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Les Leyne: Legislature’s granddad lashes out at liquor branch’s missteps

The title of the report is eye-glazingly boring, and it’s several months old. But it continues to fascinate certain quarters of the legislature. And it prompted one of the more vigorous tongue-lashings ever delivered in a legislature committee.
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MLA Ralph Sultan: Report on Liquor Distribution Branch contracts Òis about the most damning report I think IÕve ever seen.Ó

The title of the report is eye-glazingly boring, and it’s several months old.

But it continues to fascinate certain quarters of the legislature. And it prompted one of the more vigorous tongue-lashings ever delivered in a legislature committee.

“An Audit of B.C. Liquor Distribution Branch Directly-Awarded Contracts” was completed by the auditor general and released publicly last summer. It got a brief burst of attention — one-day coverage in the media.

But when it arrived at the legislature public accounts committee two weeks ago, it became clear MLAs were still interested in the findings.

The audit appears to have started after a whistleblower told the independent office about the inordinate number of directly awarded contracts the Liquor Distribution Branch was signing. Auditors counted 74 contracts the branch made over a two-year period, and found a dismal rate of compliance with the rules.

Public agencies are supposed to solicit competitive bids in most cases. Direct awards have to meet specified conditions and the reasons for issuing them have to be included in the contract.

The audit found millions of dollars worth of contracts were awarded without citing any justification for not going to tender.

More than half did not demonstrate any exceptional circumstances. Almost three-quarters didn’t meet the requirement of showing they were impartial and non-preferential awards.

One small example: The Liquor Distribution Branch needed promotional swag for its annual staff appreciation day. But it didn’t have enough time to go to tender. So it justified a $57,000 contract by declaring it an “emergency.” The auditor general noted: “When an event is annual, it is predictable.”

So there was no emergency.

In another case, an $8.5-million contract for software and support was awarded by open bid. But later on, it was hiked to $14.2 million with no rationale, analysis or justification on file.

Maybe that’s a good deal, but there’s no way of telling, because there’s no explanation of the value for money, and no proof on file the supplier was the only source available.

The Liquor Distribution Branch had a ready response to the findings. It said it was already examining procurement policies, and a lot of the contracts did have the required justifications, they just weren’t included in the files. It said a big retraining effort was underway and all the auditor general’s recommendations would be followed up on.

That’s where it sat until two weeks ago, when the public accounts committee met to consider it.

Differences of opinion on accounting principles there are usually expressed in genteel terms.

But octogenarian Liberal MLA Ralph Sultan was in a rip-snorting mood and ignored the protocol.

Addressing Liquor Distribution Branch CEO Blain Lawson directly, he said: “I’ve sat on this committee for many, many years. This is about the most damning report I think I’ve ever seen.

“It does not reflect well on your performance of your duties. I think it’s an embarrassment.”

Sultan said there’s always a temptation and opportunity for “connivance” in purchasing offices, and when there’s no competitive bidding, the possibilities grow.

He asked Lawson directly: “Were you unaware of these policies?”

Lawson acknowledged he didn’t spend enough time drilling into it, but said there was a lot on his plate, with cannabis legalization taking shape over that period.

“There has to be trust within the organization that people are performing what we’ve hired them to do. In some instances, as is related here, it just didn’t occur.

“The accountability for that lies on me. So yeah, I’m embarrassed to be sitting here.”

Sultan responded curtly: “Well, you should be.”

He closed with a hope that there’s follow-up to see “whether you’ve discovered the virtues of competitive bidding.”

Lawson said later the Liquor Distribution Branch has done only one direct award since the audit, and the count is now on the agenda for senior staff’s weekly meeting.

“We don’t want to be back here. No offence.”

The beat-down was over by that point, and considered successful.

Sultan’s gentlemanly, grandfatherly presence has added something special to the legislature for years.

He enjoyed another wave of goodwill recently when he announced he is retiring. But he’s still got time to serve, so don’t tick him off when he’s scrutinizing public spending.