MHIG is seeking compensation for additional costs incurred
during the design and construction of the MUHC Glen site, as well
as for costs related to MUHC asset maintenance and
management.
The additional costs incurred by MHIG stem from the numerous
instructions and changes made by the MUHC as well as the value of
the additional work it requested.
MONTREAL, April 1, 2016
/CNW Telbec/ - McGill Healthcare Infrastructure Group (MHIG), a
partnership composed of SNC-Lavalin (TSX: SNC) and Innisfree, announced that it has filed today a
lawsuit of 330 million dollars
against the McGill University Health
Centre (MUHC) and the Government of Quebec and is claiming compensation for
additional costs incurred during the design and construction of the
MUHC hospital centre's Glen site (the Project), as well as for
present and future costs related to managing and maintaining the
hospital centre's assets.
After more than two years of negotiations which have not been
fruitful, MHIG now has no other choice but to turn to the courts,
as the agreement provides.
Under its agreement with the MUHC, MHIG is responsible for
financing, designing, building and maintaining the hospital complex
as well as managing its assets until September 30, 2044. MHIG is entitled to
compensation from the MUHC to cover costs associated with the
additional work that was requested and the need to fast-track work
in order to prevent any delays to the project. MHIG delivered a
quality, functional complex to the MUHC in accordance with the
conditions and schedule set out in the agreement.
Specifically, the additional costs are directly related to the
numerous changes requested by the MUHC to enhance and expand the
health complex above and beyond the scope of the contract, the
MUHC's inability to provide information about the facility's layout
and equipment destined to the health complex in a timely manner,
and the MUHC's misuse of the review process.
About McGill Healthcare Infrastructure
Group
McGill Healthcare Infrastructure Group, G.P.
(MHIG) is a general partnership made up of SNC-Lavalin and
Innisfree. As part of a
public/private partnership (PPP) with MUHC, MHIG has designed,
built and financed the new hospital complex at the MUHC Glen site,
which it will operate until
2044.
www.gismcgill.ca
APPENDIX
Numerous changes increasing the size of the
facility
The changes requested by the MUHC, which included adding a
sterile core to the operating area and expanding the central
pharmacy, meant that the facility needed to be 5,028 square meters
(54,121 square feet) bigger than originally planned. Most of the
many changes required were requested at a point in time in the
building process that had a major negative impact on MHIG's work
and resulted in considerable amounts of both incremental cost and
lost time and productivity.
Inability to provide layout information in a timely
manner
The MUHC did not provide site layout information in a timely
manner, which caused MHIG's construction teams to proceed with
their work with incomplete or incorrect information so that they
could make progress to meet the Project delivery deadline. When
layout information did become available, it often meant that
changes had to be made to structures that had already been built.
Throughout the construction process, delays and changes on the part
of the MUHC resulted in work being completed out of sequence and
being subject to amendments resulting in cost and delivery deadline
progress impacts, such as:
- Revisions to drawings and specifications;
- Demolition and reconstruction of walls and ceilings;
- Modifications to mechanical-electrical systems already
installed;
- Delays in finishing works, including a delay of several months
to close up walls and ceilings.
Inability to provide equipment information in a timely
manner
Several times during the Project, the MUHC did not provide
equipment lists and specifications in a timely manner, making it
difficult for MHIG to ensure on-time completion of works. With this
information lacking, MHIG was forced to create drawings and
specifications based on equipment available on the market and
achieve the design and construction work based on these
assessments. When the actual equipment selected by the MUHC was
finally communicated to MHIG, this necessitated expensive changes
to designs and construction work to accommodate the selected
equipment.
The MUHC's misuse of the review procedure
When requesting changes to the initial plan, the MUHC should
have issued change requests or change orders, as stipulated in the
agreement, which would have allowed MHIG to obtain additional time
and compensation. Instead, the MUHC imposed new requirements and
changes on MHIG by repeatedly misusing the review procedure to
suggest that MHIG's work was not meeting specifications (which kept
evolving with the changes MUHC required to the plan). By misusing
the review procedure, the MUHC required MHIG to change several
aspects of the design despite the fact that the design submitted by
MHIG met the requirements set out in the agreement, and this
resulted in additional costs and delays which had to be made up by
MHIG to meet the project deadline.
Asset management and maintenance
The changes requested by the MUHC also had had considerable
impacts on the management and maintenance of the hospital assets,
as these activities are directly affected by the size of the
complex and the type and number of equipment items and systems
included in the facility.
In addition, even though the agreement stipulates that the MUHC
can carry out some maintenance and repair works, these works must
fall under the change procedures provided for in the agreement. And
yet, the MUHC has carried out and continues to carry out this type
of work unilaterally, which results in several negative
consequences for MHIG, including:
- It prevents MHIG from ensuring that these works comply with
applicable standards;
- It forces MHIG to dispatch inspectors to provide guidance for
the works, especially regarding health and safety issues;
- It undermines the integrity of the assets by potentially
voiding the extended warranties issued by various contractors and
suppliers;
- It prevents MHIG from properly maintaining the inventories and
asset registration required so that MHIG may uphold its
responsibility to perform the maintenance required as a result of
these works.
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SOURCE SNC-Lavalin