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MIKAELA MACKENZIE \/ FREE PRESS<\/p>\n
Forensic accountant Victor Neufeld <\/p>\n
Neufeld testified that his review shows that Caspian Projects, the company that was handling the construction of the Winnipeg Police Services headquarters, submitted invoices that included $45 million to $50 million in overcharges. Neufeld said the construction company made \u201cmultiple material financial misrepresentations.\u201d<\/p>\n
The result? \u201c(It appears) Caspian\u2019s project costs were reported to the city at amounts that were higher than they were, resulting in excess claims.\u201d In one instance, Neufeld estimated the company claimed $24.4 million for concrete and demolition work, but only $5.4 million was connected to identified costs that Caspian had incurred. The other $19 million, in Neufeld\u2019s professional opinion, was excess costs added onto the bill.<\/p>\n
There has already been testimony that other parts of Caspian\u2019s bid that didn\u2019t make sense, where the bid apparently lowballed management fees with a financial number that couldn\u2019t cover project expenses.<\/p>\n
\u201cFor the amount of work they were going to do and the number of people they claim they were assigning to the projects, you do the calculation, they\u2019re not getting paid\u2026. This makes no sense,\u201d said Abdul Aziz, the HQ\u2019s initial project manager, testified last week.<\/p>\n
Major construction firms doing government work will sometimes candidly admit that they view winning a bid is only a barebones starting point for what they expect a job to cost, and that they expect to have the ability to make up lowballed expenses somewhere down the road on things like change orders and claims of increased material and construction costs.<\/p>\n
But unsupported expense claims of $45 million to $50 million seem far beyond the range of recouping costs somewhere else.<\/p>\n
Especially because the police HQ was still having problems after construction was supposedly complete. Among the things identified after construction was complete were a deteriorating structural slab, faulty or missing waterproofing, falling concrete, roof leaks and temperature issues.<\/p>\n
Caspian is supposed to be making a settlement payment of between $23.5 million and $28 million dollars after the city launched a lawsuit in alleging fraud and construction deficiencies, but that payment hasn\u2019t come yet.<\/p>\n
You can understand why city council would like starting bids, especially on major projects, to be as low as possible, even if those bids don\u2019t represent the true final cost of the work \u2014 lower costs mean projects are, quite simply, more palatable to taxpayers.<\/p>\n
But municipal coffers shouldn\u2019t be a gravy train for construction companies \u2014 and bids shouldn\u2019t always involve expensive post-signing increases.<\/p>\n
\n\t\tWinnipeg Free Press | Newsletter\n\t<\/p>\n
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Especially for costs that don\u2019t seem to have been meaningfully verified in any way.<\/p>\n
It just makes the whole bidding process look like a joke.<\/p>\n
The police headquarters inquiry will continue, but it\u2019s already clear from what\u2019s come out already \u2014 and subsequent municipal projects with absolutely eye-popping cost overruns \u2014 that there has to be a change in the process.<\/p>\n
Clearly, there has to be much more robust review of original bids to ensure that they truly represent the costs of projects \u2014 so taxpayers don\u2019t bear the brunt of endless cost increases \u2014 along with stringent review of the work done, and of the bills being submitted.<\/p>\n
Period.<\/p>\n","protected":false},"excerpt":{"rendered":"It\u2019s very much mid-stream at the inquiry into the construction of the Winnipeg Police Service headquarters. And because…\n","protected":false},"author":2,"featured_media":529265,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[194296],"tags":[49,48,22073],"class_list":["post-529264","post","type-post","status-publish","format-standard","has-post-thumbnail","category-winnipeg","tag-ca","tag-canada","tag-winnipeg"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/529264","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=529264"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/529264\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/529265"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=529264"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=529264"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=529264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}