A veteran city procurement official has revealed that she received instructions to reduce the bond amount for bidders competing for the contract to construct the Winnipeg Police Service’s new headquarters over ten years ago. Despite expressing concerns about the increased risk to the city, Barb D’Avignon disclosed this information during the opening day of the inquiry into the procurement and construction of the problematic project that dates back to February 2008.
During the inquiry session, it was disclosed that the bond amount for the project was slashed to $25 million following objections to the initial higher sum, including feedback from an official associated with Caspian Construction, the eventual winning contractor for a significant portion of the project work. D’Avignon, upon being questioned by inquiry counsel Heather Leonoff, highlighted the uncommon nature of the $25-million bond for an $80-million contract, categorizing it as a medium to high risk for the city compared to lower-risk alternatives.
In 2008, the Winnipeg Police Service initiated plans to relocate its headquarters from the now-demolished Public Safety Building to a former Canada Post office complex on Graham Avenue. The city council approved the purchase and renovation endeavor in 2009 with a budget of $135 million. However, by the project’s completion in 2016, the expenses had surged to $214 million due to construction delays, alterations, and flood-related damages.
The project encountered legal challenges, including civil lawsuits, external audits, and a protracted RCMP probe into fraud and forgery that commenced with an investigation at Caspian Construction’s offices. Although the RCMP investigation concluded in 2019 without any charges, it uncovered details that led the city to pursue legal action against Caspian’s principal and a former city administrative officer for corrupt practices. Subsequently, both individuals made financial settlements with the city.
Email correspondence presented during the inquiry indicated concerns about the project from various angles, including a message from the former city administrative officer urging resolution amidst potential escalations and expressions of gratitude from the contractor. The inquiry also delved into the project’s cost overruns, with testimony from city finance official Jason Ruby outlining the financial discrepancies.
Further witness testimonies are scheduled, including insights from contracts expert Eleanor Andres and a representative from PCL Construction, a company that lost the bid to Caspian for the police headquarters project. Former Mayor Katz is also expected to testify, despite not being directly implicated in the legal proceedings. The inquiry, spearheaded by labor lawyer Garth Smorang, was initiated in response to public concerns regarding the project and aims to address issues surrounding the construction of large publicly funded ventures. Scheduled to run until June, the inquiry seeks to restore public confidence in the city’s capacity to manage such projects effectively.