Edgar And The 400 Furniture Audit

More on the 400 Building audit. This time the Furniture. A comparable fiasco with potential lawsuits.

How will Councillor Halberstadt justify this time not calling for a public inquiry?

What a complete farce this City has become.

The Audit Report on the Furniture for the 400 Building demonstrates that our Mayor/Businessperson/Lawyer is not immune from screw-ups under his watch for which he must take the ultimate reponsibility and blame. He cannot blame this on former Mayor Hurst as much as he would like to I am sure. The finger of blame points right at Edgar (aka Eddie)Francis since he was in charge during this time.

How can this lack of information be credible after so little time has passed OR is it like the missing 11 boxes of files on the 400 Building audit that will mysteriously show up one day. Administration is out of control. Record-keeping is a disgrace and needs improvement now:

• "The 400 CHS Tender has been significantly hampered by the unavailability of most of the key documents, for example, the essential documentation of the furniture tender evaluation and perhaps even the Tender package as issued. Accordingly, the findings, opinions and recommendations expressed in this report and the attached legal memorandum are based upon, and limited by, the facts and documents which were available for review.
  
  Administration tried, but was unable to rectify this scope limitation. Due to the passage of time, Administration was unable to locate the documents required to overcome the limitation."

Even with this caveat, the handling of this tender would have caused Edgar to resign if he had been a Cabinet Minister at the Senior Level. He would have been hounded and then destroyed during Question Period in the Commons or at Queen's Park until he submitted his letter of resignation. Imagine the Report if the Auditor had the complete files.

However, at Windsor Council, no one makes a peep and some Windsor reporters dare not rock the boat or risk their jobs in a troubled economy.

• "Eagle is the only compliant bidder under the Tender."

They did NOT get the City Furniture contract.

Where is the judicial inquiry or the police investigation after this 400 Building Furniture mess, never mind what happened on the building itself.

How can that be you might legitimately ask if there is a Tender process. Read on and weep or will mini-Gord write again as he did with the 400 Building audit:

• "400 audit much ado about nothing
  
  Nobody stole anything, and nobody screwed up any aspect of the project.
  
  So what's the big deal?"

Don’t you find it remarkable how well our Mayor has been protected from any kind of criticism with respect to the 400 building audit. Or the Furniture audit. He must have known about the problems of the Limitations Period respecting contractor claims as an example because he read the draft report before the time expired.

Oh, I understand that the building mess all happened about three quarters of a decade ago under a different Mayor and Administration and that we ought to “move on.” However, life is not that simple:

• “Eagle Office claims it was cheated of $1.6M city contract
  
  A local office supply company says it was cheated out of a $1.6 million contract for the 400 City Hall Square building and is considering legal action against the city.
  
  “I'm weighing my odds,” Paul Fields, president of Eagle Office Furniture, said a meeting Wednesday of the city’s audit committee. “I'm sitting back and looking at what EllisDon is doing. I've talked to a couple of lawyers already.”
  
  Toronto-based EllisDon Corp. has said it will decide next week whether to sue the city after an audit revealed Vindella Enterprises was unfairly awarded a contract by council in 2002 to construct the $32.5-million 400 building.”

Even in that Star furniture story, the word Mayor or Francis never appeared once!

While Edgar can legitimately say that he was not the Mayor when the 400 Building Tender went out, although he was on the Council, he was the Mayor when the Furniture Tender went out.

This is Edgar's baby. He must take responsibility as the CEO for the mess that took place in any lawsuit that may arise therefrom. It is clear from the Audit the Mayor and Council are deeply involved and must take the blame and the hit for whatever happens.

Take a look at the following comments from the Audit Report on Furniture and wonder why it was not reported: (The headlines are mine)

EDGAR AS A BUSINESS PERSON FAILED

• The City’s Purchasing department did not manage Tender 02-04. The City hired a consultant to write the furniture specifications and to oversee the administration of the Tender. The consultant drafted Tender 02-04, all specifications, instructions and bid forms, and supplied copies to the tenderers on behalf of the City...
  
  However, the work of these consultants is normally very closely coordinated with the municipality's purchasing department. Due to insufficient levels of staffing in the City’s purchasing department at the time, that close coordination did not occur in this case...
  


• The City’s Purchasing department was not involved in the furniture fit-up Tender. The entire Tender process was outsourced to a consultant. While this is not an abnormal practice, the way it was done is irregular, in that there is no contract or engagement letter on file at the City that outlines what the consultant was paid to deliver on behalf of the City.
  
  
• c) This scenario is remarkably similar to the project planning issues identified in the February 2009 Audit Report I of the 400 CHS project. The City did not appropriately plan for its furniture needs and specifications did not ensure its furniture requirements were clearly stated in the Tender document and did not assign appropriate City staff resources to oversee and protect the interests of the City.
  
  
• d) Of certain importance, current Administration has advised the AGO that in 2002, the City’s Purchasing department consisted of two individuals who had responsibility over the purchasing activity of the entire City. The staffing condition of the Purchasing department was addressed by Council and Administration, following the results and recommendations outlined in a 2003 PriceWaterhouseCoopers report prepared for the City of Windsor entitled, Control and Procedures Review of the Financial Services Function of the Corporate Services Department....
  
  
• The confusion is understandable, as there was no one on the City’s purchasing department working on the tender, and indeed, no other City staff working on it. The risk of recurrence of this situation has been addressed through additional controls in the new Purchasing By-Law 400-2004, and through additional staff within the City’s Purchasing department...We have been advised by current Administration that at that time, all of the purchasing activity for the entire City of Windsor was being conducted by only two persons...
  
  
• Perhaps due to the significant level of confusion among Administration throughout this project, and certainly due to the many errors that took place (some unknown to Administration at that time), the Purchasing Manager that addressed the issues at Council was provided with some information that was not accurate or factual. However, having no history on the project,what the Purchasing Manager reported to Council was based on this incorrect information.

EDGAR AS A LAWYER FAILED

• The Tender Document Issued by the City was Unclear and Caused Confusion
  
  There were many contradictory statements within the Tender Bid Package issued by the City that caused confusion among both bidders and those evaluating the bids with regards to how the City would award the parts of Tender 02-04.

THE FED TAIL WAS ALLOWED TO WAG THE CITY DOG

• As early as September 12, 2003, the City was aware of a PWGSC budget expenditure and timing constraint that would affect the project fit-ups. PWGSC advised the City, in an email, that PWGSC had received direction to purchase furniture screens by March 31, 2004. PWGSC was to ensure purchase and possession of the furniture screens occurred by that date, or PWGSC would be at risk of forfeiting the funding...
  
  
• The City did not issue the Tender until January 16, 2004... almost a month late... We were unable to find documentation to explain the change in date the Tender was issued...
  
  
• On February 2, 2004, the day before Tender 02-04 closed, Administration reported (Council report 10006):
  - “PWGSC had advised Administration that the funding for expenditures within their fit up program is extremely time sensitive and subject to being lost if not expended within any given federal government fiscal year end of March 31.
  
  - The Council report was not clear in disclosing the fact that Administration had been advised of the urgent action PWGSC would have to take, unless the City itself moved quickly, on September 12, 2003."
  
  [The Feds' budget need effectively was allowed to run the process to Windsor's detriment and the City's failure to act in a timely fashion compounded the problem]

EDGAR AND COUNCIL KNEW OF PROBLEMS

• In a letter dated February 9, 2004, Eagle sent a lengthy letter to Mayor Francis. Among other things, Eagle complained about the treatment of Tayco and its apparent disqualification for not meeting specifications. Eagle made no mention of its own bid although it was clear that Eagle felt it was wrong on the part of the City to award a contract to Monarch when Tayco provided a lower price. Eagle does not mention the bid of Mayhew which is lower than the bid submitted by Tayco. [And what did the Mayor do about this?]
  
• The City’s Choice To Award “Part C” of Tender 02-04 to Monarch
  
  a) May 30, 2005: Over a year after Part A of Tender 02-04 was awarded to Monarch, the City’s Purchasing department stepped in to complete the process – to deal with Part C, the City’s furniture needs.
  
  b) On May 30, 2005 the City’s Purchasing Manager, along with the Corporate Projects Manager, attended an in-camera meeting of Council to explain the issues to date, the errors made by the City and to recommend future action to deal with the City’s furniture needs...
  
  Monarch was not the lowest bidder for Part C of Tender 02-04. However, Purchasing made the recommendation [To Council] to award Tender 02-04 to Monarch for justifiable business reasons, including, but not limited to:
  
  “With the permission of the Chair of the Steering Committee, Administration met with …Monarch…to discuss this option. …During these discussions it became clear…that Monarch had clearly been told by City representatives that it had been awarded Part C of the contract.” (Monarch had, acting on reasonable expectations, incurred other expenses & developed plans in preparation for the contract) [NOTE: EXCEPT, the Star reported that Fields of Eagle "complained he had the lowest bid under C — and even received a letter indicating he was the successful bidder. But his C bid was lumped together by city decision-makers with his other bid on A and B, no longer making him the lowest, he said." It would ber interesting to know who signed that letter and what the consequences are of that]...
  
  
• In the May 30, 2005 in-camera report, the Administration limited financial comparison to the bids received from Eagle, Monarch and Inscape. The report stated a cost savings of $47,547 would have been achieved – If Eagle had been chosen over Monarch...
  
  
• In a report to Council May 30th, 2005, administration recommended that a contract be executed with Monarch to purchase the furniture specified in Part C at the price originally bid by Monarch in February of 2004. According to the report, Monarch offered the best combined price (Part A and Part C) among all bidders. When the award was made to Monarch for Part C, the City was well aware that other bidders had offered significantly lower pricing for the Part C furniture only – though for a different manufacturer. "

CONSEQUENCES OF FAILURE

• The City did not scope out/develop specifications for building Fit-Ups for the part of the space being occupied by the City or for its own office furniture needs. The result was a negative budget variance of $1,792,955 or 47% over budget on this item
  
  
• Further, the City breached the “bidding contract” with the bidder which submitted a compliant bid (Eagle) when it awarded the contract for Part A to a bidder – Monarch –which had submitted a non-compliant bid. Bidders which submit non-compliant bids do not have the “bidding contract” with the City. Non-compliant bids should be disregarded, not accepted.
  
  
• Part C of the furniture tender was awarded to Monarch, even though it did not submit the lowest Part C bid...the AGO can only speculate that the potential savings could be somewhere between $47,547 and $179,211..
  
  
• Thus, Council approved piggybacking a new contract onto another contract that it had
  not yet approved. Council was not advised that the Purchasing By-Law did not permit
  piggybacking the WPS contract onto an unapproved contract.
  
  
• The actions of the City affected the City’s goodwill with the Tender Proponents, which damage the City’s ability to attract quality proponents to participate in future Tender and RFP calls.
  
  
• The City evaluated the bids received as though the bid documents did reflect the four issues mentioned above. In doing so, the City breached its implied obligation under the “bidding contract” to treat all bidders fairly and evenly. Further, the City breached the “bidding contract” with the bidder which submitted a compliant bid (Eagle) when it awarded the contract for Part A to a bidder - Monarch – which had submitted a non-compliant bid. Bidders which submit noncompliant bids do not have the “bidding contract” with the City.
  
  
• With respect to the award of a contract for WPS, the City did not follow by-law 9-2000 and sole sourced the furniture purchase to the supplier awarded the contract for Part A, namely Monarch.

THE LIMITATIONS PERIOD SCANDAL

• (iv) What Are the Implications of Making the Issues Respecting the Tender Public?
  The issue is one of risk management. The City will have to assess the likelihood that any of the bidders will take action against the City. If the assessment is that there is no serious chance of a bidder taking action (keeping in mind that only one bidder can recover substantial damages), then the report may be made public, from a purely legal perspective. If the City is concerned that one or more bidders will bring an action against the City, then the City may consider either redactions from the report or preserving the report as an in camera document.
  
  The City should consider not making the report on the Tender public at all. Owner errors in running bid processes – stemming from a lack of understanding of the “bidding contract” – are very common. The difficulties with the Tender do not involve any form of outside interference with the process. Canada obtained the furniture it wanted from the lowest pre-qualified bidder (although not necessarily the lowest compliant pre-qualified bidder). [In other words, hide from the public the fiasco! Why bother having audit reports and accountability if it is all to be hidden if there are problems.]

Do you see what I mean? Edgar should be called upon to explain how things got out so far out of control under his stewardship of this City including while he was a member of Council.

I hope someone from the citizens who will be speaking at Council on Monday about the audit will demand accountability through an outside party.