Winnipeg Free Press - PRINT EDITION

Price spiked after city cut oversight on new police HQ

Reduced scrutiny led to construction, design problems

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The City of Winnipeg vastly reduced the scope of external oversight over the construction of its new police headquarters before the budget for the project ballooned $81 million over the initial estimate.

During the summer of 2010, the city issued a search for a project co-ordinator to "manage and control all aspects" of the conversion of the former Canada Post building by placing a team of engineers at the Graham Avenue site every day until the project was finished.

After several months, the city called off this search and refused to award a contract, informing the bidders it no longer required the services described in rigorous detail in a 29-page request for proposals.

Then in June 2011, the city assigned an untendered contract to a lone project manager who was to report to the city each month under the terms of a deal described in a handful of paragraphs.

Now, one of the firms that bid for the cancelled co-ordination work says the city's decision to reduce the scrutiny over the project contributed to the design and construction problems that have driven the cost of the project up to $211 million from $130 million.

"The fundamental processes of the city seem to be screwed up. They're not looking after the interests of taxpayers," said Jack Abiusi, a principal and mechanical engineer at Tower Engineering Group.

In 2010, his firm submitted a $1.3-million bid to devote a team of four experts in a variety of engineering disciplines to the headquarters job, which involved renovations to the six-storey former Canada Post facility and a 10-storey office tower. Other companies also bid on the work.

"The request for proposals was great. The city was on the right track. They covered all the details, down to the way furniture would be moved in," said Guenter Schaub, a Tower partner and structural engineer.

"Obviously, they spent a long time producing the RFP. And then things changed to 'well, we don't need all this and the construction contractor can handle it.' Somewhere along the line, they slid away from the position they needed a project co-ordinator."

Abiusi said a project on the scale of the police-headquarters conversion requires a dedicated team of construction managers. He called the city's decision to reduce the external oversight bizarre. "The city will say we gave the work to the cheapest guy and saved the taxpayers money," he said. "Even someone who isn't in (the engineering) industry can tell you that doesn't work."

In June 2011, the city assigned a project-management contract to Ossama AbouZeid's Dunmore Corp., which has been paid $263,000 for the work to date, said a report prepared for city council's finance committee.

AbouZeid's job was to finalize a "guaranteed maximum price" contract with Caspian Projects, which was awarded the construction work, and report back to the city on the project's progress every month.

Last week, Mayor Sam Katz blamed cost overruns at the police headquarters on the "project manager" but declined to identify AbouZeid by name.

Schaub and Abiusi, however, said it would be unfair to blame AbouZeid for the cost overruns, given the vastly reduced scope of the oversight he was supposed to perform.

The City of Winnipeg was unable to respond to questions about the rationale for reducing the oversight of the headquarters project. Officials had "other pressing priorities" and were not available to answer questions about why the search for a project co-ordinator was cancelled or why AbouZeid was selected instead.

City council finance chairman Russ Wyatt (Transcona) laid the blame at the feet of former chief administrative officer Phil Sheegl.

"We're dealing with the messes created by our previous CAO," Wyatt said in an interview in which he also blamed the Winnipeg Police Service for pursuing the project. "I'd like to hear from the chief of police on this."

The police declined a request to interview Chief Devon Clunis. AbouZeid declined to comment, citing a non-disclosure agreement with the city. So did Armik Babakhanians, president of Caspian Projects.

Abiusi said no project co-ordinator would ever negotiate a "guaranteed maximum price" agreement with Caspian based on a building design that was only 30 per cent complete.

Differences between the original design prepared by the Winnipeg branch of consulting firm AECOM and a final design by Ottawa firm Adjeleian Allen Rubelli were partly responsible for $17.2 million worth of cost increases disclosed to the city in September.

Problems with the original design included a parking-garage ceiling that was too low to provide clearance for some police vehicles and interrogation rooms without secure ceilings, a report to city council said.

Exclusions to the "guaranteed maximum price" agreement and the absence of enough contingency funds were also to blame, the report said.

bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition November 8, 2013 A6

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