Toronto looks to suspend contractor accused of overbilling city amid investigation
CBC
Toronto city staff are calling for a general contractor accused of overbilling to face an additional suspension to stop it from bidding on new contracts as an investigation continues into the allegations.
In a report, city staff call for Duron Ontario Ltd. to face a suspension of another four months. Duron is a construction company based in Mississauga. The report is being considered by city council's general government committee on Wednesday
Duron is already serving a six-month suspension imposed by the city this past June for contravening its supplier code of conduct, the report says. That suspension expires Dec. 7, 2024 and was based on initial audit findings indicating "Duron had overbilled the City," the report adds.
The report says Geneviève Sharkey, the city's chief procurement officer, is making the recommendation for a four-month additional suspension to protect public funds and the city's procurement processes.
"The City strives to uphold accountability and protect the integrity of public funds by enforcing the Supplier Code of Conduct. By approving the recommended additional four-month suspension, pending a comprehensive report in Q1 2025, the City reinforces its commitment to responsible and fair procurement and contracting practices," the report says.
On its website, Duron says it specializes in everything from building rehabilitation to concrete finishing, waterproofing to pothole repairs.
The company has worked on a number of multi-million dollar government projects in Toronto. City documents show Duron is renovating TTC stations and other city-owned buildings to make them accessible and has previously worked on major projects such as the renovations at Union Station.
The four-month suspension will allow the company to review and respond to documents provided by the city, Sharkey says. Sharkey says she will consider any response provided by the company and provide another report to council.
According to the report, Sharkey served notice to Duron in October that staff are also proposing to recommend a five-year suspension, the maximum penalty possible for violating the city's supplier code of conduct. The company was told that it could provide the city more information and documents by Nov. 8, 2024 as the investigation continues.
To find out how much it has allegedly been overcharged by Duron, the city has hired KPMG's forensic accounting unit, a confidential document obtained by CBC Toronto last year shows. The city's legal team is also part of the investigation, according to the document.
A March 6, 2023 letter from KPMG to the city, also obtained by CBC Toronto, outlines what allegedly transpired between the two sides.
The city hired Duron for at least six major projects in recent years, the document says. CBC Toronto tracked down a number of projects worth over $37 million contracted to Duron and approved by the city, dating back to 2018.
What wasn't made public were the "change orders" that the company and various subcontractors and suppliers that work for it filed with the city. Duron submitted some 400 change orders – costs the company is seeking above and beyond what was initially contracted.
The city is concerned those orders were "improperly altered," according to KMPG's letter.
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