Kluane First Nation sued over construction contract

Cobalt Construction filed a statement of claim on Sept. 16 alleging that the First Nation broke its own tendering regulations, and Yukon law, by awarding a contract to Kluane Corp.

The Kluane First Nation is being sued by a construction company over a road repair project in Burwash Landing.

Cobalt Construction filed a statement of claim on Sept. 16 alleging that the First Nation broke its own tendering regulations, and Yukon law, by awarding a contract to Kluane Corp.

Kluane Corp. is owned by the Kluane First Nation and has the sole purpose to “creating wealth for the Kluane First Nation,” according to the government’s website.

Cobalt asserts it was the lowest bidder at $888,937, and had the bidding process been fair, it should have won the contest.

Kluane Corp. bid $929,350 for the project, but Cobalt claims their bid should have been rejected because it didn’t meet all the requirements of the tendering process.

In the call for bids that the First Nation put out, it listed seven requirements that potential bids must meet. Each bid would be given a weighted score for each requirement and ranked based on a total possible score of 1,000.

One of those requirements says that acceptable bids must include a bid bond worth 10 per cent of the overall bid price. According to Cobalt’s claim, Kluane Corp. didn’t include a bid bond, and should have had their bid disqualified.

The other ranked criteria included bid price, the bidder’s experience with similar projects, the qualifications of the bidder, the inclusion of Kluane First Nation members in the project and the proposed plan for how the bidder would carry out the project.

Kluane Corp. lost 30 points because of its higher bid, but scored 100 per cent in all other criteria. Cobalt, on the other hand, lost points in a number of areas, for a total score of 830 out of 1,000.

That’s because the evaluation wasn’t fair, Cobalt alleges. In its statement of claim, the company said that the First Nation assigned too much weight to the lowest ranked criteria – the inclusion of First Nation members – and not enough weight to the highest ranked criteria – the bid price.

Cobalt is suing for lost profits, legal costs and interest.

The project would be paid for with money from the federal Building Canada fund.

The First Nation hasn’t yet filed a statement of defence.

Contact Jesse Winter at jessew@yukon-news.com