B.C. liquor branch contracts didn't meet government standards, audit reveals

An audit of B.C.'s liquor distribution branch office operations revealed many direct contracts it awarded to service providers did not comply with government policies of fair and open competition, the auditor general said Wednesday.

In a report, Auditor General Carol Bellringersaid shereviewed 74 direct contracts thatis, contracts that are awarded to a specific supplier instead of opening a competition and found55 per cent of the files did not meet the bar of exceptional circumstances required to directly award a contract.

Furthermore, 54 contracts indicated the liquor branch did not have enough documentation to show fairness.

The total value of thecontractswasalmost $25 million.

The files had to do with the running of business operations, for example, buying office supplies, contracting IT services, or making office repairs, and were not associated with liquor or cannabis supplies.

Competitive process preferred

Competitive processes allow for best value for the public dollar, she said, and there are only a few exceptions to award a non-competitive, direct contract.

These include if the contract is with another government organization,only one contractor is qualified or available to do the work;there is an emergency,a competitive process would interfere with security or order, compromiseconfidentiality or create some other harm.

One exampledetailed in the auditor's report was a contract to get LDB-branded promotional items for its annual staff appreciation day. By the time staff needed the items,there was not enough time remaining to procure them through a competitive contract, so the LDB justified the direct contract valued at $57,000 as an emergency to meet the event deadline.

"Emergency doesn't mean I forgot to do it until the last minute," Bellinger said.

The auditor general has recommended all staff involved in contract management to complete further training to understand proper procedure. The branch should more clearlydetail the reasons why a contract was directly awarded in each fileand prepare a cost-benefit analysis for any contracts valued at more than $100,000.