City overspent on pricey Mercedes vans, auditor finds

The City of Ottawa boughtdozens of Mercedes vehicles for its fleet even though much cheaper models were available, the city's auditor general has found.

Ken Hughes investigated the purchase after someone left an anonymous tip on Ottawa's fraud and waste hotline, and found the citycould have saved at least $703,000 over five years if it had opted for less expensivevehicles.

The city procured71 Mercedes Sprinter vans between 2011 and 2015, a significantly higher number of the vehicles than other Canadian cities purchased overthe same period.

The vans are used by several departments to haul goodstowork sites, and are favoured for their unusuallytall cargo space tall enough foremployees to stand up inside.

The city spent between $46,000 and $64,000 on each van, depending on specifications.

Cheaper vans available

Until 2011, the Mercedes van was the only model of its type on the market, but nowNissan, Chrysler and Ford have cheaper alternatives available.

The city bought seven of the vans between May and August 2015, even though the Ford Transit was the more economical option.

"The city could have saved $167,000 had it purchased seven Ford Transit vehicles instead of the Mercedes Sprinter," Hughes noted in his report, tabled Thursday.

Over an earlierperiod, purchasing 14 Mercedes vans cost the city an extra $396,000, the auditor found.

The city's transit department bought four Sprinters when purchasing a cheaper model would have saved$140,000. The auditordidn't look at every Mercedes purchased by the transit department however, so total savings are potentially higher.

'They made the right decision'

Staffdidn't justify the need for the more expensive vans, Hughes found.

They made the right decision, it's just that we could do a better job of documenting it.- Don Dinelle, director, fleet services

In one case a Mercedes van was damaged in a crash and never replaced. Hughes found there was no documentation to explain what it was used for, and no financial analysis to support itspurchase in the first place.

The purchase "appears to lack diligence and due regard for economy," the auditor wrotein his report.

DonDinelle, director of fleet services for the city, said there were good reasons to opt for the more expensive models, but the purchases weren't always justified in writing.

"They made the right decision, it's just that we could do a better job of documenting it,"Dinellesaid.

City agrees to recommendations

The city tries to keep its fleet as uniform as possible to make repairs and training more efficient,Dinellesaid. Because the first wave of vans were purchased at a time when Mercedes offered the only model that fit the city's needs, later purchases followed suit.

The city has since started totransitionto the cheaper Ford vans, and hasn't purchased at Mercedes since 2015.

The auditor made eight recommendation to make sure future vehicle purchases arejustified, including havingstaff evaluate cheaper alternatives when they come on the market.

Management agreed to all of the auditor's recommendations.