An audit of the way the City of Winnipeg went about building its new police headquarters has revealed officials failed to follow city processes put in place to manage the design, procurement and construction of major projects.
The city is in the midst of a $210-million police headquarters project marred by $74 million in cost overruns since city council approved the purchase and renovation of the former Canada Post building on Graham Avenue in 2009.
An audit by the consulting firm KPMG, presented to city council Monday, concludes the project was badly managed by city officials, who did not appear to understand policies created to ensure construction contracts were awarded in a fair and open manner.
KPMG auditors noted a number of problems with the project. They include:
- The city failed to observe its own project-management policies.
- City administrators failed to consistently tell council about the status of the project and did not provide council with sufficient detail about the progress of construction.
- The roles and responsibilities of administrators in charge of the project were not properly defined.
- The project was $67 million over budget, not including $7 million in finance charges that had to be added due to the extended time the project has taken.
- The most recent report to council said the project would be finished on June 30, 2014, six months later than the date stipulated in the construction contract. This later date has come and gone.
- A shooting range that was supposed to be part of the project was moved 20 kilometres away, with undetermined operational consequences for the Winnipeg Police Service.
- "Lack of consistent understanding and application of the city’s procurement policies and guidance to promote open, competitive and transparent procurement related to major capital projects."
The police headquarters project involved the $29.25-million acquisition of the Canada Post building and a renovation initially pegged at $106 million. This total figure was revised to $210 million by 2012.
In 2011, council approved $57 million worth of cost increases and granted former Winnipeg chief administrative officer Phil Sheegl the authority to sign the final construction contract, which was supposed to come with a guaranteed maximum price. It was later revealed that price was based on a design that was 30-per-cent complete. The construction contract was awarded to Caspian Construction, a Winnipeg firm.
The disclosure of $17 million in additional cost increases in 2013 contributed to Sheegl’s departure from city hall.