Was city had?

By S. Paul VargaTuesday, January 16, 2007 http://www.pentictonherald.ca/article_2841.php
When Global Entertainment Corp submitted its bid to design and build the South Okanagan Event Centre in April 2006, its bid was the highest of the two shortlisted candidates. Presumably, that was one of the reasons his company lost the bid to build the facility, says Global president Rick Kozuback.So, when the City of Penticton and Giffels Partnership Solutions signed the event centre contract a few months later, Kozuback was surprised to learn the final price had skyrocketed well above his company’s guaranteed maximum price of $45.8 million.

Including contingency, Giffels’ price to build the event centre is now $55.6 million — $16 million more than its winning bid.“In the industry, we would call that a bait and switch,” Kozuback told the Penticton Herald Monday. “Tell the client what he wants to hear (and) come in with a real number somewhere down the road.”Kozuback concedes he could be comparing “apples and grapefruits” when it comes to the two bids, but that’s actually part of the problem. Despite asking several times, he has yet to be given either a copy of Giffels’ winning bid to learn where his company went wrong or a listing of the shortfalls of his company’s bid.

And despite both companies facing the same pressures related to rising construction costs, Kozuback said his company still stands by its$45.8-million bid.“We revisited those numbers last week,” said Kozuback, who said his bid had a built-in contingency related to rising construction costs and a delay in the anticipated start of the project. “We didn’t anticipate starting construction until November or December anyway, so we built it in. We knew there was going to be some changes in hard construction costs, so there was a little more than a normal contingency.“Actually, steel and concrete have stabilized right now.”

In a letter released to media outlets Monday and published on the Herald’s letters page today, Kozuback outlined the basic points of Global’s bid, which included an Olympic-sized ice surface with 4,500 seats and a second sheet of NHL-sized ice. As well, the bid included a hockey hall of fame and restaurant building attachment and a $3-million equity contribution from Global. Kozuback’s letter came after the Herald had initially made requests to the city for copies of the bids submitted as part of the contract process.

“We’re just confused, if the price came in (higher), why someone on the committee, on city staff, or the consultant, wouldn’t say, which happens to us a lot in this country, ‘We’re throwing this out, and we’re going to re-bid the project because you’re $17 million over what you suggested this building could be built for,’” said Kozuback.“That wouldn’t fly here. Two or three per cent? Five per cent? Sure. That’s a rounding error. $17 million? Someone there should have said, ‘What’s going on here?’”

Mayor Jake Kimberley said he doesn’t know how Global could be so firm on its price, having only seen conceptual drawings from both bidders.“There were no substantiated drawings presented by either party at that time in April 2006,” said Kimberley. “There were only conceptual drawings. How they can suggest that they can give that commitment throughout the process to December of this last year, I don’t know.”At any rate, Kimberley said Global’s bid of having two ice sheets south of the community centre, but not attached to the convention centre, was a big factor in the city’s decision not to go with Global.

“Giffels were offering the main ice sheet attached to the convention centre on the west side of the community centre, whereas Global Entertainment’s proposal was for two ice sheets on the south side, which didn’t fit the requirements of the convention business,” said Kimberley.As for Kozuback’s suggestion that Giffels’ bid was an example of a “bait and switch,” Kimberley refused comment.Giffels vice-president Peter Hall was unavailable for comment at press time.