Contractor’s bid made ‘no sense,’ WPS HQ project manager testifies

A key manager of the Winnipeg Police Service headquarters project raised early concerns about cost estimates proposed by its main contractor, a public inquiry into the project heard Monday.

Caspian Projects priced its construction management fee at $50,000 for the first phase of $80 million in construction work. The next lowest bid was $140,000, a document displayed at the inquiry shows.

“For the amount of work they were going to do and the number of people they claim they were assigning to the projects, you do the calculation, they’re not getting paid…. This makes no sense,” said Abdul Aziz, the HQ’s initial project manager, who now serves as director of services for WPS.

The payment would be applied to several months of work involving 4.25 full-time staff positions, which he estimated would see staff members get paid about $12.26 per hour.

Aziz said the project’s steering committee ultimately decided the allocation of resources would provide good value for the city and the contract was awarded.

By Feb. 18, 2011, eight days after Caspian was awarded that work, the contractor had made multiple complaints about AECOM, the key initial designer on the project, according to a document displayed at the hearing.

That included blaming AECOM for completing just 15 per cent of the design by that point and being two months behind schedule, the document notes. The complaints didn’t acknowledge the city’s role in those delays, said Aziz.

“It was not a fair evaluation of the situation, I believe. And right away, it felt like they just wanted to take over the design portion and direct AECOM,” he said.

He said that change would have been “a really bad idea” for such a complex project, as well as for Winnipeg Police Service operations.

The change was not made, though the city did later replace AECOM.

Problems with the headquarters project at 245 Smith St. have plagued city council for years. The building opened in June 2016 at a cost of $214 million, well above its original $135-million price tag. An external audit found it was severely mismanaged.

On Friday, Armik Babakhanians, owner of Caspian Projects, testified that internal fighting had threatened to derail the project. He said he had serious concerns about a lack of understanding about the needs of police and the complex construction requirements of the HQ.

“We were told that we were not able to go back in the building…. We were finding too many problems.”

A key problem stemmed from an effort to focus on a maximum price for the project before design and construction plans were completed, said Babakhanians.

By early 2014, Aziz said a city official informed police they were no longer allowed inside the headquarters building, which was still being completed.

“We were told that we were not able to go back in the building…. We were finding too many problems,” he said.

Aziz noted he had been replaced as project manager for the headquarters in 2011.

After police moved into the building in 2016, the structure became part of his purview again.

On Monday, Aziz was asked how the building is serving citizens and WPS now, a decade after the service moved in.

He said the structure continues to face challenges.

“Floor 1 is still an issue. It’s a serious issue that, somehow, in the near future (will) need to be resolved … It’s deteriorating. It’s just going to fall apart and there’s people below that floor and there are people around that floor…. It will be a major undertaking,” said Aziz.

He said drain leaks pose another concern, and a metal rod once burst through a ceiling and almost hit someone.

“I can certainly make a list (of the problems)… but it would be a very long list of things that we still are trying to fix.”

“I can certainly make a list (of the problems)… but it would be a very long list of things that we still are trying to fix,” said Aziz.

In 2018, the city filed a statement of claim seeking damages for alleged construction deficiencies at the headquarters from Caspian Projects and structural engineering consultant Adjeleian Allen Rubeli, claiming several problems became clear after police moved into the building.

The list of alleged issues included a deteriorating structural slab, faulty or missing waterproofing, falling concrete, roof leaks and temperature issues.

The city also launched a civil suit against Caspian and dozens of other defendants in 2020, alleging a fraudulent scheme inflated the price of the project.

While the allegations from that lawsuit and the construction lawsuit were not proven in court, city council approved a combined settlement of the claims in March 2023. As a result, the city will receive $23.5 million, if paid by next month, three years after the settlement.

If the payment is not made by March 24, the city will ask the Court of King’s Bench to order that it be paid $28 million.

Aziz also testified that the city made numerous changes to a request for proposals for construction, which also complicated the process.

“There were so many revisions it was very difficult to keep track, even for us, who were doing it,” said Aziz.

The project was initially expected to be completed, from the start of design to construction, within 3 1/2 years, he said.

“There were so many revisions it was very difficult to keep track, even for us, who were doing it.”

“That was very fast for a project this complex and (of) this size,” he said, adding he attempted to get more city officials with experience in city-led construction assigned to work on the project.

That did not happen, he said.

The inquiry is expected to continue until mid-June.

joyanne.pursaga@freepress.mb.ca

X: @joyanne_pursaga

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Joyanne Pursaga
Reporter

Joyanne is city hall reporter for the Winnipeg Free Press. A reporter since 2004, she began covering politics exclusively in 2012, writing on city hall and the Manitoba Legislature for the Winnipeg Sun before joining the Free Press in early 2020. Read more about Joyanne.

Every piece of reporting Joyanne produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.