Legal contracts expert testifies in day 2 of WPS HQ construction inquiry

Wednesday was Day two of the public inquiry into the WPS headquarters construction project, and once again, questions arose about how Caspian Construction was awarded the contract bid, and former CAO Phil Sheegl’s involvement in the process.

It was found in 2022 by a judge in a civil suit that Sheegl accepted a $327,000 bribe by Caspian to help them win the contract.

“It looks like they customised the terms of the (request for proposal) to suit a particular bidder,” said Eleanor Andres, a legal expert.

Andres, who’s listed in the proceedings as a contracts expert, was presented as evidence a series of emails between Sheegl and Shaun and Amrik Babalhanians of Caspian, offering to prep them prior to meeting with the City about the bid. 

It was noted that Sheegl was not part of the evaluation committee.

Heather Leonoff, the commission’s counsel asked Andres about the appropriateness of somebody not on the evaluation committee preparing the person that’s coming in for a meeting with the questions they will be asked.

“I consider that to be entirely inappropriate, it’s fine for the evaluation committee to raise questions, but I would say no one else should be,” Andres responded.

For the second day in a row, Leonoff brought focus to the City’s decision to lower the contract bond requirement from $40 million to $25 million, allowing more small contractors like Caspian a chance at the bid, despite warnings from purchasing manager Barb D’avignon.

Andres testified that the standard is to set the bond at 50 per cent of the construction price, which in this case was $80 million.

“It’s highly unusual,” Andres said, when Leonoff asked about the flat fee of $25 million for an $80 million contract.

Andres did note she doesn’t believe that the decision to lower the bond price violated common law principles, because owner does have total control over what the contract should be.

On Thursday, former Mayor Sam Katz is set to testify. 

Though Katz wasn’t involved in the civil lawsuit, he’s expected to be a material witness. 

Next week, all eyes will be on Sheegl who is scheduled to appear, along with Amrik Babakhanians.