The company that pioneered private job placement services in B.C. for people receiving welfare has lost an $8 million government contract in the province's Interior.
A message sent on Aug. 8 by ASPECT-B.C.'s Community Based Trainers to its members working in the sector said the Ministry of Housing and Social Development had cancelled the Interior region contract with WCG International Consultants Ltd., which runs the JobWave program. The company continues to provide B.C. Employment Program services in other regions of the province.
Housing and Social Development Minister Rich Coleman is away until Sept. 2 and was unavailable for comment. A ministry media contact said nobody could speak about the cancelled contract in his absence. "It's at that level."
JobWave's main media contact is Robin Adair, WCG's vice-president of communications and government relations. The former television reporter worked on the campaign of a winning Liberal candidate in 2001. Adair did not return calls.
"The BCEP contract for the Interior is currently being re-tendered to a select group of two organizations that are currently delivering BCEP services in other areas of the province," said the message to the community groups. The government had asked GT Hiring Solutions (2005) Inc. and the B.C. Society of Training for Health and Employment Opportunities to bid on the contract. "The goal is to have a new contractor determined as soon as possible to ensure no gaps in service."
A THEO B.C. official said the company learned on Aug. 26 that the contract had gone to GT Hiring Solutions.
A year ago, Tucson, Arizona-based Providence Service Corporation bought WCG. The company, which specializes in providing social services paid for by governments, has a reputation for never losing contracts. The WCG purchase was Providence's first foray into Canada.
A Providence official said she would pass questions on to CEO Fletcher McCusker, who was in a meeting. He did not call back.
In 2007-2008, according to the detailed schedule of payments included with the province's public accounts, the B.C. government spent $30.9 million with WCG. WCG's largest competitor is GT Hiring Solutions (2005) Inc., which runs the Destinations program and did $7.1 million in business with the government that year.
There have been concerns about WCG's JobWave program in the past. In April, NDP critic Jagrup Brar focussed several hours of questions on the $30-million sale, alleging the Liberal government had helped "their friends" get the company ready to sell.
A 2004 government report found JobWave and other private sector employment programs were unlikely to deliver the government the savings they'd promised. The government redesigned its employment programs in 2005, but continued working with the same main contractors.
Expansion plans thwarted
A few years ago WCG had plans to expand JobWave style programs throughout North America. It opened JobWave America, but never won any business in the United States. The branch was folded when Providence bought the company.
WCG won a contract in 2005 to provide a pilot project, JobsNow, in Ontario. The pilot ended over a year ago and has not been renewed. The Ontario Ministry of Community and Social Services prepared an evaluation of the project but has not released it. Originally scheduled for a fall 2007 release, the ministry's website now says it will be released in summer 2008.
WCG parent company Providence Service Corporation released its second quarter results in early August. A week earlier Providence had cut its profit outlook, causing investors to dump so much of its stock that the company lost nearly half of its market value.
The B.C. government made changes to the welfare system in 2002 that were meant to move people from income assistance into jobs. It spends about $70 million a year on job programs, mainly with private contractors, plus over $25 million to administer the programs.
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