14 December 2006 | Paul Snell

Contracts to relocate members of the Canadian army, mounted police and civil servants were tendered unfairly, the country's auditor general has ruled.

In a report to the Canadian House of Commons, Sheila Fraser rebuked the ministry of public works and government services (PWGSC) for not taking action to correct the process, despite warnings.

"Government contracts should be awarded through a process that is fair, equitable and transparent," said Fraser. "We found important contracts that were not."

The report concentrates on two contracts awarded in 2004 as part of a plan to relocate members of Canada's public services across the country. The programme involves around 15,000 relocations per year. This cost about C$272 million (£122 million) in 2005.

The contracts had a combined value of C$152 million (£67.9 million). They were awarded to Royal LePage Relocation Services (RLRS) in November 2004 and run until 2009.

Fraser's report identified two major issues in the tendering process. The first was the accuracy of information provided to bidders in the request for proposal issued by the department.

The auditor reported a wide gap in estimates of the amount of business available. She said that the request for proposal estimated around 7,500 relocations for the army. Between 1999 and 2005, only 183 had taken place.

In addition, when one bidder asked to see figures for use of the relocation services, the PWGSC said they were not available. Fraser said the department had an "obligation" to provide this information. If not, it would offer the incumbent bidder, RLRS, an advantage.

Fraser reported that, in response to bidders' questions about the amounts, PWGSC did not take sufficient action to check the figures were correct.

The PWGSC has agreed with the report's recommendations, which include ensuring more than one person reviews the financial element of the bids.

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