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UPDATE: Minister dismisses hospital construction manager claims

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UPDATE: Alberta’s Infrastructure Minister says Graham Construction shouldn’t have signed their amended contract in December 2016 if they didn’t feel the work could be done within the $510 million budget and timeline. Speaking to reporters Thursday, Sandra Jansen said the amount of change orders issued is normal for a project of the Grande Prairie Regional Hospital’s size.

“Change orders always happen on job sites. The scope was set in place in December of 2016; we both signed that contract and agreed to it.”

What change orders may have led to the demolition of previous work weren’t immediately available. Jansen maintains the project scope hasn’t had any significant changes since 2016, and that issuing a Notice of Default for a construction site is an unusual route for the government to make.

“I would say that the move we’ve had to take speaks to the specificity of the situation.”

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Jansen rejects Graham’s allegations that senior members of her team have not been working closely with them. She says there are almost daily meetings held at the project level, bi-weekly meetings at the senior project management level, and monthly meetings at the executive level.

“The executive directors and project directors with AI met with Graham as recently as July 20th of this year to try and resolve these outstanding issues.”

As it stands, the government is expecting a mitigation plan from the contractor by the end of business on August 22nd.

The construction manager for the Grande Prairie Regional Hospital says the province’s notice of default is “rife with errors and misstatements.” Graham Construction was issued the notice Monday, with the government giving it 15 days to come up with a plan to get the $763-million project back on budget and schedule.

In a release, Graham says Alberta Infrastructure has been aware for years that the design for the hospital would cost more than its budget, calling it an example of “shooting the messenger”. It adds that since 2011, there have been ongoing changes to the design and scope of the project, including more than 600 change orders and 400 design clarifications in the last two years.

“63 approved design changes and 34 new scope clarifications in June 2018 alone,” the company says. “Many changes required demolition of completed work to accommodate the new scope, affecting project cost and schedule.”

On Monday, Minister of Infrastructure Sandra Jansen said Graham had recently asked for another $120 million on top of their $510 million contract from 2016. The contractor argues that isn’t true, saying it told the province late that year that the estimated cost of design was $583 million.

“Monthly update reports were provided to [Alberta Infrastructure] since the start which included cost and schedule updates and repeatedly alerted A.I. of a forecasted $70 – $85 million shortfall.”

It adds the province recently asked for a projected cost to finish the building based on the current approved design, in which Graham included a contingency fund of $35 million. The company also rejects Jansen’s claims that the government has worked closely with the construction manager, alleging all meetings have been cancelled by senior ministry staff.

“Graham remains open to meet with A.I. at any time, in hopes of resolving the issues and avoiding further costs and damage to the project.”

Graham says it will not be commenting further. Jansen has scheduled a press conference for Thursday afternoon. The Grande Prairie Regional Hospital Foundation has declined to comment on the matter.

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