City criticized for signing towing deal with company it’s suing Companies still eligible to bid on contracts when facing court allegations By: Joyanne Pursaga Posted: 6:26 PM CDT Tuesday, Aug. 6, 2024

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This article was published 06/08/2024 (794 days ago), so information in it may no longer be current.

The City of Winnipeg has awarded a new contract to a towing company it is suing for allegedly overcharging the municipal government by $1.1 million in the past — and that decision is sparking questions.

“I’m not comfortable with it at all… I question the actual awarding process,” said Coun. Janice Lukes, chairwoman of the public works committee.

On Aug. 2, the city awarded Tartan a contract to tow and store vehicles until at least June 30, 2025, with up to four optional one-year extensions.

The winning bidder is expected to complete tows at the request of the Winnipeg Police Service, such as in cases of impaired, unlicensed or suspended driving, among other violations. The police service referred all questions about the contract to city officials.

In 2023, the city sued Tartan, alleging it had paid the company $1,115,626 between 2016 and 2022 for “invalid” tows Tartan either did not perform or recorded improperly.

The allegations have not been proven in court.

“It makes no sense.”–Coun. Janice Lukes

Lukes (Waverley West) said companies facing allegations from the city are eligible to bid on city contracts.

“We cannot restrict people from bidding on a contract if they’re not (found) guilty of anything. Where do we draw the line?” she said.

Lukes said she is also looking for answers on why three bidders for the work offered such different prices, as per city documents, including a Dr. Hook Towing bid for $113,600.50, a Bison Towing bid for $14.70 and Tartan’s winning bid for $18,480.

“It makes no sense. It wasn’t flagged as odd, which again concerns me… I’m still getting to the bottom of this,” said Lukes.

She said officials who awarded the contract are not required to provide written reasons for the decision, such as why they didn’t select the lowest bid.

“I don’t like that. There’s no accountability behind that at all,” said Lukes.

Mayor Scott Gillingham stressed Tartan remains eligible to bid on city contracts and all contractors should expect to be closely monitored.

However, Gillingham said he understood why questions have emerged about the award.

“I can certainly appreciate how the public would wonder why we would award a contract to a company that we’re in court with… There’s a limited number of towing companies in the city and only a small number of bidders for this contract, so we have to maintain the competition,” he said.

The mayor said he will speak to the city’s interim chief administrative officer about whether the city should disclose more information when it spends taxpayer dollars on private contracts.

“These are public dollars… being allocated and expended here, so the public should have access, and councillors should have access, to the reasons behind decisions,” he said.

Masood Khan, chief financial officer of Bison Towing, said his company was told verbally that city officials found it wasn’t ready to handle the work. Khan said the company priced its bid at the rock-bottom price of $14.70 because it expected to earn money from additional fees paid by vehicle owners throughout the contract.

He said Bison has operated for less than two years but met all contract requirements.

“We are disappointed. We put a lot of effort into this… We built a yard, we did everything, we did fencing. We did all we could,” said Khan.

Zakria Shoaib, Bison’s director, said he doesn’t understand why the contract would go to a company that’s engaged in a legal dispute with the city.

“Knowing the fact that the city has sued someone and they have counter-sued them back and are (still) doing business with each other… it is kind of confusing,” said Shoaib.

”It’s caught everybody by surprise”–Nick Roscoe, owner of Dr. Hook Towing

Nick Roscoe, owner of Dr. Hook Towing, said his company’s bid was notably higher than the others because it aimed to factor in future fuel, insurance and wage costs, since the contract could last for years.

“If you have that contract for an extended period of time, one must calculate what could happen,” said Roscoe.

The business owner said he didn’t expect the contract would be won by a company that’s being sued by the city.

“I think it’s caught everybody by surprise… It’s not necessarily our place to say the city should or shouldn’t (do this), but at the end of the day, they did and now it’s public knowledge what they did. I think it’s a tough pill for everyone to swallow, not just the industry,” said Roscoe.

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In an email, a city spokesman confirmed the award and the prices each bidder had submitted for the work. Spokesman David Driedger also noted the city lawsuit does not ban Tartan from bidding on city contracts.

“In order to prevent a person or company from bidding on city contracts, they would need to be debarred under… the city’s purchasing policy. Debarment is a structured process with definite causes and steps, and it is completely distinct from litigation,” wrote Driedger.

Tartan Towing declined to comment on Tuesday. In a statement of defence last year, the company denied the city’s legal allegations and argued the municipal government should pay damages to the company for breaching its contract.

joyanne.pursaga@freepress.mb.ca

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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.