Back in November 2013 the media covered how Shindico was paid $804,375 for "due diligence" work on the new Police Headquarters. 

But what I didn't see explained in the news was how Shindico was chosen for the work. 

In this previous blog post I drilled down into that aspect further. Since that time I have a bit more information to share...

The City indicated Shindico was given the $804,375 contract as the firm ranked the highest in a 2008 Request for Qualifications (RFQ) for real estate work. In short, back in 2008 the city asked the real estate community to bid in with rates for what they would charge to help the city sell properties. They city then ranked each firm based on their bids for selling properties and noted their submissions would be used to hand out contracts over the next two years.

However, as the mayor noted in this Metro News article, the $804,375 contract wasn't for helping the city sell a property, it was for due diligence work when the city acquired the property:

“The due diligence, they did all of that. They also organized all of the professionals, the engineers, the architects, etc., to do all of the work that had to be done,” said Katz following the meeting, adding that Canada Post used a brokerage firm as well.

The Winnipeg Free Press noted:

Shindico was also brought in to "ensure the deal was handled properly," Ruta said, adding the company carried out due diligence on inspections involving other consultants.

One of the reasons why the mayor was asked about the payout was the fact former CAO Phil Sheegl had been credited with convincing Canada Post to sell the building to the city instead of putting it on the market.

If you look at the documents for the 2008 RFQ you'll see the city did note they wanted help with a variety of real estate functions:

“Further to D2.1 the Work may include acting as a buyer agent, listing agent, site evaluation, due diligence, and marketing of Commercial Properties or any other related type of Work as specified by the Contract Administrator or designated representative.”

The city previously tried to use that clause to cover their butts for the property management contracts that were given to Shindico but later cancelled. While the description of work notes 'other' activities, if you look at the section of the bid documents that describe what information applicants should provide, it only mentions submitting rates for selling properties:

“The Applicant shall provide their proposed fee schedule which will include their anticipated commissions on Commercial Properties sold for the City.”

Now comes the new information. There were nine firms that responded to that 2008 RFQ. Of the nine firms that provided bids, eight provided commission rates for selling properties and one provided commission rates for selling properties and site evaluation work. See page four of this report from the Ombudsman's office - click here.

It should be noted that it's not known which firm was the only one to provide a bid for evaluation work. However, I think it's clear the city should have tendered out the $804,375 contract separately to potentially get a better rate. After all, we're not talking about a small contract and the 2008 RFQ documents did include an escape clause - "The Request for Qualification does not commit the City to award any contracts"...

UPDATE: A freedom of information response came in today that notes only one firm provided a bid in 2008 that included its rate for "due diligence" work (the Ombudsman report looked at "site evaluation" work whereas this FOI used the language "due diligence" work). To view the FOI - click here.