When it comes to working in Faro, unpaid invoices are a bone of contention for some Yukon contractors.
Parsons Corp., which manages the construction contract for the federal remediation project in Faro, is frustrating local businesses.
One businessperson, Bob Surgenor, told the News that his patience is worn thin.
“Myself and a number of local contractors now refuse to work for them because of the mismanagement, failure to pay in a timely manner and blatant disrespect for local contractors and our employees,” Surgenor said.
It turns out that invoicing Parsons, as managers of the federal remediation project, is not much different than invoicing the federal government. In fact, payments can take more time, sometimes stretching into months and even years.
It takes so much time that Faro Mayor Jack Bowers was compelled to raise the issue with representatives from Parsons and Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) when they visited him in Faro on March 7.
For years, Bowers had heard that local businesses were frustrated about payment delays with Parsons — frustrated enough to talk to the mayor, the News, and politicians.
“I was very frank,” Bowers told the News on March 8. “I told Parsons that they have a soiled reputation here.”
In the past, Bowers said he watched as Parsons seemed to avoid contracting and working with local businesses. Now, businesses are experiencing long waits to be paid for completed work.
“There are two local contractors that were held up for, in one case, five or six months, for hundreds of thousands of dollars,” he said. “For a small contractor that’s really tough, because you’ve got all those creditors that you need to pay.”
Parsons told Bowers that delays were due to CIRNAC being extremely slow to pay Parsons.
After talking with Bowers in Faro, the News talked to Geoff Karcher, director of the Faro Mine Remediation Project with CIRNAC in Ottawa on March 23.
Karcher explained that because CIRNAC hired Parsons, the contractual relationship is between Parsons and those subcontractors. Canada’s relationship is with Parsons, and so the feds look to Parsons to ensure that federal procurement policies and procedures are followed.
“We can’t pay for goods and services that have not been received or have not been invoiced properly. And we rely on Parsons to do that evaluation with the contractors to evaluate those invoices to make sure that they’re up to the standard that’s required,” said Karcher.
This is where the delays and frustrations build amongst contractors. It means that Parsons queries and questions the contractors to get the information lined up to meet federal contracting requirements, then submits the local invoices and waits for federal approvals and money before issuing payment to the local contractor.
Surgenor told the News he felt backed into a corner by Parsons’ payment system.
“They [Parsons] use financial leverage and tell people not to talk to the media, sometimes dragging out payments in excess — in my case — of six months or in some cases two years. Then Parsons would make a phone call asking us for interest to be removed and dating the invoices to the current date,” he said.
Bowers told the News that at the March 7 meeting, “[I said], what can you do to make sure that the creditors are paid more quickly, because you’re putting the smaller businesses in a real hardship place when they can’t pay their bills and for their employees, because they’ve got no money.”
Bowers recalled the delegates saying that they would get back to him on that.
The News asked Karcher at CIRNAC the same question.
Karcher replied, “I know Parsons has recognized that there’s a challenge in terms of working within a federal and detailed processes.”
He said that Parsons would be working with local companies to ensure and help build capacity around the processes as new contracts are let.
The News reached out to Parsons to ask about these business capacity-building initiatives, and a public relations official with Parsons referred the News back to CIRNAC for comment.
Parsons’ contract as construction manager on the remediation project was recently re-awarded for $108 million for two years.
Bowers remains optimistic since Parsons has promised regular meetings and reports going forward. Some businesspeople remain angry. Surgenor recognizes that Parsons is in Faro for the long term and only wants things to improve.
“Everything done at this site will impact local people for many years, it is in our immediate backyard,” Bowers said. “We need to be able to participate in the project, after all these are our fishing waters, our hunting grounds, our drinking water and our lives that are affected.”
Contact Lawrie Crawford at lawrie.crawford@yukon-news.com