Contradictory contract confusing, police HQ inquiry witness testifies By: Joyanne Pursaga Posted: 5:07 PM CST Friday, Feb. 13, 2026

A key contract for the Winnipeg Police Service headquarters project contained rules that contradicted others, sparking confusion and interfering with financial oversight, an expert witness testified.

Eleanor Andres, an expert in contract law, finished answering questions at the public inquiry into the HQ project Friday.

She noted one city document required Caspian Construction, the main contractor, to “maintain and protect all records relating in any manner whatsoever to the project” and make them available to the city. Shortly after, however, the same agreement noted that clause would exclude proprietary information and intellectual property of Caspian.

“What is in exclusion from that very expansive, comprehensive definition is what I’m unsure of,” said Andres.

She questioned how a project director could determine if Caspian received any money it shouldn’t have, if they could only rely on a portion of Caspian’s records. She said it’s also not clear if the city could demand confirmation of payments directly from subcontractors.

Concerns surrounding the police headquarters project at 245 Smith St. have plagued city council for years.

The new HQ opened in June 2016 at a cost of about $214 million, well above its original $135-million price tag. An external audit found the project was severely mismanaged.

The project’s soaring cost has triggered legal action. In 2022, a court ruled Phil Sheegl, the city’s former chief administrative officer, had accepted a $327,000 bribe from Caspian Construction’s owner and ordered Sheegl to pay compensation.

Earlier this week, Andres deemed it unusual that the city decided to reduce a $40-million performance bond to $25 million for $80 million of the redevelopment work.

“It looks like they customized the terms of the (request for proposal) to suit a particular bidder.”

On Wednesday, she responded to questions about the bond change, as well as emails between Sheegl and Caspian owner Armik Babakhanians that indicate the two planned to discuss project costs.

“It looks like they customized the terms of the (request for proposal) to suit a particular bidder,” she said.

The performance bond reflects the amount of money a construction company must put up to guarantee it can complete the work. If the work wasn’t completed, the city could cash in the bond.

On Friday, a lawyer for Caspian noted another document showed some city officials studied the bond change before implementing it. Supporters of that change expected it would allow more bidders to compete for the work, he said.

“In their determination, that would be a benefit to the city,” said George Orle.

If the city wanted that change, it should have completed it before an initial request for contractors went out, said Andres.

She also suggested some city deadlines for contractors to provide proposals for the project were extremely rushed for such a complex project.

Orle suggested a desire to accelerate negotiations could be tied to an urgent need for a new headquarters.

“We’re talking here about (replacing) the Winnipeg Police Service building … And if you were told that the walls on the building were falling down, that the parkade was no longer usable … That the police officers themselves were concerned about their security … Would those not be reasons why you may want to accelerate and try to make this request go forward as quickly as possible?” said Orle.

The inquiry will resume Tuesday, when Sheegl is expected to appear as a witness. It is expected to wrap up in mid-June.

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In an interview Friday, Premier Wab Kinew said the public probe will ensure better control over how tax dollars are spent on major city projects in the future, such as the $3-billion north end sewage treatment plant upgrade, as well as the proposed Chief Peguis Trail extension and Route 90 expansion.

“We want to make sure that your money’s going to be spent right. I’m sure there’ll be more information that will come out during the inquiry that’ll just help us get a bunch of recommendations for how (we can) build the big projects in the future in a way that’s going to bring them in on budget,” said Kinew.

— with files from Carol Sanders

joyanne.pursaga@freepress.mb.ca

X: @joyanne_pursaga

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.