If you sue the City of Ottawa, don't expect another contract!

What is the consortium made up with Siemens Canada Ltd., PCL Constructors Canada Ltd. and Ottawa LRT Corp. thinking?

This intrepid group served the City of Ottawa with notice that it is being sued for breach of contract, I suppose, alleging that they have suffered "damages" of $175 million dollars as a result of the City cancelling the contract after the November 2006 municipal elections.

The consortium has not lost $175 million as a result of the City coming to its senses and cancelling the ill-conceived light rail plan that Bob Chiarelli and his Council had approved earlier in 2006. The City of Ottawa had planned on reimbursing the $25 million that had been spent on putting everything together, but apparently that's not good enough.

I'm no lawyer, but I have observed in the past that courts tend to "make one whole once again" - in other words, if the contractors had invested $25 million in the bid that ultimately had the contract awarded to them, they should have that amount returned to them. I cannot think of one court case I've read about or seen on television where damages actually put the complainant ahead once the court's decision was rendered.

Will this lawsuit end up with a decision being made against the City of Ottawa for $175 million? Not likely. Is this a tactic being used to up the ante in this growing feud between the City and Siemens/PCL/Ottawa LRT? Probably. In the end, the City will likely have to pay whatever it is that these companies are out of pocket, not a penny more. If that's the case, the consortium will end up with fewer dollars in their bank accounts... it's the lawyers who will end up ahead!!!

The thing is, surely these companies know that this "new" City Council will ultimately come up with a new public transportation strategy or plan. A new document was tabled today and it will serve as the starting point for new discussions. Do Siemens and PCL seriously think that they will be contenders if and when another contract comes along? Would they not have been better off to allow the City to pay its expenses and walk away, and then wait for another kick at the can? Is it not possible that a new plan might be even more profitable, meaning that they'd still be even further ahead down the road?

I guess not.

I was always told not to bite the hand that feeds you. Where I come from, contracts that can generate up to $175 million in profits don't come around every day. All I can say is that when this case is decided (or more likely, settled), Council had better not award the new contract to any of these companies when the time comes to actually build whatever it is we will dream up. That would simply be rewarding bad behaviour and "not playing nice in the sandbox". I know that if I am on City Council when the day comes to select a new contractor, they better not expect any support from me after what they've just pulled off.

Come on, guys... think about it!! Not smart.

* Follow up: I have spoken with a lawyer who tells me that anticipated profits can be pursued in courts under some provisions of our contract laws. Even so, this suit is likely nothing more than posturing by Siemens/PCL/Ottawa LRT, but I would still question anyone who would consider entering contract negotiations with this group when the need arises. Surely there's someone else out there who can step up to the plate. Again - I've always been told that biting the hand that feeds you is never a good thing!!