Government officials and a newly formed lobby group are arguing that new tendering procedures for school bus contracts enacted by the Ministry of Education this year are putting local transportation companies in real jeopardy.
Passed by the Ontario Legislature in 2010, the Broader Public Sector Accountability Act does a number of things, including setting out new rules for lobbyists. But it does something else as well.
The act also dictates new rules that institutions or organizations that receive more than $10 million in public money must follow when awarding tenders.
That change essentially made it illegal to use preferential treatment when awarding contracts through a competitive process.
What this has done is change the landscape in Ontario when it comes to awarding things like school bussing contracts.
It used to be perfectly legal for school boards to use preferential treatment when awarding bus contracts: local businesses were protected and outside competition was minimized.
Now, the playing field is wide open, and organizations like school boards are forced to open competition to any school bus operator that can bid.
RURAL SCHOOL BUSSING CRISIS – A BIG CITY FIX THREATENS RURAL BUSINESSES
School busing has historically been a stable industry with fair rates of return and an exemplary safety rating. Over the years, it has evolved into a sole-purpose industry, and with consolidation of school boards, most bus operators now have one customer. Due to procurement scandals in other government contracts, the provincial government has determined that “the status quo is not an option”. Now, a “one-size-fits-all” procurement process, which fails to take into account the unique economics of school bussing, threatens to put small businesses out of business overnight.
School busing tenders causing concern for local companies
Concern is rising over the fact that Northern School boards are approving tenders with large multinational transportation companies in a bid to save money on school busing costs.
Local companies such as Schumacher Bus Lines and Kamiskotia Bus Lines have been providing services for decades. Schumacher Bus Lines is at risk of closing their doors and Kamiskotia Bus Lines will be closing because of lost contracts.
The Independent School Bus Operators Association’s (ISBOA) Position on
the Current Proposal for Competitive Procurement of School Bus Transportation in Ontario
Ontario’s Independent School Bus Operators Association (ISBOA) is concerned about the current direction the province is taking in regards to mandating competitive procurement of school bus transportation. The Independent School Bus Operators represent the backbone and the pioneers of the school bus industry in Ontario. They have a long history of providing safe, secure and on-time transportation for the children of Ontario, many with operations going back over 60 years.
Family-run bus company decimated by process
A long-time local bus company has lost 75% of its school business after trying to outbid larger operators in a new provincial process that has "decimated" other small, family run coach lines.
Guy and Rose Ravin are the only ones left at Ravin's Coach Lines, started in 1947 by Guy's grandfather, on Rouse Street in Tillsonburg, but they had to sell their property.
Recently the couple lost all of its 19 bus and van routes in Oxford County after unsuccessfully bidding against much larger companies who offered much lower prices the Ravins could not match.
"We had 19 drivers we had to let go, but hopefully we'll have five of them come back," Rose Ravin said.
Oxford County is one of a few counties where the provincial government has tested out a system that puts the school bus contracts out to tender, soliciting bids and pitting small bus companies such as Ravin's against large ones like First Student.
Ravin said they can't compete with the bids of larger companies because they don't buy buses, parts, gas or insurance in bulk, which gives big corporate competitors a discount.
The process of filling out the 88-page proposal package alone was costly and time-consuming, taking Ravin nearly a month to complete because she had no administrative staff to help her.
When the Ravins received the letter in March saying they were not renewed to service the 19 Oxford County routes, Rose said she was shocked.
"I was horrified," she said. "I felt sick to my stomach. I couldn't even read what was in the letter to my husband."
"It was really tough at first. Much more for Guy because it's been his family's business for three to four generations."
They felt even more slighted because they have purchased $10,000 worth of manuals to help them make sure the operation and drivers were up to date and provincial standards for the RFP.
"Safety is a big issue here," she said. "We scored extremely well when it came to safety and the technical requirements in the RFP."
"I've written a letter to (Minister of Education) Leona Dombrowsky pointing out that the process is not just about the lowest price, which she says it isn't, but it is."
"Why is local better?" she said. "If a bus goes off the road in the winter, we know the county people who can go help, while a big company will call from far away to get someone who isn't local to go help who might take 45 minutes to get there. That's more time those poor kids will have to spend out in the cold. We also know the roads and the conditions better."
She wondered, if the business goes belly up, would other community events and groups such as free swim and skate days for children, churches, sports teams and nursing homes get the same kind of service they are accustomed to with Ravin's.
All of Ontario's school bus routes are due to be subject to a request for proposal process by 2013.
The Ravins are hoping the province will put a moratorium on the bidding process before it puts more small bus operators out of business.
Around 15 to 18 companies have already been "devastated by the process" in Ontario, including Cook Bus Lines in Mount Forest.
The association says the competitive bidding might save the provincial government money in the short term, but it will lead to a monopoly as bidding drives small operators like Ravin's out of business.
Ontario school children: could their lives be placed at risk?
March, 2011 a multinational operator took 90 per cent of all the school runs in Timmins. As many as 12 operators were put out of business overnight. In Kenora, they lost their only school bus operator to a large corporation operating out of the United Kingdom.
Thirteen years ago, Sudbury Student Service Consortium abandoned annual negotiations in favour of five-year competitive contracts. Sudbury went from 23 local bus companies to just a few multinational companies. Their latest five-year contracts have risen over 10 per cent
.
Who is going to bid when these contracts are up if all the local school bus operators are gone? Is your local operator going to sit on one, 10, 20 or 25 buses for five to seven years at a cost of $100,000 each? Presently you may see a savings, but when the competition has been eliminated who is going to challenge the multinationals’ pricing? No one, soon the sky will be the limit!
Are you aware that some multinational’s central dispatches are outside of Canada? Currently (in most cases) local school bus operators are your neighbours. They grew up in the same area that your children now live. Who do you want to be accountable for your children? Will it be your neighbours (your local school bus owner) that you have known for years or a huge corporation out of the United States or the United Kingdom?
In the school bus industry, there are three safety standards on a school bus; maintenance of the school bus, training programs, and drivers wages. Due to these competitive contracts, larger multinational companies are undercutting the local operators. As stated in the Listowel Banner, “Lesa McDougall has heard from bus companies that have submitted bids far lower than what is needed to remain sustainable and that have artificially suppressed their rates as a way to win the tender and avoid losing business”. They can not operate like this forever. The operators have been financially squeezed over the last decade. What has to be given up to make ends meet? Maintenance of the school bus? Reduced training programs? Is it safe to put your child on a school bus under these circumstances? McGuinty needs to stop the RFP process before it results in a serious injury or death of a child!
Ontario freezes changes to school bus contract rules
The Liberal government has suspended a new tendering process that is being blamed for ruining small, family-run school bus companies and destabilizing the entire school bus industry across Ontario.
The province has been working on new rules for school boards to pick their bus operators. The contracts are worth about $800 million a year.
But at boards where the new rules have been tested — forcing companies to compete for routes in a tendering process for the first time — small companies that drove kids to school for generations have packed it in. Other independent operators lucky enough to have won busing contracts admit they bid so low, they don’t know how they’ll cover their costs.
No one seems sure exactly why the accountability exercise, in the works since about 2008, hasn’t worked.
“Was it the paperwork (operators) didn’t complete properly? Was it that they didn’t know how to sell themselves?” Donaldson said. “It’s become a black hole of decision making and nobody understands why.”
Education Minister Leona Dombrowsky said Thursday she’s heard the complaints and is declaring a six-month moratorium on the procurement pilot projects.
“We’ve listened to the bus operators,” she said. “They wanted us to take a little more time to step back and review the process that’s in place.”
The government is setting up a task force consisting of bus operators, school boards and independent accounting experts to review the process and recommend changes, Dombrowsky said.
But that’s too late for operators like Ruth Anne Staples. She and her brothers have been forced to sell eight of the 10 buses owned by their company, Epoch’s Bus Lines, in Kenilworth, about an hour’s drive west of Orangeville.
Last year, Epoch lost all but one of its 10 routes in the new bidding process.
“We lost basically everything. We could not pay the loans on (the buses) and we had to sell them at a reduced price,” Staples said.
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