‘Un­ten­able po­si­tion’: Cal­gary-based firm at cen­tre of Grande Prairie hospi­tal dis­pute to pur­sue le­gal ac­tion

Fort McMurray Today - - ALBERTA NEWS - CLARE CLANCY With files from Emma Graney cclancy@post­media.com

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.

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