The external auditors who dissected the corpse of the Winnipeg Firehalls Fiasco looked for evidence of whether Shindico, the construction company owned by Mayor Sam Katz's friend and business partner, received special treatment when it got the nod to build four new fire stations.
Their audit, released to the public Monday, reveals that favoritism for Shindico permeated the whole project like stink on a skunk.
But the smoking gun doesn't appear until the end of Appendix G---three maps, one letter and two emails from the back cover.
It's a revelation by former Fire Chief Reid Douglas of a conversation he had with Phil Sheegl, who was then the Director of the Planning, Property and Development Department and Deputy CAO. Douglas, at the time, was the Deputy Fire Chief. Sheegl wasn't yet his boss; Sheegl wouldn't be confirmed as the city's Chief Administrative Officer, the most powerful man in Winnipeg, for another two years.
But both men were working together on the firehalls project. Sheegl's boss, the CAO who he eventually replaced, had given him the job of assuming "oversight of the project," as the audit put it. Douglas was ordered by his boss to "take (the) lead role on behalf" of the Firefighter and Paramedic Service.
The City had issued an RFQ---a request for qualifications -- to developers to narrow down the pool of those who were interested and able to do the job. Prospects were asked if they could design, build, finance and maintain four new fire-and-paramedic stations in Charleswood, St. James, River Heights and Sage Creek.
It was April 20, 2009. Douglas told the auditors that they were in the CAO's office when the RFQ was put out and Sheegl told him flat out, "I want Shindico to build these firehalls."
Bada bing, bada boom.
Reid Douglas, who's been painted as the ringmaster of the firehalls scandal ever since the story broke 14 months ago, told the auditors he responded,"Then, let's hope they're the low bidder, then." What a rube.
The alleged Sheegl declaration puts a whole new perspective on what happened next.
Six developers were informed they had made the cut, including, obviously, Shindico.
A month later, Sheegl, Douglas and a firefighters union rep were sent to London, Ontario to suss out firehall designs which could be used as a template for the four new stations in Winnipeg. They found one.
Early in the new year, 2010, the City issued a Request for Proposal to the six developers that had been identified. The terms of the RFP kept changing, and by the deadline only one bid had been received---from Shindico. It was for way more than the city intended to spend, $18 million for the four stations instead of the city budgeted $15 million.
Too rich for our blood, said city officials.
But by the end of June, 2010, it was a done deal---Shindico was the favoured developer on "the project." There was never another moment when anyone else was even in the running. Sheegl's alleged wish had come true. Here's how...
* Despite having its bid rejected, Shindico was given the nod from the Fire Department and the city's Material Management division to design the new St. James fire station, even though one email discovered by the auditors warned:
"We discussed the risks of direct negotiation with Shindico. Other builders could
complain that the City did not provide an opportunity to compete in a bid build
* In August, reps from Shindico and Pre-Con Builders, the construction firm they would use to build all four stations, were traveling with city officials back to London, Ontario to discuss design elements.
* On Sept. 23, 2010, the city received an official construction estimate for a fire station in Sage Creek based on the London, Ontario design. It said costs would be higher than the $3 million the city budget called for. File this information away for a second.
By this time, Sheegl was the man in charge of the city. His boss, Glen Laubenstein, had resigned as of Sept. 14, 2010. But Sheegl had been calling the shots for a lot longer, as you can see from four paragraphs up.
* On Jan. 14, 2011, the city issued a Request for Proposals for Sage Creek, based on the London, Ontario design. Remember, they had already been told it could not be built for the money the city had allotted.
* When the tender closed a month later they had eight bids in hand. All the bids were rejected. Seven because they were too high and Shindico's because it wasn't based on the London, Ontario design.
"The Bidders, other than Shindico, were not aware of the City’s $3 million budget nor were they aware of the alternate design possibility, both of which had been discussed with Shindico." states the audit report.
In short, Shindico knew the fire hall couldn't be built on the Ontario design at the price the city wanted to pay. So they didn't bother bidding, they just put in their own design to get the jump on the competition. It worked.
Don't gloss over what happened.
City officials knew in late Sept. 2010 that the Ontario design was too expensive for the Winnipeg budget. BUT they still issued an RFP for Sage Creek based on the Ontario design in January, 2011. The only conclusion is that the tender was a deliberate ploy to eliminate non-favoured developers. Anyone following instructions was sure to produce a bid that was unacceptable. And that's precisely what happened.
On March 10, 2011, CAO Phil Sheegl informed Reid Douglas that Shindico, once again the company that didn't win the tender, was getting the job.
"As soon as we commit to the alternate plan with them I’m sure we can conclude Taylor. WE ARE DOING THE ALTERNATE PLAN WE HAVE NO CHOICE otherwise all bets are off and we have no Sage Creek station and 20 firefighters for that non station approved in the 2011 operating budget."