The awarding of Calgary’s Event Centre project management contract went through a stringent purchasing process, the City of Calgary said, but that doesn’t mean some aren’t worried about a conflict of interest.
The City, along with Calgary Sports and Entertainment Corporation (CSEC) and the Government of Alberta announced the finalized Event Centre agreements on Oct. 5. At that time, they also announced that sports consulting firm CAA Icon would be the development manager for the $1.2 billion project.
CAA Icon also negotiated the agreement. They were contracted by the City of Calgary last October to manage the negotiations with CSEC.
Immediately that raised conflict of interest questions from the public. The Sprawl also mentioned it in a recent podcast they did on the arena topic.
Concordia University’s Moshe Lander, an economist and lecturer who specializes in sports economics, said that while he doesn’t know the specifics of how the final development manager decision was derived, it’s worrisome.
“That looks like just a wonderful coincidence that this happens to be the group that’s put in charge there,” he told LWC.
“If nothing else, it looks suspicious.”
Lander said it’s something that should be done to address questions about transparency and honesty around this deal.
“I think that people should be falling all over themselves to make sure that it’s clear that this wasn’t something that was maybe done as a backroom deal,” he said.
Upon initial questions, the City of Calgary sent back a statement.
“To ensure fairness in the procurement process, The City required that the CAA ICON team developing and submitting the Development Manager proposal did not include any person from CAA ICON involved in the negotiation and advisory services work and CAA ICON’s proposal team members did not have access to confidential information about the Event Centre project,” they wrote.
They said it also went through a competitive RFP process that was initiated in June 2023.
Digging into the procurement process
When Mayor Jyoti Gondek was asked about the process, she said she’s looking forward to seeing the type of project CAA Icon brings to Calgary.
“I do know that our administration runs a very fulsome process and that they make sure that it is done to maintain integrity of the project and folks that are bidding to do work,” she said.
“I think the negotiation of this deal was incredibly complex with the number of parties that were at the table. So, I think the role that they played in that particular situation was specific to getting the negotiations done. This is a very different role that they would be playing now.”
After further questioning, the City of Calgary contends that it did go through a rather rigorous process to make the development manager selection.
Amit Patil, director of supply management for the City of Calgary, said the process to find the development manager actually began as soon as the initial Event Centre agreement was delivered April 25. Patil said by Aug. 28, they put out an NPP – Notice of Proposed Procurements.
“That’s essentially our way of telling the market that look, we’re going to look for the development manager for the Event Center, and we just want to get market ready so that the teams are ready to do proposals,” he said.
That was open for 45 days.
Then, they had a two-stage RFP. Stage one shortlists candidates.
“That’s kind of where we go in and look at the capabilities of suppliers and choose who are capable of doing it … these are the requirements, you match it, you kind of move on to the next one,” Patil said.
That was open for 12 days.
Stage two of that process includes the scope of work and when the real proposals come in. That part was open for 29 days, Patil said. There is a third step where an interview is conducted.
Patil confirmed they got one proposal. He said the same information that was provided to CAA Icon for the bid was also provided to other potential bidders. The bid documents were downloaded by others, but no other bid came in.
Project specs might not apply to all: Lander
Lander postulated the City of Calgary may have received only one bid because proposals are often written very specifically for a client in mind. That may ward other bids off.
“If you put out a set of characteristics, they can only be referring to one group – that you can understand why people might decide they don’t want to bid on this because they don’t have those characteristics, or if they feel that the decision process is made, is that there’s already a preconceived notion that that might scare you off from bidding in the first place,” he said.
People may have experienced this kind of thing in their own lives with things like job postings, Lander said.
“I think all of us have experienced that in some capacity through our workplaces, right, that there’s a job opening in this particular department,” he said.
“We encourage you to apply, but when you go and read what the different qualifications are going to require, you realize that it’s clearly the person that’s in the next office that they’re catering for. So, you might not even apply in the first place because you know they might be clearly talking about Jimmy,” Lander said.
Patil said that the CAA Icon group bidding on the development manager aspect had no access to the confidential information discussed during negotiations. It is a unique situation, however, Patil said.
Internally they looked at the conflict of interest. He said that’s why they had the multi-stage procurement process. They made all of the documentation available to all parties. Further, Patil said that a non-disclosure agreement was signed. Bid documentation is secure, and they have records of who was accessing the documents, he said.
LWC reached out to CAA Icon just prior to this story’s publication to learn more about how they handled these bids. Executive Vice President Melissa Heiter responded, saying they were conscious of “client-designated media relations protocol.” They redirected the queries back to City of Calgary media relations.
Large purchase contracts moving forward
Patil said overall, he’s really satisfied with how the procurement process was handled for the Event Centre’s development manager contract.
“It was all conducted right to the book,” he said.
Even so, Patil said the procurement team met for a post-mortem discussion after the contract was awarded. That raised questions that Patil said they will consider in the future.
“We actually discussed, is there anything else we could have potentially done to reach out to a bigger market?” Patil said.
“Is there anything that we could think about to gain more competition? That’s something that we really need to think about.”
Lander said it would have rather simple to eliminate any questions about conflict of interest in the Event Centre development manager contract.
“One easy way they could have done it is they could have excluded CAA Icon from being able to bid on this project, that again, is that because you were responsible for this stage, we understand the conflict of interest this presents, or the red flags this might create, or the suspicions this might create,” he said.
“So, if you’re going to be involved in this part of the process, and you cannot be involved in that part of the process, you know, that would be a simple way to ease everybody’s concerns.”
Otherwise, he said, let the market know up front that one bidder is probably the best at this stage, and will be allowed to bid against others.
Enabling work around the proposed Event Centre location was slated to begin by the end of this year. New designs, development plans and application for a development permit are expected in 2024, though no firm timeline is set.
