Yukon News

Embattled contractor speaks

Josh Kerr Friday January 11, 2013

Ian Stewart/Yukon News

Norcope

Norcope Enterprises workers protest in front of the Yukon government building in June 2011.

Doug Gonder wants to set the record straight.

The owner of Norcope Enterprises, who has been embroiled in a lawsuit with the Yukon government over a contract his company held for the new Whistle Bend subdivision for a year and a half, has up until now avoided talking publicly about the case.

But now that the government has filed a countersuit accusing his company poor workmanship, he’s had enough.

“I’ve done this line of work my whole life, and I’ve never had to deal with the amount of crap that’s been brought into my lap with this job,” he said. “It’s an insult to the people who did professional work there.”

Problems started soon after Norcope Enterprises won a $15.9-million contract to install underground utilities in the first two phases of the subdivision.

Almost immediately after the tender was awarded, the government issued changes to the design that got rid of a sewer lift station and changed the slope of the subdivision so it drained to the north, rather than the south.

To change the slope, the government decided to dig up a natural sand dune on site - which was a protected natural feature under Whistle Bend’s original plans - and use it to raise up the levels of 187 lots.

Norcope assumed that the new work fell under its contract and bought and leased new equipment to do the job.

From Gonder’s perspective, there was no time to waste.

Under the terms of the contract his company would be penalized for any delays in he construction schedule.

Norcope’s estimate and revised schedule to do the work was rejected by the government as too expensive and too long.

Instead the government awarded the work to Sidhu Trucking, leaving Norcope with a bunch of expensive equipment it didn’t need.

Not only did the government issue a “change order” giving $2-million worth of work to Sidhu, but it issued another one that actually reduced Norcope’s contract by $600,000 because the design changes now required less excavation work.

Fed up, Gonder decided to take it to the streets.

He had his work crews surround the Yukon legislature with the idle heavy equipment in protest.

The government’s decision to give the extra work to Sidhu without putting it out to tender angered other contractors as well.

Castle Rock Enterprises has argued that the entire Whistle Bend contract should have been put back out to tender after it was redesigned.

While it didn’t endorse Norcope’s protest, the company said that it was “very pleased to see that the issue of YTG’s contracting practices is finally coming to the attention of the Yukon taxpayers,” in a press release issued at the time.

Eventually Norcope took its fight from the street to the courtroom, filing a lawsuit against the Yukon government accusing it of breach of contract.

The two sides ended up settling that issue out of court, but Gonder says that he’s still owed millions of dollars for work he did on the subdivision.

Further changes to the design made by the government forced him to bring in and handle extra material, and there were delays.

In August the government demanded he stop work on a section of Casca Blvd., only to tell them to start back up 41 days later. That meant the company had to work in frozen conditions to meet its construction schedule. That delay alone cost $300,000, said Gonder.

It’s not the first time that he’s had this kind of problem with a government job, said Gonder, but it is the first time he’s taken it to court.

“I’ve walked away time and time again from $50,000 disputes knowing that YTG would just keep dragging out legal costs, but this claim is just too much for us to do that,” said Gonder.

Other contractors, who spoke on condition of anonymity, said they’d experienced similar problems dealing with one-sided government contracts and frustrating negotiations.

The government is countersuing Norcope claiming that it refused to repair deficiencies in the water mains it installed.

But in May of 2012 the government gave Norcope a list of deficiencies that it took care of, said Gonder.

“Their consultant went through with our guys and we fixed everything that was videotaped, everything that was on the list of repairs, and they paid us our hold-back,” he said.

In court filings the government asserts the cost to repair the new problems will be substantial because it will involve ripping up paved roads and concrete curbs. But Gonder questions why the government would pave over underground utilities if it knew there were problems.

Because the case is now before the courts, no one from the government would respond to any specific allegations.

“The Yukon government, having become engaged in the court process, is going to make its arguments there and not in the court of public opinion,” said Thomas Ullyett, assistant deputy minister of justice.

It will be a long time before that happens. The case is scheduled for a 12-week trial in the spring of 2014.

The trial is a big waste of time and money, said Gonder.

“They’re spending millions of taxpayers’ dollars to debate me on that, rather than bringing in an engineer to identify the cost to do the work,” he said.

The government has retained a Vancouver law firm to represent it in this case, but Ullyett couldn’t say how much the case had cost to date.

“What the Yukon government is after, of course, is a resolution to this dispute that is fair and is reasonable and that will pay Norcope for all the work that has been properly performed and ensure that there is fair value for this pretty considerable expenditure of public funds,” he said.

Contact Josh Kerr at .(JavaScript must be enabled to view this email address)

13 Comments

2 sides to every story wrote:
6:09pm Sunday January 20, 2013

Don’t consider my comments as a YTG response. They are not - nor am I affiliated with them in any way. You state you are taking YTG to court solely because they failed to give you extra work. As I recall the news reports they tried to negotiate a cost for that extra work with you, but you couldn’t agree with any reasonable amount. Sidhu Trucking however came up with a reasonable price. Now you are whining because YTG saved the taxpayers a bunch of money? Time to grow up if you want to play in the big leagues.
I think YTG is being accountable to the taxpayers. I also think the contractors that are watching this case closely are doing so primarily to see Norcope go down, although I’m sure they wouldn’t mind if a head or two rolled in Community Services.

reply: 2 sides to every story wrote:
6:47am Saturday January 19, 2013

Well finally a YTG response that we all have been waiting for, and the type of attitude I think the contractor was referring to, no knowledge or insight to the situation yet can lead everyone in the wrong direction deflecting the real situation.
It seems if you had any insight into the issue you might have read earlier articles about the court issue which has nothing to do with specifications. The reason the contractor was lead into this situation of acting with litigation, was to collect for new work added to the contract which YTG breached the terms and condition’s and underpaid the work completed.
Only a person that has no accountability to answer for Yukon tax dollars could post such a reply that would see litigation as the only method of dealing with the government.
All contractors are eagerly waiting for the department of community services to finally be accountable, and if it is settled out of court this probably will not happen, maybe a fund could be set up to ensure this contractor does go all the way!!!!!

Power Of Money wrote:
6:30am Saturday January 19, 2013

Happy, happy Lawyers. Money, money, money….............

2 sides to every story wrote:
1:15am Saturday January 19, 2013

Response to my last comment seemed to come from the contractor himself.If so here are a few of my thoughts:
I think you have been listening to your own story so long you actually believe it. If you feel strongly that you have been wronged stop whining about the cost and prepare yourself for court. I believe the only reason YTG is going to court with you is because you have not been, nor does it appear you intend to be reasonable.

YTG has no interest in spending millions in court but they need to see the contract completed to specifications. You are the one pursuing court action - so get on with it. We will await the outcome - then maybe, just maybe the truth will be out.

reply: 2 sides to every story wrote:
8:09pm Friday January 18, 2013

No contractor wants to enter conflict thru the courts with YTG having deep enough pockets to win, this is a last ditch effort if need be. YTG is in court because they breached conditions that are fair work practices. They bypassed the contracts conditions by failing to negotiate, they further breached it by not going to the second terms using time and material plus 15%.
I’m sure YTG could go to any idle contractor and offer work, having the contractor jump to the opportunity without a competitive bid, just handed to them. In the fairness of how our tax dollars are spent with the ethics and obligations of submitting work to the general public, if this was new work why was it not tendered out for fair bidding process?
You cannot compare a $1 difference in price per meter and say YTG did not receive a fair value in negotiation.
While they offered a far less price to the onsite contractor than they gave
to Contractor #2, they also gave contractor #2 double the time to complete this work, and offered conditions that gave a less work cost advantage to complete. While the original contractor would have to work longer hours, double the equipment, contractor #2 came on site and performed the work taking double the time and left the site unfinished. 
When you look at the cost contractor #1 could have done the work for, you add the legal cost of $1 million or more, plus what they were paid for the breach of the contract, maybe contractors original price to do this work was a bargain!

2 sides to every story wrote:
6:45pm Thursday January 17, 2013

It is easy to blame Govt for everything that goes wrong with a contract, but lets remember there was significant pressure to get residential lots onto the market;and, the City of Whitehorse was responsible for planning/design. They decided they could’nt live with the original design just before the contract award was to be made.

Contract law allows for negotiations with the successful bidder. Given the pressure to develop land, negotiation seems to be a good option. In order for success however, the contractor must be reasonable in his approach to settlement. Several writers have mentioned the millions of dollars wasted by Govt fighting the contractor on this project. None have spoken about the millions of dollars that may have been wasted had they simply agreed to the contractors “best” price for the additional work. Don’t forget Sidhu Trucking also was also awarded a publically tendered job on Whistle Bend Subdivision which was active as these negotiotions were ongoing with Norcope. It was just as legitimate to negotiate with Sidhu as Norcope. The difference was Sidhu’s cost for the extra work was significantly less than Norcope’s. By awarding the extra work to Sidhu the Govt actually saved money.

I think there are two sides to every story and as time goes by and settlement comes, we’ll see that perhaps Govt isn’t making as many mistakes as everyone seems to think, and maybe, just maybe, the contractor isn’t being as forthright as he could be with the truth.

burdened tax payer wrote:
8:07am Wednesday January 16, 2013

I’m appalled that the minister has sat back and watched community services run out of control with valued tax payers dollars on this project.
What has been the legal costs to date to battle the contractor so they do not have to pay a fair dollar for the work added to their contract????
Surely there has to be someone that has the experience to intervene to get this mess straightened out. We are simply tired as tax payers seeing the same issue with contractor after contractor embattled within community services struggling to resolve simple issues that turn out to be original
blunders of this department in the first place.
I agree with the earlier comment the auditor general needs to investigate the contamination within this department immediately.
There seems to be much more info slowly leaking out from the operations of this department.
Its about time these people are held accountable for this mess.
As a tax payer watch Yukon dollars spent wastefully, we are all up to our limits of frustration which can no longer be tolerated.
Accountability now!!!!!!!

hmmm wrote:
10:18pm Monday January 14, 2013

I have been doing procurement for almost two decades and from what I have watched and read YTG procurement should be smacked upside the head. They are suppose to uphold public procurement practices and not allow messes like this to happpen. They should have done a better job putting the Contract together. It sounds like no one in YTG know how to procure a proper contract and run one. I also bet there are some politics going on because under AIT and NAFTA giving 2mil without going to market is breaking those laws. Any Contractor can put forward a challenge under AIT and NAFTA.

Steve O wrote:
3:03am Monday January 14, 2013

Sidhu seems to be doing OK. They must have a different approach with YTG.

Jay Wrent wrote:
7:48pm Sunday January 13, 2013

There is more construction in Whitehorse than I have seen in decades. Most of the projects are private. The infrastructure of the City is deplorable. YTG takes advantage of complex contracts, punitive clauses, and confusing legal babble. It is scary to deal with YTG. You just never know when they will turn on you and use the might of their formidable “legal” resources against you. Building the modern city of the future requires a mutual commitment to act in the interest of the public.

yukonpolitics_hahaha wrote:
7:50pm Saturday January 12, 2013

As with any other development in the Yukon pushed by interest groups no one looks at the big picture. Construction, construction, development, development…, but where are the plans to make it fit reality? What about the infrastructure, laid out for a much smaller population? The roads are congested, no parking, etc. Little (expensive but dangerous) round-abouts won’t help! Nothing but bandages on growing problems resulting from no planning.

yukon resident wrote:
7:12pm Saturday January 12, 2013

the planning and engineering design is the responsibility of the city of Whitehorse.  The drawings are turned over to YTG to tender and construct.  It appears to me that this project is a comedy of errors right from the start.

former MLA wrote:
10:20am Saturday January 12, 2013

The extent of government heavy-handedness in this case is inexcusable! Ditto with its failure to properly plan the development despite years of planning! For years, government ministers boasted about the necessity of taking proper time to do it right amid the lot shortage crisis that prevented hundreds of new residents moving to Whitehorse! It turned out major changes were required from the get-go! And even the changes were a mistake! What a disaster! Kudos to the contractor for having the guts to stand up to the government ... most wouldn’t have done it for fear of reprisals! Then there’s the cover-up ... why did the government insist on a confidentiality clause in the first settlement with this contractor? Why doesn’t your own government want you to know what it cost you? And it’s hiding more screw ups. As if all this isn’t enough, the government is deploying intimidating tactics including trying to smear the company’s name. This case needs a full independent investigation with recommendations on how to improve the contracting system! Yukoners should settle for nothing less!

Add a comment

Commenting is no longer available for this story. Commenting expires 21 days after publishing.