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School Bus Operators Taking Ontario to Court
The Toronto Star - 8/2/2012

The Toronto Star, August 1, 2012

Link to story.

Four small school bus companies are taking the Ontario government and two Guelph-area school boards to court, claiming a new policy meant to encourage fair competition in the billion-dollar student transportation sector has killed their business.

Epoch’s Garage, Cook, Doug Akitt and a numbered company, 678928, owned by a couple in Alma, Ont., say they have been ruined by the tendering policy first introduced at the Upper-Grand and Wellington-Dufferin school boards. The boards and their transportation consortium, as well as the province, are named in a statement of claim filed at the Ontario Superior Court of Justice in July.

The bus operators say they were either unable to complete the bidding process or lost routes they had run for years.

“It’s a struggle right now to figure out how we’re going to secure more business,” said Ruth Anne Staples of Epoch’s Garage in Kenilworth, Ont., which has been forced to sell all but one of its 11 school buses.

Bus companies have always worked on a year-to-year basis with the boards they serve. But in the past they could expect to keep that work long enough to finance their buses and cover other business costs.

Moving to the government’s request for proposals model that favours the lowest bidder means small operators who lose their routes won’t survive to bid again because they can’t continue financing their vehicles.

An association that represents about 100 independent school bus operators, many of them similar, family businesses, is also threatening legal action to stop the province and more boards from moving to the competitive tendering policy.

The new business model benefits larger companies that have the bidding experience and the resources to absorb losses on some of the routes that cost more to operate, says the Independent School Bus Operators Association.

“This is an issue of competing for the market, not competing in the market,” said executive director Karen Cameron.

“It completely wipes out the competition. They don’t come back. It kills off the competitors and creates monopolies,” she said. “The big changes are coming in the next couple of months. There could be as many as 50 (bus operators) gone by Christmas.”

That’s when another 20 school boards are expected to issue requests for bids on their routes.

The province is pushing boards to move ahead on the new procurement practices despite the findings of a task force it set up last year that suggested the bidding process needs more work.

Education Minister Laurel Broten is refusing to discuss with the association the task force report by Associate Chief Justice of Ontario Coulter Osborne, leaving the association little choice but to appeal to the courts, said Cameron.

The new board procurement policy is supposed to provide better transparency and value for tax dollars.

Osborne’s report recommended the government extend its deadline for implementing the new competitive procurement process. It also recommended an independent third-party expert examine the issues raised in the report and it suggests the government appoint fairness commissioners to oversee all the student transportation contracts.

The task force was comprised of school board officials, bus company representatives and a procurement advisor with a management consulting firm, as well as a Ministry of Education official. But it failed to reach a consensus on many issues, reported Osborne.

A spokesman for the education minister said that the task force’s role was to recommend best practices.

School boards have already had a reprieve on implementing the Broader Public Sector Procurement Directive that came into effect in April 2011, said Grahame Rivers. That exemption has expired, although boards are being allowed to finish out their existing contracts.

“Local busing providers are more than welcome to bid and in some boards where bidding is already in place, local providers have won contracts,” said Rivers. In 11 areas where competitive bidding has already been tested, local operators increased their market share from 40 per cent to 51 per cent, while multi-nationals’ share decreased.

But Cameron says those were strictly controlled test cases — big companies will win in the end and small operators will go under.

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