It seems a contract dispute between the Yukon government and construction firm Norcope Enterprises may be settled out of court.
In dispute is $2.1 million in work on the Whistle Bend subdivision that was given to Sidhu Trucking. That’s work Norcope believes it should have been awarded, or at the very least, should have been tendered by the government.
When the lawsuit was filed on June 1, Paul Hutlet, vice-president of Castle Rock Enterprises, hoped the case would expose problems with the Yukon government’s tendering practices.
Now, an out-of-court settlement may keep the issue in the dark, he said.
“We will be monitoring and making sure that we get answers to any settlement agreement because it’s public money, and, whatever agreement they make behind closed doors, it should be made public,” said Hutlet.
Castle Rock also bid on the Whistle Bend contract but lost to Norcope even though its bid was $6.5 million lower.
Norcope’s case was supposed to go to court on July 28, but has been pushed back six weeks.
“The situation is that the hearing was adjourned till September 9, to provide the parties with time to meet and discuss the matter,” said Joanna Lilley, spokesperson for Community Services.
This is the second time the hearing has been adjourned.
In June, Norcope, which has a $15.9-million contract to install sewer and utility infrastructure in the new subdivision, parked several pieces of heavy equipment around the Yukon legislature to protest the government giving new work to Sidhu.
The company also filed suit against the government, accusing it of breach of contract, and sought an injunction to stop Sidhu from continuing with the work under dispute.
The injunction came before the court on June 24, but Justice Leigh Gower adjourned the hearing after he received a letter from Sidhu’s lawyers at the last minute.
The letter argued Sidhu was never properly notified of the hearing and needed time to prepare a defence.
The legal manoeuvring hasn’t delayed or stopped construction of the subdivision.
“The work is progressing and there is no delay because of the court action,” said Lilley.
That’s good news.
According to an affidavit filed by Community Services, even a small delay in this season’s construction could put the project back a full year, until 2014.
That was the rationale for giving the work to Sidhu over Norcope in the first place.
In the spring, the subdivision’s design was amended.
The new plan required hundreds of thousands of cubic metres of additional soil and gravel to raise road and lot levels.
Norcope assumed the work fell within the scope of its contract, so it bought and leased additional equipment.
Norcope was given two chances to submit new pricing and schedules.
The company said it needed another 31 days to complete the additional work.
On May 24, the government rejected Norcope’s schedule and gave the job to Sidhu.
“Awarding new work to (Norcope) would strain (its) resources to the limit and result in increased costs and unacceptable delays in the project,” wrote the government in its affidavit.
That left Norcope holding the bag for its new equipment.
The company accused the government of breach of contract and sought to recover its costs.
But the work was never within the scope of the original contract, said the government response. It accused Norcope of breaching the contract.
The government is also seeking damages associated with Norcope’s protest.
According to court filings, Norcope misrepresented itself when bidding for the original contract by neglecting to tell the government it planned to use a subcontractor, Cobalt Contracting, to supply gravel.
Naming subcontractors was required under the terms of the tender and contract.
“Norcope’s conduct was reprehensible, vexatious and deserving of special costs,” the government wrote.
In reading the court filings, the two parties seem be far apart. But negotiations are continuing.
“The parties are talking and trying to work together to resolve the issue,” said Lilley.
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