On-Site Magazine

With job nearly complete, Graham is out as builder of Grande Prairie hospital

Already years into construction, the province and Graham have sparred over the project's timeline and budget. Alberta claims to have terminated the deal with the contractor; Graham says it quit

September 11, 2018   By David Kennedy

The exterior of the hospital is done and the interior is about 75 per cent complete. PHOTO: Alberta Health Services

EDMONTON—A major spat over a long-delayed, over budget hospital project in Grande Prairie, Alta. has prompted the provincial government and contractor Graham Construction to go their separate ways.

Alberta Infrastructure Minister Sandra Jansen said Sept. 10. the province is looking for a new construction manager to take over the build after it terminated its contract with Graham.

The government had issued an ultimatum last month, demanding the Calgary-based contractor put together a plan to get the project back on course, or else. It said the company submitted a plan, but it did “not provide the certainty that was needed.”

Graham tells a very different story. In a statement released Monday, the company said it issued a notice to terminate the contract with the government weeks ago. The company cited Alberta’s failure to meet its contractual obligations in a legal notice issued to the province Aug. 17. Prior to handing in the notice, Graham had defended its record on the project, accusing the government of poor planning and continual scope changes that led to added costs and delays.

The contractor said the move to terminate the contract was “the culmination of Graham’s continued advice to Infrastructure that the project was underfunded to build the project as designed by Alberta Infrastructure’s designer.”

Work on the hospital is at a standstill until further notice. The facility’s exterior is already done, while the interior is about 75 per cent finished.

The dramatic split follows weeks of finger pointing.

Last month, Graham argued the project’s $763 million budget was inadequate to complete the work. It had requested $120 million more, including a $35 million contingency fund, blaming hundreds of change orders, as well as dozens of design and scope changes. The province, meanwhile, claimed the contractor’s requests for further funding and more time were unjustifiable.

“This was not a decision that was made easily. I have been clear that this project is a government priority and that’s why we are taking action to construct this hospital as quickly as possible,” Jansen said, adding that ending the deal with Graham will provide greater clarity when work resumes.

Along with announcing the 11th-hour termination of the contract with Graham, the province said it aims to hire a new construction manager for the project by the end of October. It issued a request for proposal Monday and hopes to have crews back on-site by the beginning of November.

Graham said it will be seeking damages from the province.

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5 Comments » for With job nearly complete, Graham is out as builder of Grande Prairie hospital
  1. Dik Coates says:

    It would be interesting to know if the changes were due to change in scope, or, errors and omissions by the various consultants.

    My experience with Contractors being terminated is not good… and, very costly to the Owner.


  2. Jason Whyte says:

    To me this shows the complete lack of experience of our current governement in handling projects. It shouldn’t be unexpected after voting in a government that has never seen the light of day before.
    Unfortunately we all as tax payers bear the burden of an incompetent beurocracy inept with working on large (or any) projects.

    • Chuck Sleep says:

      I’m curious if all the changes Graham is alleging come from elected members or mid-level bureaucrats.

      • Be Easy says:

        Y’all ever heard about stakeholder management, risk management and change management? You are also dealing with Infrastructure; not necessarily “government” you alluding to. Infrastructure gets its budget which it must operate within. Its the GC’s responsibility to ultimately deliver within the triple constraints. There should be a direct alignment between the deliverable and the associated budget which by the way includes contingencies. If the changes in scope are getting out of hand, its up to the GC to manage the expectation of the client. Its within their rights to put the project on halt as they are the one in position to foresee the impact through performance assessment. All these things should have been taken into account in the pre-bid and planning process.
        Before you go ahead blaming a “government” ask yourself why 65% of all major projects fail to deliver on budget and within schedule.
        The answer by the way is lack of proper front-end planning. Also, the idea isn’t to do away with risk…you manage them.

  3. Dik Coates says:

    I’m not sure what the government involvement is, other than being the ‘bill payer’.

    The program should be determined between the hospital admiinistration, and the Architect. This program can be reviewed by the government agency. Once the program has been established, the Architect should prepare the working documents. Subject to any changes in scope brought about by the hospital administration, there should be no extras to contract. The scope should have been well established with the original program.


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