Nanaimo’s $5-million waterworks contract is under scrutiny, as the city launches a new purchasing review.
Nanaimo city council has opted to start the first in a potential series of reviews aimed at investigating whether the municipality is getting the best value for its contracts.
A $5-million waterworks contract awarded to Duncan-based Corix Water Products will be the first agreement reviewed under the program.
According to Brian Clemens, the city’s director of finance, Corix was part of a new cost-saving strategy by the City of Nanaimo which offered one preferred supplier a five-year contract.
The city previously only offered one-year agreements or went out to tender when it needed a product.
The new purchasing review is the only way to prove the longer-term contract gave the city the best price and value, he said.
The review, done by a third party, will look at savings, overall value and whether the company delivered on promises in its initial request for proposal.
The work is estimated to cost less than $25,000 and will provide council with a test case for other purchasing reviews.
Politicians will also have the option to hire an internal auditor to do future work.
“Every once and awhile in business you have to stop for a moment and hit reset and do a check and ensure that you are getting the value you originally bargained [for],” said Coun. Bill McKay, who calls the review an important reality check.
The city believed it was getting the best value out of a five year waterworks contract with Corix – three years later “are we getting what we thought we were getting?” he said.
A request for proposals of the purchasing review will go out within the next week. The project is expected to start in two months.