AUDITORS will review how the city awarded contracts to manage construction of the new police headquarters despite assurances from chief administrative officer Phil Sheegl that officials followed proper procedures.
On Wednesday, Sheegl responded to concerns raised by former mayoral adviser Brian Kelcey, who alleged city officials may have violated procurement rules when they awarded the Dunmore Corporation the contract to manage construction of the new HQ on Graham Avenue. The Dunmore Corporation's president is Ossama AbouZeid, who also oversaw construction of Investors Group Field, the Winnipeg Blue Bombers' new stadium at the University of Manitoba.
In a letter to council, Kelcey said the city's policy is to tender consultant contracts that exceed $100,000, but a recent city financial report suggests Winnipeg's public service sole-sourced a contract to Dunmore and paid the company $262,580 in fees to manage the police headquarters redevelopment.
The letter also raised concern Adjeleian Allan Rubeli, an Ottawa engineering firm hired to help manage the headquarters project, has been paid $4.5 million. The city initially sole-sourced a contract to Adjeleian Allan Rubeli for a fee that was not to exceed $2.6 million, Kelcey's letter states.
Sheegl said the contracts are not governed by the policy that requires Winnipeg to tender consultant contracts more than $100,000 as they are not consulting contracts, but a "direct service" for project management. He said the city sole-sourced a contract to Dunmore Corporation because of its expertise in constructing football stadiums.
At the time Dunmore was hired, Sheegl said designing the headquarters was well underway and the city was working to guarantee a maximum price on construction so it would not spiral out of control.
He said AbouZeid was just completing work on the football stadium and it would've taken weeks to tender a contract and bring someone up to speed.
"I'm the chair of BBB Stadium and watched him hands-on and the great work that he did there and he comes highly recommended," Sheegl said on Wednesday, following council's last meeting of 2012.
BBB Stadium Inc. is a non-profit corporation held equally by the city, the U of M and the Winnipeg Football Club. BBB stands for Blue Bombers and Bisons.
Sheegl also clarified there was no cost overrun on engineering work and said Adjeleian Allan Rubeli completed what it was paid $2.6 million to do. The firm was also paid to complete the work a previous engineering firm did not finish because they parted ways with the city, he said.
Sheegl said the firm was paid with money already in the budget.
Finance chairman Coun. Russ Wyatt (Transcona) said he forwarded Kelcey's letter to the city auditor and confirmed the construction management contracts will be included in the ongoing city real estate audit. Wyatt said the matter will be "a priority."
Sheegl said there's nothing in the letter that needs to be further addressed, but Wyatt is well within his rights to ask auditors to look into issues he believes need to be reviewed.
Kelcey said he's glad the CAO responded to his concerns, but he still thinks officials violated tender policy. He said city administration should have been able to immediately clarify who was hired and who authorized it, and the fact auditors will review the contracts shows his concerns aren't "frivolous."
"It's not rocket science," Kelcey said. "A well-functioning government keeps track of these things to answer questions quickly -- not a day later."