The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Public Hospitals Authority (PHA) yesterday said it was “resolute” in its position that it did not owe Cavalier Construction $5.577 million for the Critical Care Block construction, saying it was willing to publish documents supporting its case.

Responding to Cavalier’s assertion that it was owed this sum as a combination of an ‘extension of time’ claim, and the final 5 per cent contract balance, the PHA continued to demand that the contractor provide documentary proof to support its claim

“The record will show that apart from the final retention, which is due contractually at the presentation of the full Occupancy Certificate, and at the end of the 12 month liability period respectively, the contract amount as agreed between Cavalier and the Public Hospitals Authority has been paid in full,” the PHA statement said.

“What is noteworthy is that Cavalier Construction is aware that in spite of not completing the contract requirement for Practical Completion, the Public Hospitals Authority has released substantial amounts in retention monies in anticipation that these requirements would have been completed earlier this year.”

The PHA added that it was willing, with Cavalier’s agreement, to make publicly available documents supporting its position.

It then alleged that Cavalier had breached one term in their agreement by making details of the contract available in this newspaper, and said the contractor had failed to complete all that was necessary to fulfill the Practical Completion requirement.

“Cavalier is fully aware that the conditions for practical completion, as required by the contract between Cavalier and the Public Hospitals Authority, was clearly laid out in a matrix presented to Cavalier detailing the list of work not yet completed. Indeed, as of September 1, Punch List items remain outstanding,” the PHA said.

Cavalier, though, has told Tribune Business that these ‘punch list’ items include things such as a ‘nail in the sidewalk’ and the need to replace dead plants that are part of the landscaping.

It argued that the latter is no longer its contractual obligation, and suggested that the PHA and its consultants were invoking ‘frivolous’ matters to stall paying on the contract.

Tribune Business revealed on Monday how Cavalier had given “formal legal notice” to the PHA that it was taking their $5.5 million dispute to arbitration, accusing it of being “disingenuous” in demanding that the contractor ‘prove its claim’.

Accusing the PHA of employing “stalling tactics” in relation to their differences over the Princess Margaret Hospital’s Critical Care Block construction, a senior Cavalier executive said it had been provided with ample documentary evidence to support the contractor’s claim.

Steven D’Alewyn, the company’s chief financial officer, told Tribune Business in a statement: “The plain truth is that extensive information regarding this claim was provided to both the PHA and their advisors during the course of the work dating back to September last year.

“We again submitted detailed submissions and calculations in respect thereof over two months ago. We were informed to expect a professional, thorough and non-partisan response from the contract administration team to our last submission. That response has never been received.

“Accordingly, we consider it highly disingenuous for the PHA to go on public record asking us to prove our claim.”

As revealed by this newspaper, the contractor is claiming $5.5 million for the ‘extension of time’ to complete the Critical Care Block and the final 5 per cent of the contract sum by the Government-owned PHA.

Cavalier is alleging that it has not been paid for work done on the Critical Care Block since November 2013, and is effectively funding ongoing work from its own pocket,

It is alleging that the PHA is simply refusing to recognise the validity of its claim, a charge repeated yesterday.

“Faced with stalling tactics, delaying tactics, and with the PHA and its consultants wrongly refusing to entertain - much less recognise - our entitlements, Cavalier has been left with no alternative but to invoke the dispute resolution provisions under the contract,” Mr D’Alewyn said.

“Cavalier some weeks ago sought mediation of the issues and extended an initial offer to agree on a mediator, which offer was met with no response at all from the PHA.

“Mediation now having failed solely because the PHA has declined to participate, Cavalier is proceeding to arbitration and has given formal legal notice thereof to the PHA requiring the PHA to concur in the appointment of an arbitrator to hear and decide the disputes.”

Mr D’Alewyn said Cavalier would also seek reimbursement of its dispute resolution costs, which he described as “substantial and will ultimately fall on the Bahamian taxpayer”.

He added: “The building has been completed for some time and is fit for purpose subject to ongoing design changes. This important facility was scheduled to open in 2013, and is unlikely to come fully on stream for essential health care until 2015.

“The chairman of the PHA recently proclaimed that delays were attributable to insufficient staffing and to problems in securing financing for the equipment. No mention was ever made to the structure and design remaining incomplete long after the project was due to be finished.

“Given that further important phases of this hospital are also planned for the betterment of Bahamians, one is given to wonder when these might ultimately come on stream.”