’s process of approving its budget has been delayed by several months as a result of the Covid-19 pandemic.
The legislature returned to session on Tuesday for the first time since mid-March, sitting into the evening to begin catching up on page-by-page reviews of each department’s budget.