Is there a “relational element” to the Atyeo lawsuit that dates back to the 90s? by Jon Hansen

Posted on November 14, 2013


Just as my January 26th, 2013 post on the Bruce Atyeo lawsuit against the Canadian Government regarding the controversial award of a 2004 relocation contract to Royal LePage generated considerable debate – it was one of this blog’s most commented upon posts – yesterday’s follow-up post on Atyeo’s court victory is heading down a similar path.

Of the comments we have received to this point in time – and I would encourage you to read them as they come from industry knowledge leaders and public sector insiders – one in particular stood out.

Kelly Barner from Buyers Meeting Point did a good deal of homework and, as the following reprint of her comment indicates, there is much more to the Atyeo story than most people probably know.  Specifically, what Barner refers to as the “potential ‘sour grapes’ on the part of Atyeo” towards Royal LePage that goes as far back has 1997 and perhaps even longer.

The one common denominator that runs through this particular case is the breadth and total reach of relationships (good and bad), and their impact on the bidding process.  You should consider this – at least in part – as you read Barner’s comment, which includes important reference links.

Kelly PI Blog Headline

This is an interesting story – and it contains a number of all-too-common supply management challenges. The lack of ‘fair and equal treatment’ of the suppliers bidding for the Crown’s Integrated Relocation Program (IRP) is just the beginning.

Despite the fact that Atyeo was disappointed about Judge Annis’ decision not to award punitive damages against the Canadian government, a $30M settlement is a huge sum. Then again, it cost Envoy Relocation $10M in legal fees to get to this point – fees that they had no guarantee would be returned and that could have been used to pursue other business ventures. It was a 2004 contract that caused Envoy to sue, and it took nearly a decade to get to an award. The money probably wasn’t the primary motivator.

So was Atyeo just championing his high standards on behalf of all of the government contractors and prospective contractors? As he himself said, “I can’t help but wonder now many others (suppliers) have known a bid was rigged and if they had the money would have sued” (Calgary Herald, 7 April 2013).

I started doing some reading into the history of this deal and there are two parties that keep crossing paths: Atyeo and Royal LePage Relocation Services (RLRS).

1975: Atyeo co-founded Employee Relocation Services. In 1993 they were purchased by PHH Home Equity (U.S. based) and Atyeo stayed on to run their Canadian operation.

1997: PHH, now renamed HFS Mobility Services, decided to terminate their Canadian operation and worked out a deal whereby RLRS would take over any existing contracts. When the deal was finalized in 1998, Atyeo ‘left the services of HFS’ just as RLRS was awarded the first IRP contract (Cold Lake Sun, 29 April 2013).

It wasn’t until 1999, when Atyeo founded Envoy Relocation Services, that he started going up against RLRS directly for the IRP contracts, but the stage was already set for bad feelings between the local competitors.

Now I’m not saying that this history (and potential ‘sour grapes’ on the part of Atyeo) excuses wrongdoing on the part of the government or RLRS. After all, they’ve been accused of using their inside knowledge that the quantities provided in the bid were inaccurate, allowing them to enter a line item bid of $0 without any risk to their profits. But it does provide enough doubt to disqualify this case as the foundation for new laws or regulatory requirements – there is just too much history.

It would seem that troublesome ‘relationships’ exist beyond those between contracting parties and their suppliers. No bid is run in a vacuum, and no laws will ever be able to wipe away the effects of business taking place, particularly in the perceptions of the people and companies that repeatedly find themselves on the losing end of lucrative deals.

Here are the links to the sources I have quoted:

Calgary Herald, 7 April 2013

Cold Lake Sun, 29 April 2013