Jan 30/08: BC Hydro Fires It's Fairness Commissioner... hmmmmmmmmm ...

Meet the fairness commissioner who was fired for trying to be fair.

Michael Asner is an expert at ensuring that multimillion-dollar contracts are awarded in a way that is fair to all bidders and entirely above board.

Fairness commissioners, as they are known, are a key element in the B.C. government's promise of open tendering on public sector contracts.

Asner is based in White Rock but does most of his work outside B.C. -- which may be a good thing, in light of how this story unfolds.

Last summer, he was retained by BC Hydro as fairness commissioner on a complex tendering process involving the redesign of all the giant Crown corporation's contracting work.

"Prepare a final report to senior management, providing details of the processes used and the degree of fairness attained on the project," was the key assignment.

But as Asner began his review, he discovered the process was well advanced. Contracts for the first two phases -- involving the design of the final phase -- had already been awarded to the accounting and consulting firm of Deloitte Touche.

Though Deloitte was thus "intimately" involved in the design of what was expected to be a multimillion-dollar final contract, Hydro had nevertheless advised the firm that it also would be permitted to bid on that contract.

Normally, firms involved in the design of a process are not allowed to bid. The practice is illegal in some jurisdictions and Hydro's own guidelines seemed to preclude it here in B.C.

Asner expressed his doubts verbally up front. But he also suggested ways to mitigate the concern and his draft reports gave the clear impression that Hydro had done so: "This is an acceptable resolution of this pre-existing situation."

However, as the fairness commissioner dug more deeply, he discovered that no attempt had been made to separate the Deloitte team working on the first two phases from the team that would be preparing the bid for the final phase.

The absence of a so-called "Chinese wall" meant that the people designing the final bidding process could also be working on the bid.

That problem could not be mitigated, as Asner now saw it. Accordingly, he advised Hydro that his final report would highlight a definite conflict of interest.

At which point, Asner was summoned to a meeting and asked to revert to his earlier view or simply drop the matter.

He refused. A week later, he got a letter from the Crown corporation.

"While we respect your right to change your view," it said, "Your lack of timely notice to Hydro is of concern."

Moreover: "Our view is that the measures used in this case were appropriate and resolved any conflict potential and that no unfairness in the process occurred."

The fairness commissioner was wrong. Moreover, he was fired: "We do not feel that any purpose is served or value added in continuing your engagement. Accordingly this letter is notice of termination."

Just to be on the safe side, Hydro also dumped him as fairness commissioner on its project to install smart meters in B.C. homes and workplaces.

According to that second letter of termination:

"Hydro is undertaking a review of its policies and practices relative to external fairness commissioners."

I'll bet they were reviewing their practices. And one would be forgiven for guessing that one of the objects was to make sure that Michael Asner never works in this province again.

Despite the rough treatment, Asner initially said nothing publicly. He'd signed a confidentiality agreement and regarded himself as bound by its terms.

But he did file an application under the provincial access to information law for copies of his original contract and related correspondence.

When those materials were delivered into the hands of my colleague Scott Simpson, the result was a telling headline in Tuesday's Vancouver Sun: "BC Hydro fires 'fairness' watchdog."

Hydro responded by insisting that it had met Asner's initial concerns and dumped him only after he changed his mind.

"There were some things I could have done better," Asner conceded. "But if I didn't exist, they'd still have a conflict."

He cites the conflict of interest clause in his own, now terminated contract: "If a contractor is engaged to prepare the scope of work or services for a contract upon which it intends to submit a bid, the contractor has a conflict of interest."

Hydro permitted Deloitte to handle the scope and services on the first two phases and then allowed it to bid on the final phase. Thus Hydro, not Deloitte, created the problem.

Asner, although he could have pressed harder in the early stages, got it right eventually.

Hydro, by firing him, called into question the fairness of its own process.