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A new Christmas tradition - Firehall Fairy Tales by Shindico

Once upon a time...

Isn't that how all fairy tales start?
Last week construction company Shindico dispatched their talking head Bob Downs to spin a fairy tale for Christmas in which Sandy Shindleman and his brother Robert got to play the pretty princesses who need to be saved from the evil dragon, a role assigned to city auditor Brian Whiteside.

It turns out that people thinking of doing business with Shindico are asking some embarrassing questions in the wake of the audit into the fishy construction of four firehalls by Shindico. To dispel suspicions, Shindico went on the offensive, declaring their innocence, condemning the auditors for getting it wrong, and hinting broadly that they know who is behind the heat and why. Was that a threat?

It started with with CJOB's Richard Cloutier who gushed on air at getting an exclusive two-hour interview with Downs which included a "document dump" of, allegedly, the paper trail supporting Shindico's story. But the documents weren't posted anywhere, nor was there any link to the entire interview. Instead Cloutier simply regurgitated Shindico's alibi, as a quipping show host Charles Adler played Ed McMahon to Cloutier's Carson.

The rest of the news media came running, like dogs to bacon.

Unfortunately, not one reporter bothered to spend 20 minutes with the firehall audit, which is online, to see the gaping holes in Bob Downs' touching tale.

The Shindico pushback goes like this:

* Shindico won the contracts to build the firehalls fair and square. There was no favoritism. (Bwahahahaha)

* Shindico demonstrated ingenuity in coming up with its own firehall design when the one that had been accepted proved to be too expensive.

* Shindico saved Winnipeg millions of dollars

* Sandy and Robert Shindleman are the innocent victims of mean people.

Um ... so there.

Calling Mr. Grinch.

Contrary to what Shindico wants you to believe, they didn't win a single contract to build Winnipeg's four newest firehalls.

The story of how they wound up building the fire stations, without anyone on city council knowing it except perhaps the mayor, is complicated, but not impossible to follow.

The fire department looked around and found a fire station design that they liked.  Reid Douglas, deputy chief of support services with the WFPS, explained to the Winnipeg Sun (New design for fire stations, Paul Turenne, Winnipeg Sun, March 14, 2010):

"We've identified two types of stations, one for the core and one for suburban areas," Douglas said. "The suburban stations will all be the same. We're trying to build something aesthetically pleasing and that fits into the neighbourhood, rather than something that looks commercial and stands out."

"The suburban stations, designed by London, Ont.-based Murphy and Murphy Architects and modelled after a station in St. Thomas, Ont., will allow vehicles to drive in one side and out the other instead of forcing them to back in or out. They will be one-storey facilities with no basement, contain the latest technology, and be LEED Silver certified..."

Initially, the city intended the project to be a P3 -- the developer would build, own and maintain the stations and the city would lease them.  But then the city learned that firehalls would be included in federal stimulus funding. That money meant the city could afford the cost of having the stations built, and the city could own them.

Here's where it starts to get fishy. 

City officials knew in January, 2010 about the stimulus money, but still issued a tender in March for a P3.  The tender was amended part way through to scrap the P3, calling instead for bidders to build three suburban stations on the Murphy and Murphy design and to design and build a fourth station in St. James.  The amendment also called for bidders to identify land where the new stations would stand.

They only got one bid -- from Shindico, at way more ($18 million) than was budgeted ($15 million).  The tender was scrubbed with no award.

The auditors did make a note of this point:

"In responding to the original RFP, Shindico indicated that Sage Creek- Station #27 would be built on land the City was about to acquire. The information regarding the City’s intention to acquire the property in the Sage Creek development was known to Shindico but was not provided to the other proponents during the procurement process."
Here's where the real story gets even fishier.

First, the Bob Downs fairy tale version courtesy of Richard Cloutier:

"Shindico decided that they would look at the design themselves, bring on a designer, go out to London, Ontario, ask some questions---and Reid Douglas, the former fire chief, kind of introduced them to the fire people."

In a word ... nope.

The City decided to issue a tender just for a new fire station in Sage Creek. (2010 was an election year and that may have had something to do with it.) The tender was for the Murphy and Murphy design, even though Shindico,  and an independent firm that specializes in construction estimates, concurred that it couldn't be done within the city's $3 million budget.  Somebody advised Shindico to redesign the fire station, and Shindico hit the ground running.

September 2, 2010
9:51 pm
Mr. Bob Downs of Shindico (Downs) sent an email to the Current Chief WFPS
subject line “Firehalls” the email indicated:
Reid we have been asked to provide a design that we can build within your budget of $15 Million. We have started today to do that and will do all that we can to create firehalls that meet your expectations and are within your budget. We will use our consultants in the process. To that end it is important to stop spending on the London team. Their visit planned for this month should be cancelled as soon as possible. We are of the opinion that we cannot adjust the London plan to reach budget goals. Radical surgery is essential.

Who was that 'somebody' who asked?  The audit says he is "currently unknown." 

But the fire halls project was being overseen by only two people---then deputy fire chief Reid Douglas, and then deputy CAO Phil Sheegl.

Here's what Douglas told the auditors:

"WFPS and M&M were against a new design as we had concerns it would not meet post disaster requirements."
Even by substandard Manitoba mathematics that means 2-1 = Phil Sheegl.
So what happened after Sheegl interjected himself into the process?  The auditors spelled it out:
"Our concerns regarding the Sage Creek RFP process include the following:
► After the original RFP for all four stations closed, the City, via WFPS (and perhaps others), continued ongoing discussion with Shindico in advance of the Sage Creek RFP in spite of the understanding from MM that the three suburban stations would be subject to a public tender. These discussions included Shindico attending a meeting with WFPS and the architects in London Ontario, discussions on the total project budget, and the budget for the individual suburban stations. In addition, Shindico was apparently
encouraged by a City representative, currently unknown
(MC#47) (RDC#4), to develop an alternative plan.

Had the above information been made available to the other bidders for the Sage Creek RFP, and had such bidders been directed to develop alternative designs, as Shindico apparently was, the outcome of the process and ultimately who built the Sage Creek- Station #27and the related Roblin - Station #18 may have been different.

► WFPS was informed by Shindico as well as by the estimate prepared by A.W. Hooker, a firm that specializes in construction estimates, that the cost to construct the M&M design in Winnipeg would exceed the City’s budget of $3 million per suburban station. In spite of this information, the City provided the M&M specifications to bidders for the Sage Creek RFP. 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. (MC#48)
About that exclusive trip to London,'s what Fire Chief Reid Douglas told the auditors:
"Shindico went on their own as was their plan. WFPS went at the same time to ensure accuracy of discussions."
It's clear that somebody, i.e. Phil Sheegl, was greasing the way for Shindico to get the firehalls contract. 

*  In the first bid, only Shindico knew that the City was buying land for Sage Creek.

*  After the tender was scrapped, discussions continued with Shindico only, including a request for Shindico to come up with its own firehall design. 

*  No other contractor was encouraged to do its own design. 

*  Shindico went to Ontario on its own with their pre-picked construction company to suss out costs, no other contractor was told they could do the same. 

*   Only Shindico knew what the city was intending to spend on Sage Creek.
So guess what?
The City received 8 bids for the Sage Creek firehall.  Seven were on the Murphy and Murphy design and all were more than the city intended to spend.  Shindico's bid was the most expensive. But ... Shindico included a second bid.  That second bid was for its own design.  And, what a coincidence, the budget was a shade under the $3 million the City wanted to spend.   Gee, who saw that coming?
Again, the tendering process was scrubbed because none of the bids was responsive to the requirements.
But, again, discussions continued only with Shindico, this time on their design for a firehall. 

And, you guessed it, Phil Sheegl decided to single source the Sage Creek fire station with, ta da, Shindico.
After that, it was clear sailing.  No more tenders. Shindico got to build each of the other firehalls as well. 

Sheegl, meanswhile, used every loophole in the book to hand-deliver the contracts to Shindico without informing city councillors.
The question that's still unanswered is "why"?  What was in it for him?
Perhaps the search for an answer begins with those records in Arizona that show Mayor Sam Katz paying $10 for a million dollar house owned by the sister of a top executive of Shindico. He says the rest was paid in cash.

How long does it take to photocopy a cheque for $999,990? Or was it hundreds stuffed in a briefcase?
The one thing the Shindico fairy tale does, besides leaving us with the searing image of Sandy Shindleman dressed as a princess, is revive the need for a full, official, police investigation of the firehalls scandal.
The outside auditors who conducted the review on behalf of the city auditor said no laws were broken. The public would rather have that reassurance from the RCMP. 
Downs has demonstrated there are still many versions of what happened out there. We're still a long way from "happily ever after."

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