Contractor fires back in bitter dispute over Grande Prairie hospital project

In an increasingly bitter dispute, the contractor building the Grande Prairie Regional Hospital is placing the blame for construction overruns and delays squarely on the province.

“The (province’s) recent release of a notice alleging default is unfortunately rife with errors and misstatements,” says a statement issued late Wednesday by Graham Construction.

“While Graham has and will continue to meet its contractual obligations while it works under the dispute resolution process, the notification necessitates a response.”

On Monday, the province issued a notice of default blaming the Calgary-based contractor for delays and cost overruns in the construction of the nearly-complete hospital.

Alberta Infrastructure gave the company 15 days to come up with a new plan to get the project back on schedule or see the lucrative contract cancelled.

Infrastructure Minister Sandra Jansen said she was dumbfounded by a request last month by Graham Construction for an additional $120 million to finish the project, a statement the company said is false.

Continual design changes

Graham said since the start of the project in 2011, the government has made continual design changes.

Since late 2016, Graham has repeatedly advised the government the $510-million budget was insufficient for the evolving design, estimating the cost had ballooned to $583 million, the company’s statement said.

In less than two years alone, “the project has experienced over 600 change orders and over 400 design clarifications; 63 approved design changes and 34 new scope clarifications in June 2018 alone,” the company said.

“Many changes required demolition of completed work to accommodate the new scope, affecting project cost and schedule.”

Recently, at the province’s request, Graham said it provided an updated budget based on the latest design, which included an additional contingency amount of $35 million.

Graham’s deteriorating relationship with the province over the project has forced it to invoke the contract’s dispute resolution process to resolve a number of issues.

Graham said since March it has sought to meet with the minister and senior officials, but meeting dates have been cancelled and follow-up requests for meetings have gone unanswered.

The company said it remains open to meeting with the government and resolving the issues. But it warns that Alberta Infrastructure must take on its “responsibilities and obligations.”

In the meantime, “Graham will vigorously defend its position and reputation,” the statement said.

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