Winnipeg towing company sues city for $10M over 'preferential treatment' of competitor during contract bid

A Winnipeg towing company has launched a lawsuit against the city, claiming municipal officials improperly awarded contracts to a competitor, costing the company more than $4 million in annual revenue.

Bison Towing alleges in a statement of claim filed with the Manitoba Court of King's Bench on Friday that the company was treated "unfairly and unequally" when it was passed over for two municipal contracts — one for Winnipeg Parking Authority awarded in April and one for the Winnipeg Police Service awarded in July 2024.

Both contracts went to Tartan Towing, a decision that Bison claims showed the city was giving "preferential treatment" to Tartan.

None of the claims have been proven in court. 

Tartan first signed the contract to tow and store vehicles for the Winnipeg Police Service in 2019, covering a period of up to five years. 

In 2023, the city filed a lawsuit against Tartan after a city review of invoices suggested that Tartan charged more than $1.1 million for tows that never happened. These allegations stemmed from Tartan's contracts to do courtesy tows during residential snow-clearing parking bans.

Shortly after, Tartan launched a countersuit against the city, alleging the city failed to pay more than $730,000 in towing services and left contract obligations owed to the firm unfulfilled. 

Bison said in its statement of claim that it began preparing to bid for the police service towing job when the contract came up for tender last year.

The company spent more than $100,000 to upgrade their yard and indoor space to store vehicles, the claim says. 

The city received three bids: one from Dr. Hook for $113,600, one from Tartan Towing for $18,500 and one from Bison Towing for $14.70.

Bison previously told CBC News it could cover the low offer with storage fees.

Bison argued in its filing that it met all the requirements and was a "qualified bidder" with the lowest bid offered to the city. Bison claims that Tartan's premises didn't meet fencing requirements, while its own lot already "exceeded the indoor space requirement."

However, Bison claims it wasn't selected for the contract because the city's contract administrator said the site didn't have enough indoor space — something Bison questions in its statement of claim. 

In its claim, Bison said Tartan shouldn't have been considered for the contract in the first place. 

"The ongoing litigation between Tartan Towing and the city should have resulted in Tartan Towing being disqualified from the bid process," the company said in the legal filing.

Last November, city police launched an internal review of their towing contracts after Coun. Janice Lukes raised fairness concerns.

That same month, Tartan filed a defamation lawsuit against the city, alleging that Lukes and Bison owner Zakria Shoaib made statements that suggested Tartan bribed officials to get the contract.  

This past January, Tartan sued the city again, alleging the city breached their contract by unilaterally refusing to negotiate an extension. That lawsuit accused Lukes of interfering in the process. 

In Bison's statement of claim, filed last week, the company said that the city also gave Tartan "preferential treatment" when it awarded Tartan a contract to tow vehicles for the Winnipeg Parking Authority in April. 

Bison argued Tartan's ongoing lawsuits against the city should have disqualified the company from getting that contract too. 

In its claim, the company said "the city owed Bison contractual duties" to treat Bison fairly and award it the two contracts as the successful bidder. 

Bison argues it was treated "unfairly and unequally" when Tartan was selected, claiming Tartan's bid was "non-compliant," making the rival company an unqualified bidder. 

"But for the city's breaches of contract, Bison would have been awarded the WPS Towing Contract and the WPA Towing Contract," Bison said in the lawsuit. 

Bison is seeking general damages of at least $10 million for breach of contract. The claim also lists unspecified compensation for special damages, legal costs and other costs that may be awarded by the court. 

The company said it lost $2 million in annual profits when it wasn't awarded the police contract, while spending about $100,000 to upgrade its Winnipeg yard specifically for this contract and paying $2,000 in monthly lease expenses. 

Bison said it lost about $2.2 million in annual profits it would have earned under the parking authority contract and incurred monthly lease costs of $5,100 for its yard and indoor space. 

"The denial of both towing contracts to Bison has also caused Bison to suffer a loss of business reputation in the towing community," the company said in its statement of claim. 

In a statement to CBC News on Wednesday, the city said it would not comment on matters before the courts.