Michael Lewis
Special to Canadian Design and Construction Report
Mississauga-based general contractor Duron Ontario Ltd. has been hit with a five-year suspension from bidding on Toronto contracts after audits found it overbilled by at least $161,000 for work related to accessibility upgrades at city facilities.
Councillors on the city’s general government committee approved the suspension, the maximum penalty for violating the Toronto Municipal Code’s supplier code of conduct, in a unanimous vote on Tuesday.
Officials with the company, which a KPMG audit says has done more than $40 million worth of work for the city since 2021 including accessibility upgrades to fire halls and TTC stations, expressed contrition for what they called an isolated incident.
They told the committee that billing discrepancies involved three employees, one of whom has been fired while another left and a third is still at the company but is “remorseful.” The company also says it has greatly strengthened its internal controls.
They called a five-year ban excessive and said it would likely force the company into insolvency, affecting the jobs of more than 150 employees. Duron, which says it has worked on city projects for more than 50 years and has been in business for more than 66 years, saw a letter of support arguing against the ban submitted to the city by Carmen Principato, business manager for Labourers’ International Union of North America, Local 506 in Toronto, which represents Duron workers.
He said a five-year ban would effectively eliminate Duron’s main line of business “and almost certainly lead to layoffs.” He added that his letter is not meant to condone improper billing practices, but said the city has the means to penalize and monitor Duron to ensure that malfeasance is not repeated while protecting construction jobs.
The company says it has focused on specialized public sector projects, including building refurbishment, and has saved the city millions by being the lowest bidder on several projects.
Duron, which conducted its own audit and admitted to $161,000 in overbilling, said it has learned its lesson and would willingly submit to greater scrutiny if the lengthy suspension was not imposed. It has offered to repay the city for the overbilled amount plus the costs of the ongoing KPMG audit commissioned by the city.
But the city’s chief procurement officer, Genevieve Sharkey, told the committee that the suspension is an “accountability measure” that mitigates risks for the city and its ratepayers and is not intended to be punitive. She said the city currently has four other vendors on suspension, some over similar issues and for long terms.
The city had imposed a four-month suspension on Duron and related subcontractors set to expire in April, a period intended to give the company time to present more evidence regarding its billing practices.
But KPMG said it had not received access to materials requested from the company, adding that its audit shows that Duron billed for goods and services it did not deliver and submitted misleading information, false or exaggerated claims to the city.
KPMG’s audit found examples where Duron submitted a quote to the city for amounts greater than those documented by subcontractors and said Duron lacks “appropriate internal contract management controls.” City staff in a report said, “there is no reason to accept that the behaviour is isolated.”
