Montreal engineering contracts soar in value
The City of Montreal's reliance on engineering consulting firms has increased significantly since 2012, according to a study by the Institute for Research and Information in Socio-Economics (IRIS). This increased dependence has fueled a spike in the prices of such services, which has contributed to a pattern of overbidding in the city's construction industry.
The study reveals that the City of Montreal has become heavily dependent on a small number of engineering consulting firms to manage its infrastructure projects, with just five companies accounting for 76% of all engineering consulting contracts awarded in 2024. This market consolidation has led to increased costs for taxpayers, as professional fees for these services have risen by 82% between 2012 and 2024, more than twice the inflation rate.
Colin Pratte, author of the study, states that the city's dependence on a select few firms creates a power dynamic that works against the public's interest. He suggests that hiring municipal engineers could help rebalance this dynamic. Pratte based his findings on an analysis of 531 public contracts awarded by the City to engineering consulting firms between 2012 and 2024, as well as the minutes of a meeting between the City and the Association of Quebec Engineering Firms (AFG).
The City has attributed a decline in the quality of services received to the increase in contract volume and the resulting pressure on its own teams to correct errors and inconsistencies. It was also noted that firms tend to prefer national contracts over municipal mandates, contributing to the limited number of bids for the City's contracts.
The City of Montreal acknowledges the concerns raised in the study but highlights measures it has put in place to oversee the awarding of contracts to external firms, including the creation of the General Inspector's Office, the General Controller, and the Contract Review Commission. However, IRIS recommends reducing dependence on external consultants to maintain a balanced power dynamic between the City and private firms.
The study also points out that framework contracts, which extend hourly banks to consulting firms over several years, may contribute to inflated pricing. IRIS suggests that countries such as Denmark and the United Kingdom have found ways to promote competition in such contracts.
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The study suggests that the City of Montreal's dependence on a small number of engineering consulting firms has led to significant increases in professional fees, which are more than twice the inflation rate, as these firms often prefer national contracts over municipal mandates. Furthermore, IRIS recommends reducing the city's reliance on external consultants to maintain a balanced power dynamic between the public and private sectors, and proposes that countries like Denmark and the United Kingdom have successfully promoted competition in framework contracts.
