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The city is coming under fire from a contractor over the tender for the most recent phase of the Niven Lake subdivision, which still has houses under construction from the last phase, as seen here. - Amanda Vaughan/NNSL photo

Contractor cries foul

Amanda Vaughan
Northern News Services
Published Friday, February 22, 2008

YELLOWKNIFE - City council is reviewing the Niven Lake Phase VII development tender after the recommended choice of bids left one of the contractors feeling shafted.

"We feel disappointed, discouraged and discriminated against," William Zatkovich told city council in a presentation on Monday.

Zatkovich told council that the Niven tender created confusion as to whether or not his company, NWT Construction, was the low bidder or not. NWT Construction and RTL Enterprises both bid on the tender for the latest phase of the subdivision, which is situated between Back Bay and Highway 4.

The phase was divided into three sections, two of which were designated "provisional" or optional sections which would be developed if the bidding contractors could reach a price that the city found attractive.

NWT Construction's bid totaled $3.71 million; RTL's was $3.797 million.

After they were received, the city's contracted consulting company, Earth Tech, reviewed the bids and recommended that the city accept a bid by RTL for the first and second sections of the development, which came out slight lower in price than NWT's Construction's bid once the third section was removed from consideration.

In his presentation, Zatkovich pointed out that his company had made the low bid on the development of the entire proposed lot, and therefore he felt that they should have been who the city dealt with for any of the sections which they wanted to develop. He also questioned the city's reasoning for the provisional sections if there was "no intent to award the complete contract," and stated that in his experience, it was not common to have "over two thirds" of a contract be provisional.

Greg Kehoe, Director of Public Works and Services, said that the optional sections were not an unusual way to structure the tender.

"It's a fair method of getting prices," said Kehoe.

The initial section of the phase was made up of 19 individual lots, and later combined with the second section made up of 11 lots. Kehoe said the city decided that 30 lots was an appropriate amount of the space to develop, based on their forecasts of lot sales.

In the discussion which ensued from Zatkovich's presentation, Coun. Kevin Kennedy said he was surprised that the city didn't feel the market would support the entire development.

"Why aren't we going ahead with all three," he asked in the meeting.

It was pointed out by Mayor Gord Van Tighem that should the lots not sell, there could be significant "carrying costs" - costs associated with maintaining unsold units. At the end of the meeting, several of the councillors said they felt they didn't have enough information before them to decide whether to go ahead with RTL on the first and second sections. At the meeting they provided Kehoe with a list of information to be presented to them at Monday evening's council meeting.

One of the things that Zatkovich stated in his presentation was that his company was exploring its legal options, and Coun. David Wind wanted the city to find out if they were dealing with a legal issue.

Zatkovich said that even if the city proceeds as planned, he would like them to "conduct a general review of the contract award process."

He said that it was not his intention to break down his company's relationship with the city, but to ensure a fair treatment.

"We need to protect our interest to justify our investment in this community," he said.

Kehoe believes that the city has proceeded fairly with the tender.

"We are confident in how it's structured," he said.

Council will decide whether to move ahead with contract as recommended.