‘Troubling patterns’: traffic infrastructure contracts keep city transportation division in spotlight

Questions are being raised on how the City of Winnipeg handles tenders for traffic infrastructure, following a Free Press analysis of underground wiring contracts dating back more than a decade.

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Questions are being raised on how the City of Winnipeg handles tenders for traffic infrastructure, following a Free Press analysis of underground wiring contracts dating back more than a decade.

A single local construction firm was awarded the annual contract over a period of 14 years — a stretch in which the city only received a second bid on the work on two occasions.

During a six-year stretch (2010-15) — the only ones for which the municipal government has proactively released financial records for — the price tag for the work spiked after the contract was awarded, coming in 73 per cent higher annually than projected by the winning bid.

JOHN WOODS / WINNIPEG FREE PRESS

Questions are being raised on how the City of Winnipeg handles tenders for traffic infrastructure, following a Free Press analysis of underground wiring contracts dating back more than a decade.

Barry Prentice, director of the University of Manitoba Transport Institute, said the city’s pattern of awarding significant contracts without receiving multiple bids is concerning, as are the discrepancies between the winning bids and the final price tag for 2010-15.

“Either (the city is) very poor at estimating their projects or they’re very lax at enforcing their contracts. Or the third option is they don’t know what they’re doing, so they get halfway through and they realize, ‘Oh we’ve got to change everything,’” Prentice said.

“In any kind of normally functioning business, no one would put up with such management, and why it seems to be OK in the civil service is a puzzle to me… They’re troubling patterns and the public deserves to have them explained.”

RUTH BONNEVILLE / WINNIPEG FREE PRESS FILES

Barry Prentice, director of the University of Manitoba Transport Institute, said the city’s pattern of awarding significant contracts without receiving multiple bids is concerning.

Harris Holdings Ltd. was subcontracted by the city for underground wiring work on traffic infrastructure every year from 2004 to 2017. Only in 2009 and 2017 did the city receive other bids on the work.

In both 2018 and 2019, a second firm, Black & Macdonald, was hired by the city to perform a portion of the work alongside Harris Holdings.

On Tuesday, Eton Harris, president of Harris Builders, Managers and Consultants, told the Free Press in a written statement his firm was precluded from “commenting on our contract with the media without the city’s written approval.”

The work patterns of the transportation division of the public works department have been under the municipal microscope since a Free Press investigative series — “Red Light, Green Light, No Oversight” — was published in February.

The series was based on the findings of independent traffic researcher Christian Sweryda, who alleges the department has engaged in a widespread pattern of wasteful work practices.

Sweryda’s findings sparked a call for an investigation from Coun. Matt Allard (St. Boniface), who chairs the public works committee. The resulting report from outgoing city auditor Bryan Mansky will be formally introduced at Wednesday’s meeting of the executive policy committee.

Mansky’s report, which notes “the work performed (for) this project does not constitute an audit conducted in accordance with generally accepted government auditing standards,” found the department did not have written documentation to back up its work patterns.

Instead, the department relied upon “verbal rationale” from current staff to dispute Sweryda’s findings.

“Either (the city is) very poor at estimating their projects or they’re very lax at enforcing their contracts. Or the third option is they don’t know what they’re doing, so they get halfway through and they realize, ‘Oh we’ve got to change everything,’”–Barry Prentice, director of the University of Manitoba Transport Institute

The investigation also found the transportation division has yet to put in place an asset management plan — something first flagged as a cause for concern, alongside poor record keeping practices, when the department was last audited more than a decade ago (2010).

Higher and higher

Every year from 2004 to 2019, local construction firm Harris Holdings Ltd. was awarded a contract by the City of Winnipeg for the “installation of underground traffic signal services and associated works.”

During the vast majority of those years, the city chose to award Harris Holdings the contract despite not receiving a second bid during the procurement process.
The only years for which the city has released financial records for the work in question 2010-15.

Every year from 2004 to 2019, local construction firm Harris Holdings Ltd. was awarded a contract by the City of Winnipeg for the “installation of underground traffic signal services and associated works.”

During the vast majority of those years, the city chose to award Harris Holdings the contract despite not receiving a second bid during the procurement process.
The only years for which the city has released financial records for the work in question 2010-15.

  • In 2010, Harris Holdings won the contract with a bid of $628,730. The work ended up costing taxpayers $867,150 — a price tag 37 per cent higher than the bid.
  • In 2011, Harris Holdings won the contract with a bid of $778,675. The work ended up costing taxpayers $1,432,130 — 83 per cent higher than the bid.
  • In 2012, Harris Holdings won the contract with a bid of $535,825. The work ended up costing taxpayers $1,365,940 — 154 per cent higher than the bid.
  • In 2013, Harris Holdings won the contract with a bid of $833,930. The work ended up costing taxpayers $1,338,675 — 60 per cent higher than the bid.
  • In 2014, Harris Holdings won the contract with a bid of $871,350. The work ended up costing taxpayers $1,373,384 — 57 per cent higher than the bid.
  • In 2015, Harris Holdings won the contract with a bid of $1,011,475. The work ended up costing taxpayers $1,519,175 — 50 per cent higher than the bid.

A Free Press review of procurement policies for the City of Hamilton reveals that Ontario municipal government declines to award contracts above a certain monetary threshold unless it receive a minimum of three bids.

A City of Winnipeg spokeswoman said Tuesday the contracts awarded to Harris Holdings Ltd. cannot be considered “single-sourced” — despite the fact from 2004 to 2008, and again from 2010 to 2016, the city awarded contracts to the firm without receiving competitive bids from other companies.

“The annual contracts… have always been awarded by solicitation of competitive offers… For each of the years in question, Harris Holdings Ltd. was either the sole bidder or the lowest bidder,” the spokeswoman said in a written statement.

“Regarding the cost differences between bid submissions and overall final costs, it is important to note that exceeding the initial anticipated cost of a contract is not uncommon as scope of work and project needs change… The costs of each contract directly reflected the needs of the branch at that time.”

The Free Press requested the City of Winnipeg provide financial records for the work performed by Harris Holdings Ltd. for 2004-09 and 2016-19, so it could be compared to the price of its winning bids.

A city spokeswoman said the records could not be produced by deadline.

RUTH BONNEVILLE / WINNIPEG FREE PRESS FILES

Christian Sweryda presents his case about the misuse of public funds on replacing traffic lights at Winnipeg City Hall in March.

The Free Press also submitted a series of freedom of information requests seeking those records.

“Obviously, somebody is not doing their job. When you look at the (auditor’s report), it’s good to see management agree with those recommendations.”–Robin Speer, Prairie director of the Canadian Taxpayer Federation

In response, the City of Winnipeg requested processing fees of $2,880, while also noting the release of the records would be delayed due to the ongoing “audit” of the department.

Robin Speer, Prairie director of the Canadian Taxpayer Federation, said the entire situation should be concerning to Winnipeggers.

“Obviously, somebody is not doing their job. When you look at the (auditor’s report), it’s good to see management agree with those recommendations,” Speer said.

“But concerns over lack of documentation were cited over a decade ago. What’s been happening in the interim?… A kid who is in Grade 12 now was in kindergarten 12 years ago, and the traffic signals branch’s processes are still not in place.”

MIKAELA MACKENZIE / WINNIPEG FREE PRESS

Sweryda’s findings sparked a call for an investigation from Coun. Matt Allard (St. Boniface), who chairs the public works committee.

Sweryda, the independent researcher whose findings first brought these concerns to light, said he hopes to speak at Wednesday’s EPC meeting and call for a more in-depth investigation.

That sentiment was echoed by Allard in a written statement sent to the Free Press: “I believe that further action is needed to determine whether or not tax dollars have been respected.”

ryan.thorpe@freepress.mb.ca

Twitter: @rk_thorpe

Ryan Thorpe

Ryan Thorpe
Reporter

Ryan Thorpe likes the pace of daily news, the feeling of a broadsheet in his hands and the stress of never-ending deadlines hanging over his head.

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