Local contractor Clayton Thomas says the territorial government’s bonding policy prevents small companies from building Golden Horn Elementary School’s portable classroom. Crystal Schick/Yukon News file

Contractor says YG bonding policy prevents small companies from building school portable

The Department of Highways and Public Works confirmed bonding is required for the project

A local contractor interested in building a portable for Golden Horn Elementary School claims the Yukon government has suddenly implemented a bonding requirement that impedes small companies from bidding.

Clayton Thomas told the News companies could submit a deposit in the past — 10 per cent of the total worth of projects under a threshold of $1 million.

This, Thomas claims, has been scrapped.

Now, six-figure projects require bonding, he said, a financial guarantee the job would get done on time as scheduled.

This change is cost prohibitive to some local companies, he said.

Asked if bonding is required for projects under $1 million, Oshea Jephson, spokesperson for the Department of Highways and Public Works, said in a written statement: “Not usually, but in this case there are tight timelines and an upfront deposit to the supplier is necessary. This protects taxpayer dollars.

“On occasion discretion is used to select bonding over cash securities should there be increased risk mitigations to be considered, such as heightened time restrictions/strict deadlines, or dollar thresholds or should manufacturing/production deposits be required, such as this instance,” Jephson continued.

Jephson would not disclose the exact cost of the project or a rough estimation. Doing so, he said, could influence bids.

But in an email Thomas forwarded to the News, Shelby Workman, director of capital development at the Department of Highways and Public Works, said the portable is estimated to be less than $1 million.

“It is expected that a modular building manufacturer would require an advance payment upon Contract award to secure a place in its production schedule,” Workman’s email says. “Bonding provides security against failure to deliver after the advance payment is made.”

Thomas called the alleged bonding change “stupid” and “anti-competitive,” adding that it’s the first time he’s observed the government do something like it.

“It’s like another thing that keeps small business out of big business,” he said. “Basically, if I don’t have bonding, I can’t bid this.”

The invitational tender, launched on Nov. 23, seeks a minimum of three local businesses to bid on building and delivering the modular classroom in time for the next school year.

Golden Horn’s school council had requested a tender be released no later than Dec. 31 to expedite the delivery.

Golden Horn is at 98 per cent capacity.

Last month, the News reported that there are only five spaces available in Grade 1.

Earlier this year, the Yukon government put out a tender. No companies, including ones in western Canada and the Yukon, responded to it.

Building a portable is easy, Thomas said, taking about two months to do.

“It’s less than building somebody a house,” he said. “There’s no washrooms in it. It’s electric heat. This is just a frame job, flooring and interior finishes. There’s nothing to it.”

The bid process closes on Dec. 18. Names of bidders and amounts will be posted after a contract is awarded.

The portable is slated to be ready by next August.

Contact Julien Gignac at julien.gignac@yukon-news.com

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