A NAIT board member donated $1 million in return for the naming rights of a building recently constructed on campus — but the private company he is president of also received a “sole source” sub-contract to provide the structural steel for the building.
Donald Oborowsky, president of Waiward Steel, acknowledged in an interview the potential for the deal to be seen as a conflict of interest, but added the donation was made in good faith.
“I’ve seen a case where a contractor has donated services and it turns out it really wasn’t a donation,” Oborowsky said. “We [made the donation] out of pride, and we did it out of a sense of what we could do to help NAIT.”
The Alberta Auditor General’s report, released Wednesday, acknowledged that the business rationale for NAIT’s decision may have been sound, but the matter highlighted some “potential holes” in the public institution’s construction management policies.
“NAIT’s policy is that any contracts over $10,000 must go out for request for proposals — to a bidding process — but the trouble is that the policy doesn’t apply to sub-contractors, and we think that should be looked at,” said Jeff Dumont, the assistant auditor general responsible for all post-secondary institutions audits in Alberta.
In the case of the $14 million Waiward Steel Technology Centre, finished in the fall of 2006, Waiward Steel received the $660,000 structural steel sub-contract without needing to compete for it.
“[NAIT] management feels it was a very beneficial arrangement when you consider they were trying to build a strategic partnership, they got a significant sum of money, and they needed to do the work quickly to meet some deadlines. But given the potential for conflict of interest, we thought they should have better documentation for their rationale.”
“I know where they are coming from. I know why our documentation needs to be good,”‘ Oborowsky said, adding that his company completed the work on time and on budget, a rarity in the current Alberta construction industry.