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Alberta terminates deal with Graham for Grande Prairie Regional Hospital

The Canadian Press
Alberta terminates deal with Graham for Grande Prairie Regional Hospital

EDMONTON — The Alberta government is looking for a new builder for the Grande Prairie Regional Hospital.

Infrastructure Minister Sandra Jansen says it has terminated the contract with the current builder, Calgary-based Graham Construction, which it has been at odds with over the timeline and costs of the $763-million project.

In July, Jansen directed Graham to submit a revised plan to get back on track, but says the new blueprint wasn’t good enough.

“We have a responsibility to the taxpayers of this province to get this project done on time and on budget,” Jansen told reporters on Sept. 10.

“We had asked (Graham) for a plan that gave us the confidence that the hospital was going to be completed on time and in the manner that we both agreed on, and we feel that didn’t happen.”

Jansen said they will invite a select group of contractors to submit bids in order to expedite the process and get a new builder in place by the end of October.

She said the province notified Graham and that work on the project has stopped.

The exterior of the hospital is done and the interior is about 75 per cent complete.

Jansen cited few details on the reasons for the termination and the invitation process for a new builder, citing privacy and legal issues.

She said next steps and revised timelines for the project will be done once the new builder is in place.

Jansen has said issues with Graham came to a head in late July when it was clear the hospital would not be done by the end of the year as planned and Graham asked for an extra $120 million on top of its $510-million contract with no justifiable reason.

Graham issued a statement stating the company was “deeply disappointed by the actions of the Government of Alberta,” and claimed the government omitted a key fact. 

“On Aug. 17, 2018 Graham issued a Notice of Termination to the Government of Alberta as their contractual obligations to the project had not been adequately addressed,” the statement reads. “We also had conversations with the Government of Alberta as recently as last week in which we believed we were moving towards a solution for Grande Prairie.”

Graham has said it warned the province that the hospital can’t be done under the current budget given the design changes.

“As previously stated, Graham was placed in an untenable position by the Government of Alberta,” the statement continues. 

The construction firm said that in less than two years the project experienced more than 600 change orders and more than 400 design clarifications. It said there were 63 design changes and 34 new scope clarifications in June 2018 alone.

In some cases, said Graham, the changes required previously completed work to be demolished.

As for the $120 million, Graham has said it had warned the project could be up to $85 million short and put in an estimate to complete the project that included a $35-million contingency fund.

Graham outlined in its statement that it “was prepared to engage in a conciliatory process to ‘reboot’ the project and to re-energize and re-align the project team, with the central purpose of seeing to the Health Centre’s completion. This included our offer to bring in a third-party mediator.”

The opposition United Conservatives, in a statement, said it’s disappointing to see the much-needed project delayed.

“We hope to see construction resume as quickly as possible given its importance to the people of Grande Prairie, the larger Peace region, and the workers and subcontractors that were laid off today as a result of this contract termination.”

The hospital, when completed, will provide space for everything from acute care to cancer treatment, obstetrics, MRI services and surgery to patients in northwestern Alberta.

The contract with Graham began in 2011, under the former Progressive Conservative government, and has been delayed ever since due to construction deferrals, design changes and cost overruns.

The initial cost of the project was $250 million.

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