Eastern Health facing suit

Steve
Steve Bartlett
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Authority acted unfairly on tenders, contractor claims

Eastern Health is being sued over its handling of two tenders the plaintiff contractor had valued at almost $10 million.

Olympic Construction filed a statement of claim against the health authority in Supreme Court Aug. 13.

The suit actually makes two claims - one regarding a 2007 tender for an extension to the Caribou Pavilion and another from earlier this summer concerning a bid for a gynecology suite relocation at the Janeway.

Court -

Eastern Health is being sued over its handling of two tenders the plaintiff contractor had valued at almost $10 million.

Olympic Construction filed a statement of claim against the health authority in Supreme Court Aug. 13.

The suit actually makes two claims - one regarding a 2007 tender for an extension to the Caribou Pavilion and another from earlier this summer concerning a bid for a gynecology suite relocation at the Janeway.

On the pavilion claim, Olympic says its $3,003,692 bid wasn't the lowest, but it was the only one that complied with the tender and all other bidders were disqualified.

The company says Eastern Health then cancelled the tender because "there were no qualified bids that met the budget allocated for this project."

Olympic says it was advised the project would be re-tendered, and that it eventually went to another firm.

But the contractor argues Eastern Health did not alter the scope of the work in re-tendering and effectively tendered the project a second time after bids were opened.

Re-tendered without changes

By re-tendering without changing the project, the contractor says Eastern Health failed to follow the rules.

Olympic says because it made the lowest qualified bid, the authority was obliged to award it the contract.

"The defendant has acted unfairly and in bad faith in re-tendering the project and awarding the contract to another bidder," the statement of claim reads.

The second claim concerns an extension to the Janeway for a relocated gynecology suite.

Olympic says it put in the lowest bid on the work, $6,725,458.87.

The company claims three days after the tenders were opened, around June 28, it was told the bid was disqualified because the company hadn't attended a mandatory meeting.

But the plaintiff says it attended such a meeting June 22, and because it submitted the lowest qualified bid, Eastern Health was supposed to award it the contract.

In giving the work to the second lowest bidder, Olympic makes the same arguments it did on the first claim - that the health authority failed to follow the rules and, again, acted unfairly and in bad faith.

The company wants Eastern Health to pay it the fees and profits lost on both tenders, plus the cost incurred preparing the bids.

The claim includes $170,020 in special damages with respect to the pavilion contract and another $684,712 from the gynecology suite deal.

The plaintiff is asking for HST on those sums as well as the applicable interest.

Olympic Construction declined comment, saying the court document speaks for itself.

A spokeswoman for Eastern Health said the authority will file a defence to the contractor's claim.

sbartlett@thetelegram.com

Organizations: Janeway, Supreme Court

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Recent comments

  • Bones II
    July 02, 2010 - 13:34

    Frank: Can you tell us which buddy this went to or are you one of the haters that likes to blow smoke when there isn't a real story to talk about?

  • Frank
    July 02, 2010 - 13:29

    WE all know the tender had to get to one of Dannys buddies one way or another. The corruption continues. Get use to it.

  • tom
    July 02, 2010 - 13:26

    If indeed the suit is won by the contractor. I think the person who made the decision to retender should be disnissed with no pension and have to pay back the government. Its time that those people who make all decisions pay for theit doings. I refuse to call it a mistake

  • tim
    July 02, 2010 - 13:23

    I have seen a lot of blatant unfair maneuvering by this NL Government and it makes me very concerned.
    If it is unfair, shady and not in the realm of good Government then we need to be concerned. I feel this Premier is very vindictive and he is manipulative for his own interest rather than for the provinces best interest, that is a shame, he has no good reason to be like that. He has lost my respect and support. He could have cleaned house in the Eastern Health Care from the very beginning but he added to the mess. He don't need the job but he likes the job for his ego.

  • SANDY
    July 02, 2010 - 13:21

    And the WINNERS of these two bid are.......no names given.! Why not?

  • Peter
    July 02, 2010 - 13:15

    This is a bit of a joke, and the article is only telling one side of the story.

    This case should easily be dismissed.

  • Heather
    July 02, 2010 - 13:14

    I work in the construction industry and there is nothing fair in the tendering process. Jobs are often retendered because someone doesn't like the amount of bids received or from whom they were received.

  • Gappin
    July 02, 2010 - 13:13

    The losers here are the patients (again). Now money will have to be diverted from healthcare to pay for lawsuits.

  • Matt2
    July 02, 2010 - 13:09

    Heather - you're right. And suits like this are needed to bring a halt to these unfair processes.

    True, it does say Lowest Bid Not Necessarily Accepted (actually that's a poor paraphrase, but it'll do for now) on the call for Tenders. However, the public tendering act is very specific on the reasons why this may be so, and the act has to be followed. Olympic's claim is founded in their belief that the Act was violated, and as such, their bid should have been accepted. One line in an ad in the paper doesn't remove the requirement for the purchaser to follow strictly the terms and conditions of the Act. For a lowest bidder to be rejected, there have to be objective reasons (incomplete tender documentation - surety, qualifications, timelines, etc - or other fundamental flaws in the bid itself). The Act is worth reading if you ever intend to do business with a public agency.

    Olympic has picked up quite a few government projects under Danny, BTW, so I doubt they've suddenly been tossed aside now due to his personal dislike for them. I suspect those comments are based on silly and uninformed bias against the Premier. People do love their conspiracy theories, I guess.

    As for the other side not being reported, there's nothing Eastern Health CAN say until they file their defence in court, which they probably will, unless they know their goose is cooked and try to settle prior to that. I too, however, would like to know who the successful bidders where in each instance - surely that Telegram could find that information easily enough.

  • Coda
    July 02, 2010 - 13:09

    All government tenders state Lowest bid not necessarily accepted . So, Olympic Construction' argument along those lines won't fly in court.
    Thus, his only recourse is the re-tendering principles. Good luck with that one!!

  • Bones II
    July 01, 2010 - 20:23

    Frank: Can you tell us which buddy this went to or are you one of the haters that likes to blow smoke when there isn't a real story to talk about?

  • Frank
    July 01, 2010 - 20:16

    WE all know the tender had to get to one of Dannys buddies one way or another. The corruption continues. Get use to it.

  • tom
    July 01, 2010 - 20:12

    If indeed the suit is won by the contractor. I think the person who made the decision to retender should be disnissed with no pension and have to pay back the government. Its time that those people who make all decisions pay for theit doings. I refuse to call it a mistake

  • tim
    July 01, 2010 - 20:08

    I have seen a lot of blatant unfair maneuvering by this NL Government and it makes me very concerned.
    If it is unfair, shady and not in the realm of good Government then we need to be concerned. I feel this Premier is very vindictive and he is manipulative for his own interest rather than for the provinces best interest, that is a shame, he has no good reason to be like that. He has lost my respect and support. He could have cleaned house in the Eastern Health Care from the very beginning but he added to the mess. He don't need the job but he likes the job for his ego.

  • SANDY
    July 01, 2010 - 20:05

    And the WINNERS of these two bid are.......no names given.! Why not?

  • Peter
    July 01, 2010 - 19:55

    This is a bit of a joke, and the article is only telling one side of the story.

    This case should easily be dismissed.

  • Heather
    July 01, 2010 - 19:52

    I work in the construction industry and there is nothing fair in the tendering process. Jobs are often retendered because someone doesn't like the amount of bids received or from whom they were received.

  • Gappin
    July 01, 2010 - 19:52

    The losers here are the patients (again). Now money will have to be diverted from healthcare to pay for lawsuits.

  • Matt2
    July 01, 2010 - 19:45

    Heather - you're right. And suits like this are needed to bring a halt to these unfair processes.

    True, it does say Lowest Bid Not Necessarily Accepted (actually that's a poor paraphrase, but it'll do for now) on the call for Tenders. However, the public tendering act is very specific on the reasons why this may be so, and the act has to be followed. Olympic's claim is founded in their belief that the Act was violated, and as such, their bid should have been accepted. One line in an ad in the paper doesn't remove the requirement for the purchaser to follow strictly the terms and conditions of the Act. For a lowest bidder to be rejected, there have to be objective reasons (incomplete tender documentation - surety, qualifications, timelines, etc - or other fundamental flaws in the bid itself). The Act is worth reading if you ever intend to do business with a public agency.

    Olympic has picked up quite a few government projects under Danny, BTW, so I doubt they've suddenly been tossed aside now due to his personal dislike for them. I suspect those comments are based on silly and uninformed bias against the Premier. People do love their conspiracy theories, I guess.

    As for the other side not being reported, there's nothing Eastern Health CAN say until they file their defence in court, which they probably will, unless they know their goose is cooked and try to settle prior to that. I too, however, would like to know who the successful bidders where in each instance - surely that Telegram could find that information easily enough.

  • Coda
    July 01, 2010 - 19:44

    All government tenders state Lowest bid not necessarily accepted . So, Olympic Construction' argument along those lines won't fly in court.
    Thus, his only recourse is the re-tendering principles. Good luck with that one!!