A billion dollar contract to relocate civil servants across the country is mired in allegations of mismanagement and cronyism so serious that the parliamentary spending watchdog may send it to Canada's Auditor General for review next week.

The chair of the federal public accounts committee, Alberta MP John Williams, points out the relocation contract was awarded for the second time last fall to Royal LePage Relocation Services.

Royal LePage won the contract again despite repeated complaints about fairness and the perception of conflict of interest. The company is owned by Brascan -- who have contributed more than $90,000 to federal Liberal coffers in the last seven years.

"This government has a credibility problem and rightly so, because they have allowed many things to fall by the wayside," says Williams.

The contract has been an embarrassing thorn in Ottawa's side for years -- ever since competing bidders complained that public servants handling the file were too cozy with Royal LePage executives.

In one case, an internal audit at the Ministry of Public Works and Government Services found that a senior official in the judging process went on a Caribbean cruise with a Royal LePage executive before the contract was awarded.

"A senior executive at Royal LePage vacationed with the senior person responsible for the bidding process on a cruise ship. There was a relationship that went far beyond your normal client supplier relationship," says Bruce
Atyeo of Oakville based Envoy Relocation Services.

Envoy was a losing bidder when the contract was last tendered in 2004 and is one of the parties now calling on the Auditor General to review the matter.

Atyeo and his company have been complaining about the relocation contract since 2002 -- when Royal LePage won the lucrative relocation deal for the second time. The complaints from Atyeo and others at the time sent the contract to the Canadian Trade Tribunal -- a federal agency that probes government contract letting.

The CITT recommended that Public Works reevaluate
portions of the proposal from all bidders. During the Trade Tribunal investigation -- allegations about the Caribbean cruise surfaced and an audit revealed that employees involved in developing evaluation criteria for bidders were in a conflict of interest for accepting gifts from Royal LePage.

These investigations went on for months until PublicWorks finally re-opened the bidding and re-awarded the contract again to Royal LePage in November, 2004. That set off a whole new round of complaints.

"My problem is not with Royal LePage my problem is with Public Works who are not doing their job. They're not managing this contract the way a prudent business would manage this contract and they're certainly not managing it in the best interest of taxpayers," says Atyeo.

"In the last round, they did not take the lowest bid. Our bid was lower than Royal LePage on one of the contracts.
And we were 92 per cent compliant with their criteria."

But Royal LePage officials dismiss those beefs as "sour grapes."

"We really ought to be the supplier for the government of Canada. We have the experience and the knowledge," says Michel Bonin of Royal LePage Relocation Services.

"Besides, you don't ever really buy the cheapest house on the block. You have to look at the global environment and that's what we do," says Bonin.

Public Works Minister, Scott Brison, says that last fall's decision to award the contract for the third time to Royal LePage represents "the best possible value for Canadian taxpayers."

And what about the fact the winning bid was $8 million higher than the competitor?

"The issue is best value and best value is not always reflected in the lowest price," says Brison.

Brison also points out that the government officials accused of conflict of interest are no longer with the Public Works ministry.

However, the questions about the billion dollar relocation contract for soldiers, Mounties and civil servants go beyond who had the lowest bid. Competing real estate companies claim they have seen a steady decline in their market share over the years that Royal LePage has had the contract. They say many civil servants simply assume they should list their homes with the company who holds the re-location contract.

"Our government relocation contracts are probably down somewhere between 15 and 20 percent." says Ray Brownlee, a Century 21 realtor based in Brandon, Manitoba. Brownlee says his share of listings from the Shilo military base used to be about 35 to 40 per cent of the available market.

"It's very disturbing and very frustrating. I think there's a conflict of interest in our marketplace," says Brownlee.

But Royal LePage officials again dismiss those concerns. They point to national statistics showing market share among Canada's big three real estate companies virtually unchanged over the last three years. They say, in some cases, other realtors get more business than they do.

"Our statistics show that Royal LePage agents do not benefit at all from this contract. In fact they are penalized in some instances," says Royal LePage's Bonin.

And as for whether Royal LePage has changed any of its business practises after the controversy over socializing with civil servants -- Bonin says: "We don't do anything more or less than any others. It's anything usual in any business. I mean we've given T-shirts and mugs and vests and nothing unusual. So from now on we're more Catholic than the Pope, really."