Province fires contractor for hospital project

Grand Prairie construction in limbo until new firm hired: infrastructure minister

EDMONTON The provincial government has fired the Calgary-based firm tasked with building the $763-million Grande Prairie Regional Hospital following a heated dispute over the project’s timeline and budget.

“We clearly have a number of differences with Graham (Construction and Engineering ),” said Infrastructure Minister Sandra Jansen during a phone call with reporters Monday. “I can’t remember another time when this happened ... it is really a rare occurrence.”

Construction will be suspended until a new firm is hired, Jansen said.

The province plans to issue an invitational request for proposal, meaning a shortlist of companies will have the opportunity to compete for the bid. Jansen said that decision was made to move quickly and get a new contract in place by the end of October.

The move comes after the province issued a notice of default to Graham on July 30 and spelled out an Aug. 22 deadline for the company to submit a plan to get the hospital project back on track.

“The plan did not provide the certainty we need in terms of timeline and budget to complete the project,” Jansen said Monday.

The province has argued Graham Construction, working toward a completion date in early 2019, asked for $120 million extra to complete the hospital without providing a proper explanation. That’s on top of the $510-million contract that makes up the bulk of the project cost.

Jansen said she couldn’t give details about Graham’s revised proposal because it’s a legal process. She also couldn’t confirm how much money the firm will receive for completed work, which included the outside of the building as well as about 75 per cent of the interior.

Graham has argued it had to deal with continual design changes, scope increases and delays outside its control since the contract was finalized in 2016.

In the last two years, the project has been subject to more than 600 change orders and more than 400 design clarifications, said the company.

“It is false Graham requested an additional $120 million to add to the budget,” the company said in a news release last month. “Monthly update reports were provided to Alberta Infrastructure (AI) since the start which included cost and schedule updates and repeatedly alerted AI of a forecasted $70 million to $85 million shortfall.”

The original contract for the hospital dates back to 2011 and was signed under the former Progressive Conservative government, with completion slated for 2015. The price tag has increased over the last several years to the current $763-million bottom line from $319 million.

The new hospital was first announced in 2007 by then-premier Ed Stelmach and has faced a series of hurdles, including construction deferrals and design changes.

It has been billed as a state-ofthe-art regional referral centre for northwestern Alberta residents. Design plans include eight operating rooms as well as obstetrics, cancer care, critical care and emergency services.

The province has other contracts in place with Graham Construction, but they will not be affected, Jansen said.

Graham Construction didn’t respond to a request for comment Monday.

The plan (by Graham Construction and Engineering) did not provide the certainty we need in terms of timeline and budget to complete the project.