‘Untenable position’: Calgary-based firm at centre of Grande Prairie hospital dispute to pursue legal action
A Calgary-based construction firm formerly responsible for the $763-million Grande Prairie Regional Hospital project is pursuing a claim for damages.
Graham Construction and Engineering said in a news release it is “deeply disappointed” the government has ripped up its contract with the firm, adding the timeline released by the province “omits a key fact.”
The company said it issued a notice of termination to the province on Aug. 17 because contractual obligations weren’t met, disputing the chain of events laid out by the province on Monday which it said ended the deal.
“This was the culmination of Graham’s continued advice … that the project was underfunded to build the project as designed by Alberta Infrastructure’s designer,” Graham Construction and Engineering’s Monday release said. “We also had conversations with the Government of Alberta as recently as last week in which we believed we were moving towards a solution for Grande Prairie.”
The company said it was prepared to reboot the project and offered to bring in a thirdparty mediator, but has been placed in an “untenable position” by the province.
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.
Alberta Infrastructure confirmed it received correspondence from Graham on Aug. 17, but said it wasn’t considered “a valid notice of termination.”
“Graham’s correspondence suggested the province failed to make sufficient financial arrangements to fund the contract. That was incorrect, as the funds were allocated in the provincial budget,” said spokeswoman Jennifer Burgess in a statement.
Hospital contract termination a ‘debacle’
On Monday, Infrastructure Minister Sandra Jansen announced construction will be suspended until a new firm is hired.
Alberta Party Leader Stephen Mandel called the situation a “debacle” Tuesday, and said Albertans deserve answers to “an awful lot of questions” about the project.
He said the Alberta Party will be pushing for those answers come the fall session of the legislature next month.
“No one knows what’s up, what’s down. We need to get to the bottom of what happened here,” he said in a phone interview.
Mandel said the government has created “an even bigger mess” by cancelling the hospital build contract, and now has a potentially costly legal battle on its hands.
The next moves
The province plans to issue an invitational request for proposal, meaning a shortlist of companies will have the opportunity to compete for the project. Jansen said that decision was made to move quickly and get a new contract in place by the end of October.
“We clearly have a number of differences with Graham (Construction and Engineering),” she told reporters during a phone call. “I can’t remember another time when this happened … it is really a rare occurrence.”
The move followed a notice of default the province handed to Graham on July 30, spelling out an Aug. 22 deadline for the company to submit a plan to get the hospital project back on track.
In its release, the company said it is “confident in its forthcoming fact-based claim for damages arising from the Government of Alberta’s actions.”
The original contract for the hospital dates back to 2011. It 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.
Mandel was Alberta health minister in 2014-15, but said he had no dealings with Graham and wasn’t involved with forging the contract that was ripped up by the province this week.
The new hospital was first announced in 2007 by thenpremier Ed Stelmach and has faced a series of hurdles, including construction deferrals and design changes.
The new Grande Prairie Regional Hospital was expected to be finished in late 2019.