# Feds hit with $30M judgment for bid rigging (Brookfield)



## GAP (8 Apr 2013)

Feds hit with $30M judgment for bid rigging
By Tony Spears, QMI Agency 
http://cnews.canoe.ca/CNEWS/Politics/2013/04/08/20721351.html

OTTAWA — A scathing legal judgment has found the federal government improperly awarded multibillion-dollar contracts, turning a blind eye as the winning bidder used "insider knowledge" and a cozy relationship with evaluators to enrich itself.

Judge Peter Annis ordered the feds to pay losing bidder Envoy Relocation Services nearly $30 million in a decision released Saturday.

"Envoy should have been declared the winner," Annis found.

The case turned on the award of relocation contracts for members of the Canadian Forces, civil service and the RCMP.

Royal LePage Relocation Services had been hired to set up a pilot project in 1999 to facilitate the moves of itinerant federal employees.

The project was a success and in 2002 the contracts were publicly tendered.


Royal LePage won, but the victory didn't last long. 
end


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## PAdm (8 Apr 2013)

I was going to go on a Brookfield rant, then thought it best to go with a "we did it to ourselves because we write the IRP policy that we pay Brookfield to implement on our behalf" rant, but got caught up with some self pity "it really was not that bad when our admin staff took care of the postings and perhaps we should have left well enough alone".  But I will simply state that the Government looks to Alternative Service Delivery (ASD) - we did it with CFHA, PSP, Brookfield, etc - as a means of civilianizing tasks and thus lowering the costs to the Dept.  In case you do not know, a contractor or public servant is less expensive than a uniform.  While not a bad idea per se, once the contract is awarded and we march down that path, there is no going back.  Equally, once entity X has the contract, they "have" the contract.  Can you imagine the turmoil if we changed contractors (e.g. Brookfield for relocations or Serco in Goose Bay) on a regular basis?  While the contract/charter/MOU/etc has to be written in painful detail then competed properly, the truth is that there is less work, turmoil, and upheaval if you just stick with the current "bidder".  Based on my experience with ASD, a devil you know is better than one you do not, so I am not surprised with any blind eye given to Brookfield.  

My personal opinion?  At least if the service is being given by a uniform, we can yell at it and change it when they are idiots.  No one ever completed a customer satisfaction survey in my orderly room....     Sorry...the self pity kicked in again.


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## Bruce Monkhouse (8 Apr 2013)

PAdm said:
			
		

> In case you do not know, a contractor or public servant  is less expensive than a uniform.



There it is again....I keep hearing it,.............I've never been answered on my challenge to prove it. [with a real live example, not rhetoric]


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## dapaterson (8 Apr 2013)

Bruce Monkhouse said:
			
		

> There it is again....I keep hearing it,.............I've never been answered on my challenge to prove it. [with a real live example, not rhetoric]



Looking at roughly comparable positions:  CR-5 Max pay = $53 466 per year; Sgt RMS max pay (no spec pay) = $67 656 per year.  Military: +$14 190 per year.

Note that This excludes PLD or other allowances that a military member may receive - an RMS Sgt in a field unit in a place like Edmonton would receive $684 per month in PLD and at least $311 per month in LDA - that's an additional $995 per month or $11 940 per year for the Sgt in this example.


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## PAdm (8 Apr 2013)

Bruce Monkhouse said:
			
		

> There it is again....I keep hearing it,.............I've never been answered on my challenge to prove it. [with a real live example, not rhetoric]



You cannot get caught up with what an e.g. MCpl RMS Clk makes in pay vs what a CR 04 working along side makes.  It is more about the support tail to generate and maintain a CF mbr.  The CR04 is hired off the street, given rudimentary trg (relatively speaking) in the specific job, then spends 7.5 hrs a day doing that job.  The MCpl sitting next to him/her in the Orderly Room was recruited, trained, MOS trained and then posted to that location.  In addition, we built a dental clinic and MIR to support that MCpl, provide SQ and a kitchen, clothe the MCpl, and will again post him/her in a few years (which means a career management process).  Let's not forget overhead like the amount of time spent on PERs for the MCpl, and the MCpl is expected to go to the gym, be on parade, be the unit harassment person, etc, so we do not even get 7.5 hrs of admin work from the mil mbr.  I spent 2 hrs this afternoon first taking the FORCE fitness test, then encouraging others as they completed the test as this is my leadership role to do so.  I am making up for that 2 hrs by working on PERs tonight.  And I am a Cadet function all weekend - all at no extra cost to Her Majesty.  Ask your DND civ to do the same.  Just saying.

So every uniform you take out of the equation and replace by a DND civ is a savings in support costs when the numbers start to add up.  The PERIs were replaced by PSP and most of the Steward trade was also replaced by PSP.  While I love the PSP folks to death and yes they have an overhead, we do not post them, build MQ/SQ for them, take care of their medical, etc.  Obviously you need support pers in uniform to deploy, etc.  However given the demands of the pers budget for the CF, it is very attractive to look at your establishment and wonder what could a DND civ and/or contractor do that a uniform in an office do.  I am not saying I agree with this approach, I am just trying to explain the math.  

I hope this is a reasonable answer to your fair question.


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## Bruce Monkhouse (9 Apr 2013)

That's why I stroked 'public servant and left 'contractor'..............before the 'privatize everything" folks chimed in.


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## dapaterson (9 Apr 2013)

Several reasons why contractors may be cheaper:

(1) No benefits.  What you pay is what you pay, without Health, Dental or Pension benefits and future liabilities.

(2) No long-term commitment.  Contracts have set end-dates; once a public servant is indeterminate, it is more difficult to terminate them.

(3) No PS unions.  Most comparisons between the private sector and public sector show that there is wage inflation at the bottom of the wage scale in the public sector.  Outsourcing means the folks aren't getting the same wages as the PS.

(4) No training.  Contractors are hired with the appropriate skills already, or are responsible for all costs of getting trained.


It's not always cut and dried.


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## Bruce Monkhouse (9 Apr 2013)

dapaterson said:
			
		

> Several reasons why contractors may be cheaper:
> 
> (1) No benefits.  What you pay is what you pay, without Health, Dental or Pension benefits and future liabilities.
> 
> ...



...and yet with all those things no one has provided me with one example in years of asking.


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## dapaterson (9 Apr 2013)

Bruce Monkhouse said:
			
		

> ...and yet with all those things no one has provided me with one example in years of asking.



Probably because the detailed bid information submitted is a commercial confidence, so anyone who's seen them isn't in a position to legally disclose them.


Another option would be to look at the NMSOs for Temp Help, and compare the rates to the salaries for similar positions in the public service.


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## Colin Parkinson (9 Apr 2013)

Always wondered about the Ryder travel contract in late 90 and early 2000. They seemed to always book the most expensive seats and we were forced to use their services. Another person I know complained to his higher ups about the poor service given by a company called "Group' Action" for advertising the Boating safety stuff. When he started looking around for an alternative supplier, he was told in no uncertain terms he must use that company, which ended up being smack in the middle of Adscam. I might be wrong but that travel contract always smelled bad to me.


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## PAdm (9 Apr 2013)

Bruce Monkhouse said:
			
		

> ...and yet with all those things no one has provided me with one example in years of asking.



5 Wing Goose Bay.  Back in 1997/8, Goose was the first CFB to be offered up for ASD (alternative service delivery) of base support services including air traffic control, IT, CE, etc.  The concept made sense - you do not have to be a uniform or public servant to replace a fence post, sweep a runway, or do ATC.  And consider the Allies were paying the bulk of the costs, DND needed to seek a cheaper solution.

The support function went to tender, with DND being one of the bidders.  While technically compliant and the preferred bidder, we lost the bid.  Why?  Pers costs blew us out of the water.  Our mil pers and DND civilians all received a fed gov wage, northern allowance, and all the fed gov perks of the Isolated Post Directives.  As the contract for tender did not require the successful bidder to offer this, Serco (and the other non DND bidders) simply offered a reasonable compensation and benefit package commensurate for the area.  When the dust settled, Serco was successful.  Why?  Pers costs were so incredibly below the fed gov pers costs - not poverty by any means, but lower than the mandated fed gov benefit pkg we are required to pay.  I used to know the numbers as I was there and involved.  Serco executed the contract and I will tip my hat to them as they did indeed run base services including manning the command post at 0200 hrs when an inbound jumbo jet with a potential bomb on board was enroute.  And they did it for millions cheaper.  This much cheaper cost to run Goose was passed along to the Allies who were pleased.

It all went to crapola when the newly hired Serco employees realized that the bid was supposed to offer compensation based on the fed gov compensation package.  Shocker, but DND screwed up the bid criteria.  One strike later and DND had to foot the bill to elevate Serco employees to the same compensation package as they had when they were DND civs.  This new cost for the support of Goose was again passed on to the Allies who were not pleased.  And subsequent contract amendments kept increasing the costs.  Goose ultimately priced itself out of the Allied training business.

So a contractor was becoming more expensive as the original DND structure.  Why?  Simply because they had a fed gov civ wage/compensation pkg forced upon them.  Left to their own devices, they would have remained millions cheaper.  Companies like Serco do not pay to fly your family out of Goose Bay once a year, but the fed gov does do this for their employees.  Anyone is cheaper when it comes to pers costs than the Fed Gov.


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## Bruce Monkhouse (9 Apr 2013)

So,...bottom line is, once again, 'failure'.


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## PAdm (9 Apr 2013)

Epic...  We do it to ourselves.


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## AliG (12 Apr 2013)

dapaterson said:
			
		

> Looking at roughly comparable positions:  CR-5 Max pay = $53 466 per year; Sgt RMS max pay (no spec pay) = $67 656 per year.  Military: +$14 190 per year.
> 
> Note that This excludes PLD or other allowances that a military member may receive - an RMS Sgt in a field unit in a place like Edmonton would receive $684 per month in PLD and at least $311 per month in LDA - that's an additional $995 per month or $11 940 per year for the Sgt in this example.



Silly me, there I thought that RMS Sgts had a few other duties in addition to moving people. I wonder if someone was to add up all the tasks that our good RMS Sgt was doing and compare that with the single tasked CR-5 if the cost comparison would still apply.


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## Remius (12 Apr 2013)

Comparing a CR-5 to Sgt RMS is way off.  A CR-5 is more comparable to Cpl.  A more accurate example might be an AS-03 or AS-04.  Upper pay scale is about 67,000.  So comparable.  Tasks are also comaparable.

Tasks that CR-5 do are on par with what our Cpl types do.


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## dapaterson (12 Apr 2013)

Crantor said:
			
		

> Comparing a CR-5 to Sgt RMS is way off.  A CR-5 is more comparable to Cpl.  A more accurate example might be an AS-03 or AS-04.  Upper pay scale is about 67,000.  So comparable.  Tasks are also comaparable.
> 
> Tasks that CR-5 do are on par with what our Cpl types do.



No.  A CR-3 is Cpl level.  AS-3/4 is more like a Lt.

If your AS3s and 4s are doing Sgt work then their positions have been over-classified (not that that's unknown in government)


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## DAA (12 Apr 2013)

I am think more along the lines of the following:

CR 2 or 3 - Pte
CR 4 - Cpl
CR 5 - MCpl or Sgt (depending on the duties assigned)

AS - now your getting into the Officer levels

Nevertheless and as far as I understand things, public servants do not have "officer" status unless it is, somehow some way, granted to them.  I have only ever come across one such scenario, where a B Comd issued a letter to that effect.

Anyhow, I have seen a CR 5 from an OGD go on assignment and because of the position, they were temporarily upgraded to an AS 1.


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## Colin Parkinson (15 Apr 2013)

I'm a EG-6, which in the CCG wears the equivalent to a Major when in uniform, at same level now in TC which is an Inspector, which the military seems to treat as an officer rank. The first thing I notice when dealing with serving military types confronted with a host of Federal PS types not connected to DND is that they automatically sort them in roughly NCM, NCO, officer categories and treat them accordingly.


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## GAP (27 May 2013)

Judge awards $10M more to victim of ‘outrageous’ Canadian government misconduct
 By Kathryn May, OTTAWA CITIZEN May 7, 2013
Article Link

OTTAWA — An Ontario Superior Court judge awarded an additional $10 million in lost profits, interest and costs to the losing bidder of a relocation contract, chastising the “reprehensible,” “outrageous” and “shocking” misconduct of the federal government for rigging the deal and trying to deceive the court.

In a hard-hitting decision, Justice Peter Annis took the extraordinary step of awarding Envoy Relocation Services full costs in its legal battle to prove bureaucrats intentionally turned a blind eye to the rigging of the 2004 contract, which helped give Royal LePage Relocation Services a monopoly on moving thousands of military, RCMP and bureaucrats to new postings.

All told, the government has been ordered to pay Envoy $40 million.

“(The) court reaction expressed in terms of its shock or intensity of feeling caused by the misconduct of the party is a factor in the award costs on an elevated scale,” Annis wrote.

“As indicated, I have no difficulty concluding that the defendant’s conduct was outrageous, reprehensible and worthy of chastisement. Indeed, I would have ordered punitive damages but for the overriding factor of concluding that such an award would have served the purpose of denunciation or deterrence.”

On the heels of Annis’ latest ruling on costs, the government filed Monday a notice to appeal his original decision, which dealt a devastating blow to the integrity of the government’s procurement system.

Last month, Annis concluded Envoy should have won the five-year deal in 2004 that bureaucrats rigged to go to RLRS, their preferred supplier.

For Envoy’s Bruce Atyeo, the judge’s ruling on costs was another victory in a legal dispute that has wound its way through channels of hearings, investigations and audits before unfolding in last year’s lengthy trial. The government’s decision to appeal, however, could add years and millions of dollars more to the fight.

“An appeal doesn’t change the evidence that’s on the table. It will never go away and people can draw their own conclusions,” Atyeo said. “The decision on costs is even more important because he identified the egregious conduct and distilled what he considered reprehensible conduct.”

Envoy sued the government for $62 million in lost profits and damages over its handling of the 2002 and 2004 contracts after a bombshell report in 2006 by then-auditor general Sheila Fraser concluded the 2004 bidding process favoured RLRS.
More on link


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## McG (27 May 2013)

Colin P said:
			
		

> I'm a EG-6, which in the CCG wears the equivalent to a Major when in uniform …


I believe most civilian LCMM in ADM(Mat) are EG06 while the military are typically MWO.

On the topic of contractors being cheaper than service personnel, does the equation change if the contractor is collecting a CF pension and qualified because the CF trained him or her?  If we are going to consider training as part of the cost for using a CF mbr, then we should also consider it a cost when contracting for military skills that eventually are provided by ex-service members.


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## Occam (27 May 2013)

MCG said:
			
		

> I believe most civilian LCMM in ADM(Mat) are EG06 while the military are typically MWO.



EG-06 or EL-06; on the military side occasionally you'll see a WO but most are MWO as you state.


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## Pat in Halifax (28 May 2013)

I wonder if the individual rewarded with a CDS commendation for that last Brookfield contract will have it revoked.
As for being cheaper, I am sorry but I cannot yet buy into this. Some have mentioned already the benefits to uniformed personnel (other duties, corrections/changes of a minor nature made on the spot etc.) The nearest example I can think of? When posted to Ottawa in Dec 2010, my HHT claim was held up for 5 months because of a receipt for a little over $4 which I later said I would 'eat' if they would process the claim, promptly being told it was too late. Like a company trying to get more money out of you, my agent kept asking for things and I would send them in (copies of hotel bills, car rental, taxi to/from airports etc) and the next day it would be something else. I finally emailed someone I know who was high up in the RMS food chain asking if they had any suggestions (I tried this with BF and they repeatedly ignored my queries.) That afternoon (early Mar 2011 now), I got a phone call from my agent telling me something was on the way via fax and could I sign a few papers and fax them back. Both my HHT and move claim (now 5 and 4 months old respectively) were cleared within 24 hours. 
On the flipside, I put in an LTA for Christmas leave and in the time it took me to drop it off with the clerk and go to the heads and grab a coffee in the cafeteria as I got back to my desk, there was an email from said clerk telling me my LTA was done and monies should be deposited in the next 72 hours. Yes maybe the BF agent is cheaper but if it takes literally months to do what our own people can do in minutes (even hours or days), then it is NOT cost productive.
The only thing sad in all this is that the money from the lawsuit is going to another Relocation company and not those in uniform who were screwed over by this sinful organization. Honestly, I do not know how some of them went home and looked at themselves in the mirror at the end of the day. All this said, and I mentioned this in another thread, my agent on my return to Halifax last July was absolutely fantastic. That said too, she admitted I was her first client-she had yet to be tainted.

Pat


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## EME101 (28 May 2013)

Another reason civilians are often considered cheaper is that whatever task they are given is their job.  While on the military side, we have time to do PT, time we need to be on parade, and additional mandated events like mess coffee breaks.  So a military worker may only work something like 5 hrs at the actual job, while the civilian does the 7.5 hrs.  Also, everytime we get posted we have to spend time learning the specifics of the new job, while the civilians often stay in the positions for a lot longer.


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## Ostrozac (28 May 2013)

EME101 said:
			
		

> Another reason civilians are often considered cheaper is that whatever task they are given is their job.  While on the military side, we have time to do PT, time we need to be on parade, and additional mandated events like mess coffee breaks.  So a military worker may only work something like 5 hrs at the actual job, while the civilian does the 7.5 hrs.  Also, everytime we get posted we have to spend time learning the specifics of the new job, while the civilians often stay in the positions for a lot longer.



That's a great argument for employing AS-3 and CR-3 DND civilians in our orderly rooms. That's not such a great argument for circumventing the procurement system, signing illegal contracts with a civilian company, and then cheating another company out of their fair shot at a profit.


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## EME101 (28 May 2013)

Ostrozac said:
			
		

> That's a great argument for employing AS-3 and CR-3 DND civilians in our orderly rooms. That's not such a great argument for circumventing the procurement system, signing illegal contracts with a civilian company, and then cheating another company out of their fair shot at a profit.



Agreed.  The argument was focused on the above salary to salary comparison of military to civilians.


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## captloadie (28 May 2013)

/tangent
Whether it is Brookfield, Envoy, Royal Lepage, or some new company, I don't think we would see much of a difference in the service. Granted there are probably some horrible BF reps (just like there are some horrible RMS clerks), but remember, they are just following a TB policy and a checklist. They aren't paid to make decisions. There would be no difference I believe if the we went back to having DND civilians or CF members running the program. Anything that was out of the ordinary would still need DCBA approval (any of you have a contentious TD claim recently). To highlight my point, what do the majority of the CF Relocation Dispute personnel do when you go to them with a complaint? They normally show you the policy, say they aren't authorized to make the decision, and forward your paperwork up to DCBA. We all ask why, but the answer is fairly simple. They are trying to ensure that the decisions are the same across the nation, and that one coordinators decision in Comox will not be more or less favourable then a decision in Greenwood. Is it right? Maybe, maybe not. If we had specialized staff who only dealt with relocations and were empowered to make decisions, things might be better. But wait, we have a contractor for that (less the empowered to make decisions part).
/tangent


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## McG (7 May 2014)

Looks like DND is still getting called on how it does these contracts with Royal LePage (now Brookfield).


> *Auditor general: Relocation contract a mess*
> Ottawa Citizen
> Kathryn May, Postmedia News
> 06 May 2014
> ...


http://www.ottawacitizen.com/story_print.html?id=9812091&sponsor=


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## SeaKingTacco (11 May 2014)

MCG,

I am pretty sure that the BGRS contract is a Govt of Canada relocation contract, not just DND.


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## PuckChaser (11 May 2014)

SeaKingTacco said:
			
		

> MCG,
> 
> I am pretty sure that the BGRS contract is a Govt of Canada relocation contract, not just DND.



I concur. The relocation contract handles all government moves, however DND is by far the largest. This isn't a black eye for DND, its another one for our inept PWGSC procurement system.


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## dapaterson (11 May 2014)

PuckChaser said:
			
		

> I concur. The relocation contract handles all government moves, however DND is by far the largest. This isn't a black eye for DND, its another one for our inept PWGSC procurement system.



And who gives PWGSC the requirements?


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## Tibbson (11 May 2014)

And one look at our new travel arranging contract will show we didnt learn any lessons.  Who ever "we" are.  Getting travel arranged via their website is next to impossible but now when we phone them to make arrangements there is an additional charge to speak to a live person.  On the road and operations dictate a change to your travel?  An extra charge by the company when you call in to make the change.  Cant use their website....extra charge.  These guys may be cheaper, on the surface, then Amex but in the long run we get hosed.

As for Brookfield, I got my posting  message three weeks ago and have my first appointment with them tuesday afternoon.   That is the quickest I could get into see them and God forbid I can reach someone by phone but I've already got my contract signed and house sold.  

They sure see us coming whenever a government contract comes up.


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## OldSolduer (11 May 2014)

Why did we - the CF - use this service vice the "old" way?


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## Colin Parkinson (11 May 2014)

Schindler's Lift said:
			
		

> And one look at our new travel arranging contract will show we didnt learn any lessons.  Who ever "we" are.  Getting travel arranged via their website is next to impossible but now when we phone them to make arrangements there is an additional charge to speak to a live person.  On the road and operations dictate a change to your travel?  An extra charge by the company when you call in to make the change.  Cant use their website....extra charge.  These guys may be cheaper, on the surface, then Amex but in the long run we get hosed.
> 
> As for Brookfield, I got my posting  message three weeks ago and have my first appointment with them tuesday afternoon.   That is the quickest I could get into see them and God forbid I can reach someone by phone but I've already got my contract signed and house sold.
> 
> They sure see us coming whenever a government contract comes up.



Yes lot's of problems with booking and the website not recognizing our e-mails. Mind you it's not as bad as the Ryder days when they would book you on a $2000 flight and the seat next to you is going for $300. I would not be surprised if it was another Adscam, about the same time as well.


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## Transporter (12 May 2014)

Big mistake leaving Amex... I personally never had a hitch with them all these years (though I'm sure they didn't get it right everytime). 

I was told several years ago by someone in the know that Amex was prepared to give DND a free online booking tool/capability, providing everyone with the ability to do flight books directly on their desktop, but DND wouldn't accept it for "security reasons". I think the decision likely had more to do with folks within the department protecting their empires/jobs.


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## Tibbson (12 May 2014)

Funny, we have that now...when it works.  Mind you I've booked travel for my guys twice now only to not recieve confirmation so I call them, encuring yet another charge, only to find the booking couldn't be found and did not go through even though I have their confirmation number.  We book air travel because we have to but we do hotel abd car rental directly with the hotel or rental agency now just to avoid more cockups.


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