The federal government has sent out two RFPs for its multi-year Integrated Relocation Program contract – the current contract expires in November. The contracts cover the services available to federal employees (including the military and RCMP) when they must move for their work, and the costs the federal government will reimburse. The relocation companies that bid on these contracts are generally connected to real estate companies. Real estate agents will get a percentage of any home sale or purchase. How they determine third-party costs is less clear.
Some of those third-party suppliers, the lawyers who look after the legal issues when government employees buy and sell houses as part of a move to a new work assignment, think it’s time they were consulted about their fees as part of the contract renewal process.
“Real estate agents’ fees under the IRP are based on a percentage of the purchase price and automatically adjust with the cost of living,” Albina Moran, Chair of the Real Property Law Section, wrote in a letter to the Public Works Department in August, following up on a previous letter outlining the Section’s concerns with the IRP, in December 2015. The current IRP expires in November 2016.
“For lawyers, the fees are set at a flat rate, which has remained constant for approximately 10 years, without cost-of-living increases. Meanwhile, the demands on lawyers, liability exposure and operating costs continue to increase. Under the TBS Contracting Policy, the procurement process should consider best value, and ‘[i]nherent in procuring best value is the consideration of all relevant costs.’ A flat fee for the next six-plus years does not promote this.”
Not allowing for cost of living increases creates an access-to-justice issue, the Section says, since it means that government employees won’t be able to hire the lawyer of their choice if that lawyer refuses to work for the low fixed fee provided by the contract, or if the employee has to pay the difference between the lawyer’s actual fees and what the contract affords for their services.
And sometimes even lawyers who can’t afford to work at those low fees can’t afford not to take the file, as some “have been told by real estate agents that unless they accept referrals under the (Government of Canada Relocation Support Services) they will not get other referrals,” the letter says. “The terms and conditions of the IRP enable real estate agents to exercise their market position to pressure other service providers.”
The Section points out that in the process of buying and selling homes, the lawyers are the ones who are looking out for the best interests of the public servant in question and as such more care should be taken to ensure they are properly remunerated.
“Lawyers must provide all clients with high-quality services,” Moran writes. “The effort and responsibility associated with these transactions to the professional standard of service required by the law societies that govern lawyers, and expected by government personnel, is not commensurate with fees offered.”