Grande Prairie chamber demands solution for unpaid sub-contractors, sub-trades in hospital construction – Global News

Grande Prairie chamber demands solution for unpaid sub-contractors, sub-trades in hospital construction - Global News
Court orders $13-million payout to contractors on stalled Grande Prairie hospital project
March 25, 2019: Over two dozen companies say they are still owed millions of dollars for construction work done on the new hospital in Grande Prairie. As Tom Vernon report, it's hope a court date next month will settle the dispute but some say they're worried their companies might not last that long. Tom Vernon reports.

Some contractors working on the Grande Prairie Regional Hospital say they haven’t been paid for their services in nearly a year, according to a letter sent to the provincial government last week.

The letter from the Grande Prairie and District Chamber of Commerce addressed to Infrastructure Minister Prasad Panda, dated for May 9, states that small- and medium-sized sub-contractors and sub-trades are “suffering financial hardship due to non-payment of construction contracts for the Grande Prairie Regional Hospital.”

READ MORE: Grande Prairie hospital construction back on after province picks new construction manager

“Payment for some of these contractors has been outstanding for nearly a year,” the chamber said.

“Not only has this put an immediate financial burden on these businesses, some have even been forced to close their doors.

“Others have had their ability to bid on future work put in jeopardy due to credit limitations.”

The hospital project has been plagued with issues since it started in 2014 and the status of the construction is both over budget and well beyond its original 2017 completion date.

In July 2018, the province issued a notice of default to the company it deemed responsible for the delayed, costly hospital construction, Graham Construction. When that happened, the many sub-contractors working for Graham were also booted from the property.

Watch below (July 30, 2018): A notice of default has been issued to the contractor responsible for the construction of the Grande Prairie Regional Hospital. Vinesh Pratap explains.

More than two dozen companies said in March they were owed millions for construction work they’d done but weren’t paid for.

The 26 companies said they were owed a combined $60 million in back pay, which is double the $30 million the government set aside. A court date was set for April to determine how the money would be handed out. At the time, arguments were made but no payments were released.

A new construction manager — Clark Builders — was brought on to finish the project in November 2018.

In an emailed statement, UCP Infrastructure Minister Prasad Panda said the government is working with the construction manager to see the project finished as quickly and efficiently as possible.

READ MORE: Construction firm responsible for overdue, over-budget Grande Prairie hospital issued notice of default

“It is expected that 90 per cent of the sub-contractors will be returning to complete their scope of work,” he said in an emailed statement.

“The Public Works Act helps ensures sub-contractors will receive payment for authorized work completed on capital projects.

“Graham Construction was paid for all work that was certified up until July. The amount certified for work for August and September was paid into the courts. On March 12, 2019, Infrastructure paid over $30 million into the court to address Public Works Act claims.”

Panda said the government would not comment on the specific case that’s still before the courts.

The Grande Prairie and District Chamber of Commerce represents more than 25,000 employees who are part of more than 1,300 member businesses.

In its letter, it suggests a loan guarantee program “to financially assist the contractors who have completed work” and asks the government “to take an active role in ensuring the survival of good businesses and employment of good people in our community.”

A court has ordered over $10 million in payouts to subcontractors on the long-delayed Grande Prairie hospital project.

Court of Queen’s Bench Master Scott Schlosser issued an order April 9, directing around $13 million in court-held government funds be paid to subcontractors that performed work on the northwestern Alberta hospital, according to the court.

The April 9 order lists Graham Construction & Engineering and Jardeg Construction Services as applicants and nearly 90 individuals and companies as respondents. The claims were made under the Public Works Act. Another hearing on the matter is scheduled for July 11.

QB Master Scott Schlosser has Ordered nearly $13 million from $30 million in Court-held government funds be paid to contractors involved in the Grande Prairie Hospital construction after claims under the Public Works Act. A further hearing is set for July 11. #ABQB #albertacourts

A new Grande Prairie hospital was first announced by then-Premier Ed Stelmach in 2007. It has faced a series of delays, and an ever-inflating price tag, growing from $319 million to $763 million.

Then-Infrastructure Minister Sandra Jansen gave the company an Aug. 22 deadline to come up with a plan to get the project back on schedule. Then, in September, the provincial government fired Graham after issuing a notice of default.

Work was supposed to be completed on the project earlier this year. The province claimed Graham Construction requested $120 million in funding without giving a proper explanation.

Graham Construction argued otherwise, saying that since the contract’s finalization in 2016, it had to deal with multiple scope increases, design changes, and delays that were outside its control. Graham Construction said it was given 600 change orders and more than 400 design clarifications during the two years it worked on the project.

Last month, the Alberta Construction Association called on the province to pay subcontractors for work on the project.

“We feel compelled to speak out on behalf of our members, their employees and their families,” association chairman Ian Reid wrote in a letter to Jansen. “The protracted payment period puts the financial survival and livelihood of many Albertans at risk for circumstances that are beyond their control.”