July 16, 2018

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Sued firm wins another job

City awards $16-M contract, despite claiming shoddy work

Hey there, time traveller!
This article was published 29/1/2016 (898 days ago), so information in it may no longer be current.

An engineering consulting firm sued twice by city hall in the past two years for its allegedly shoddy design work and project mismanagement at sewage- and water-treatment plants has been awarded a multimillion-dollar contract to oversee upgrades to yet another city sewage-treatment plant.

AECOM was recently awarded a $16-million contract to act as the city’s advocate for the design-build stage of the $570-million upgrade to the North End sewage-treatment plant and to assume the role of consultant for the design-bid-build stage of the project.

The city had issued a request for proposals for the North End facility in April, and records show the city was reviewing AECOM’s eligibility for the project in late November while the legal department was preparing a lawsuit against the firm at the same time.

The city filed legal action against AECOM on Dec. 7 over serious design and structural problems that have developed at the Deacon water-treatment plant. The company was awarded this contract a month later, on Jan. 6.

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Hey there, time traveller!
This article was published 29/1/2016 (898 days ago), so information in it may no longer be current.

An engineering consulting firm sued twice by city hall in the past two years for its allegedly shoddy design work and project mismanagement at sewage- and water-treatment plants has been awarded a multimillion-dollar contract to oversee upgrades to yet another city sewage-treatment plant.

AECOM was recently awarded a $16-million contract to act as the city’s advocate for the design-build stage of the $570-million upgrade to the North End sewage-treatment plant and to assume the role of consultant for the design-bid-build stage of the project.

The city had issued a request for proposals for the North End facility in April, and records show the city was reviewing AECOM’s eligibility for the project in late November while the legal department was preparing a lawsuit against the firm at the same time.

The city filed legal action against AECOM on Dec. 7 over serious design and structural problems that have developed at the Deacon water-treatment plant. The company was awarded this contract a month later, on Jan. 6.

AECOM was also named by the city in a 2013 suit after significant structural problems emerged following a $47-million upgrade to the West End sewage-treatment plant. That suit against AECOM, and several other firms, was dismissed in November.

An urban politics consultant said the city’s decision to hire AECOM now is "absurd."

"It does look a little more than awkward," said Brian Kelcey, a one-time adviser and political staffer to former mayor Sam Katz and now a Toronto-based consultant.

"You’ve got a company facing a lawsuit from the city for allegedly poor or incomplete or shoddy work on a water-treatment plant and then literally days later, the same firm is awarded a $16-million contract to do very similar work."

Kelcey said city hall should never have put itself in such a situation, adding other governments have avoided the dilemma of working with a firm they’re also fighting in court by putting policies in place to prevent such a situation.

CAO Doug McNeil told members of council in an email Friday Mayor Brian Bowman and members of his executive policy committee were informed of the contract award to AECOM in early January.

A spokesman for Bowman said he had been assured the decision to hire AECOM by McNeil adhered to the city’s procurement procedures and processes.

The city administration defended the decision to hire AECOM, explaining it was judged to be the best of two firms competing for the job, and the work required for the North End sewage plant is different than the work that is the subject of the current and previous lawsuits.

McNeil said the city will keep a closer eye on AECOM than was done in the past.

"I want to assure you that we are confident in (AECOM’s) ability on this project and have tighter processes in place to monitor the work being done," McNeil said in a statement given to the Free Press. "The award of this contract followed all of the city’s public procurement procedures and processes, which are fair, competitive and without prejudice... AECOM was selected because they had the highest-rated proposal based on the evaluation criteria."

Coun. Ross Eadie, a member of the water and waste committee, said he doesn’t understand why the administration would award a contract to a firm that’s repeatedly alleged to be unable to do the job.

"We have a history with this firm at two plants already, so why we would we hire them to be involved in a third?" Eadie (Mynarski) said. "The lawsuits say our administration doesn’t have confidence in this firm so why would we hire them again?"

In its December lawsuit, the city alleges AECOM — one of several design and construction firms involved in the construction of the $300-million water-treatment plant — breached several conditions of its design-consulting contract and terms of the construction-manager contract.

The allegations have not been proven in court and a date for trial has not been set. AECOM has not filed a statement of defence.

The 2013 lawsuit stemmed from AECOM’s role designing a major component of a biological nutrient-removal upgrade project at the West End sewage-treatment plant, located at the southwest corner of Wilkes Avenue and the Perimeter Highway — work similar to the upgrade project planned for the North End plant.

The 2013 suit was thrown out in November after it appears city lawyers bungled the statement of claim.

The judge said the city failed to include the contract with AECOM; failed to show the firm’s contractual obligations and how the contract was allegedly breached; and whether the defects in the plant were caused by the breach of contract or breach of duty of care.

Kelcey said the fact the city received only two bids for this project demonstrates the city’s failure to attract more bidders and the industry’s suspicions of city hall and its administration.

"The industry outside the city doesn’t think there’s much of a chance of getting a contract so when there is an opportunity, they don’t bother," said Kelcey, who was the project manager for the city’s Red Tape Commission in 2004 that looked at the bidding process. "That implies an awful lot of things.

"If they don’t have more (than two) bidders, there’s no point in having a bidding process. You can have policies, but are they the right policies when you end up giving a $16-million contract to a company you are suing in court?"

Kelcey said the problem the city faces is the result of a perception city hall is too cosy with local design and construction firms and it makes little effort to attract bids from competitors across Canada or the United States.

"One of the problems Winnipeg has, as a city, the gene pool of vendors for design work and engineering and construction work is just big enough that you get a bit of competition but small enough that it’s not optimal competition," Kelcey said. "Injecting one or two more companies into every bid from the outside may make some local players nervous but will also get much better and more competitive results for the city."

Kelcey recommended three steps to avoid the city’s current situation: stipulations in its bidding policy that precludes the awarding of a contract to a firm involved in a legal dispute with the city; a real effort to attract outside bidders; and appointing a project manager to oversee all major capital projects and to avoid similar situations.

Kelcey said Bowman recently created the post of chief project management officer, filled on an interim basis by the former director of the water and waste department, Barry MacBride, that could prevent similar situations in the future.

He said having an individual experienced with managing major projects is essential to ensuring council receives the proper advice on project-management decisions.

aldo.santin@freepress.mb.ca

 

Aldo Santin

Aldo Santin
Reporter

Aldo Santin is a veteran newspaper reporter who first carried a pen and notepad in 1978 and joined the Winnipeg Free Press in 1986, where he has covered a variety of beats and specialty areas including education, aboriginal issues, urban and downtown development. Santin has been covering city hall since 2013.

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