City of Toronto staff are requesting that a general contractor accused of overbilling face an additional suspension to prevent him from bidding on new contracts as the investigation into the allegations continues.

In a report, city staff are calling for Duron Ontario Ltd. to face an additional four-month suspension. Duron is a construction company based in Mississauga. The report is analyzed on Wednesday by the general government committee of the municipal council

Duron is already serving a six-month suspension imposed by the city last June for violating its vendor code of conduct, the report said. That suspension expires Dec. 7, 2024, and was based on initial audit findings indicating “Duron overbilled the city,” the report added.

The report says Geneviève Sharkey, the city’s chief procurement officer, is making the recommendation for an additional four-month suspension to protect public funds and the city’s procurement processes.

“The City strives to uphold accountability and protect the integrity of public funds by enforcing the Supplier Code of Conduct. By approving the additional four-month recommended suspension, pending a comprehensive report in the first quarter of 2025, the City reinforces its commitment to responsible and fair procurement. and contracting practices,” the report said.

On its website, Duron says it specializes in everything from building rehabilitation to concrete finishing to waterproofing to pothole repair.

The company has worked on a number of multi-million dollar government projects in Toronto. City documents show Duron renovates TTC stations and other city-owned buildings to make them accessible, and has previously worked on major projects such as renovations at Union Station.

The four-month suspension will allow the company to review and respond to documents provided by the city, Sharkey says. Sharkey says he will consider any response provided by the company and provide another report to the board.

According to the report, Sharkey notified Duron in October that staff was also proposing to recommend a five-year suspension, the maximum possible penalty for violating the city’s vendor code of conduct. The company was told it could provide the city with more information and documents by Nov. 8, 2024, as the investigation continues.

Questions about changing orders

To find out how much Duron may have been overcharged, the city hired KPMG’s forensic accounting unit, according to a confidential document obtained by CBC Toronto last year. The city’s legal team is also part of the investigation, according to the document.

A letter dated March 6, 2023 from KPMG to the city, also obtained by CBC Toronto, outlines what allegedly happened between the two parties.

The city has hired Duron for at least six major projects in recent years, the document states. CBC Toronto tracked a series of more than $37 million worth of projects contracted to Duron and approved by the city dating back to 2018.

What wasn’t made public were the “change orders” the company and the various subcontractors and suppliers working for it submitted to the city. Duron submitted about 400 change orders — costs the company is seeking above and beyond what was originally contracted for.

The city is concerned that the orders have been “improperly modified,” according to KMPG’s letter.

Bay Concourse at Union Station, which opened on July 27, 2021. City documents show Duron renovates TTC stations and other city-owned buildings to make them accessible and has previously worked on major projects such as renovations of at Union Station. (Martin Trainor/CBC)

The city alerted Duron to the issue, the document states. The company blamed what happened on a single, unnamed employee, who it said had been fired.

Under Toronto’s municipal code, which includes the vendor code of conduct, vendors are required to “interact with the city in an honest and fair manner,” the report says. Violation of the Supplier Code of Conduct may result in disqualification, suspension or additional sanctions.

Depending on what the general government committee decides on Wednesday, the recommendation for an additional four-month suspension will be considered by the council on December 17.