The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Sebas Bastian last night said his Brickell Management Group (BMG) had “a bitter taste in our mouth” after losing money on the $6.4m contract to construct 213 dome homes in Abaco post-Hurricane Dorian.

The Island Luck principal told Tribune Business that Brickell was still owed funds by the Government after seeking to perform what he branded “a national service” through acquiring - then installing - “a massive housing solution” in the aftermath of the devastation inflicted by the Category Five storm.

He added that constant changes demanded by the Government to “the scope of work”, as well as the failure to make timely payments to Brickell, led to the group walking away from the dome home construction deal. Mr Bastian, though, said the group handed over all the construction materials it had imported to the Government’s agencies, and provided invoices that could account “for every single screw”.

The Government, though, failed to properly secure the construction materials that were handed over and some “got legs”, Mr Bastian added. This was confirmed by the Disaster Reconstruction Authority’s (DRA) accounts for the 19-month period between December 1, 2019, and end-June 2021, which revealed the disappearance is under investigation while the remaining materials have been deemed “obsolete” and totally written-off via a $1.525m one-time hit.

The audited financial statements, tabled in the House of Assembly yesterday, revealed that Brickell received $4.6m - or 71.9 percent - of the total contract amount despite completing just 34 or 16 percent of the dome home target. Mr Bastian’s group was also reported to be locked in back-and-forth negotiations with the DRA over the remaining payments it alleges are owed.

The DRA’s deal with Brickell “did not require ‘specific performance’”, the audited financial statements revealed, raising questions over the terms of the contract and whether it was sufficiently robust to prevent the contractor from walking away when it did on April 30, 2020, when the COVID pandemic and associated lockdowns were at their peak.

“At the time, only 34 of the 213 domes were fully erected on homeowners’ properties,” the DRA financials disclosed. “Of the contract sum of $6.4m, $4.6m had already been paid to Brickell in the purchase of the domes and other materials that were to assist in the set-up of the ‘Family Relief Centre’ and toward the management of the contract at that stage.

“The balance of the contract, $1.8m, remained in possession of the Bahamas Disaster Relief Fund under the control of the National Emergency Management Agency (NEMA). The DRA was later charged to manage the completion of the dome installations and undertook an exercise to determine the inventory of materials on hand and the value received on the Brickell contract, with a view to assessing any liability or recoverable amount that may exist.”

The Authority said it had determined that nothing further was due to Brickell, but the latter’s “initial position was that they were owed $1.129m. They were prepared to settle for a sum of $1m, which was further reduced to $600,000. Negotiations are continuing on this matter, but as at June 30, 2021, the DRA had a contingent liability to pay up to $600,000 to settle the claim by Brickell”. No provision, though, was made in the DRA’s accounts for the period.

Mr Bastian last night confirmed Brickell’s position that it is “still owed money” by the Government over the Abaco domes, adding: “Who knows when we’re going to get paid?” While not revealing the sum involved, he added that the deal had been “a fixed price” contract where the Government paid “whatever it cost us” to acquire the construction materials, hire the labour and install the domes.

“As a result of the devastation of Hurricane Dorian, few homes remained unscathed,” the DRA’s financial statements added. “The Government determined that a massive housing solution was required quickly. Following the presentation of several proposals, the solution offered by Brickell Management Group was accepted and a contract for $6.4m was agreed.”

This initially called for the installation of all infrastructure, including site preparation, utilities (water, sewerage and electricity) and pathways together with construction of the 213 domes at a site in central Abaco. Work began in October 2019, but within a month it was decided that the site “did not meet certain environmental criteria” and a second location. That, too, was ultimately deemed unsuitable as Abaco residents wanted the domes at the site of their destroyed homes.

Mr Bastian, confirming this version of events, said the domes homes were initially earmarked for an 18-acre site in Spring City. However, the Minnis administration “changed its mind” and decided only 50 would be located there, with no immediate decision taken on what to do with the remainder.

Brickell, he added, constructed the 34 at Spring City as the then-government mulled what to do with the others - including whether to send some to Grand Bahama. It eventually decided to place them with individual homeowners, but Mr Bastian said this plan did not suit Brickell which had “mobilised to do one big job” and not individual installations where there would be gaps between construction starts.

“This was a time when there was zero to no housing on Abaco. The construction team down there had limited housing, and had a limited time to do one job. Working in Abaco at that time was extremely difficult. Everything had to be barged in, there was no power,” Mr Bastian said. “We only took that job to help and it was definitely outside our scope.

“They kept changing the scope of works, and we were not getting timely payments. It got to the point where we handed over the materials to them, said this is not what we were contracted for, and it would be better if you go and find a different contractor and pay us what you owe us up to that time. We’re a professional company, and couldn’t work under those conditions of confusion.

“We were under a contract where every single thing we brought in we had invoices for. In all the invoices we had, we accounted for everything we bought and imported into the country, and handed over the materials and invoices to them for every single screw. We were out-of-pocket for the management fees and some materials we bought on their behalf. My understanding is they left the materials on the site for several months, and they got legs.”

Mr Bastian likened Brickell’s involvement as akin to “national service”, and said it was “probably a mischaracterisation” to describe the domes deal as a contract. He said the $6.4m sum was supposed to cover labour costs, Brickell’s management fee and materials including “trailers and trailers of lumber”.

“We couldn’t continue to carry the load,” Mr Bastian told Tribune Business. “We were paying invoices on behalf of the Government and not being reimbursed in a timely fashion. We had a very small margin on this, only a 10 percent management fee, and if I remember we weren’t even paid that.

“We lost money trying to help, which has left a bitter taste in our mouths over that. It’s unfortunate that three years later we’re still talking about domes. It’s the most incredible thing ever.”

John Michael Clarke, the DRA’s former chairman under the Minnis administration, yesterday backed Mr Bastian by agreeing that the scope of work involving the dome homes “changed not once but twice”. He added, though, that before stepping down he believed the DRA had made a reasonable settlement offer to Brickell over the payments it claims to be owed.

“The DRA reconciled the account, and a settlement of the Brickell account was proposed to Brickell. We did a full reconciliation of the account. At the time I left, the reconciliation was finished and, to the best of my knowledge, a settlement offer was made commensurate with the work they completed. The DRA, to me, made an equitable offer for the work they actually completed,” Mr Clarke said.