Yellowknife (May 26/03) - The NWT Construction Association (NWTCA) fears the government's withdrawal of contracts from the public tender process will result in a collapse of the Northern construction industry.

Construction association executive director Don Worrall said industry layoffs will be imminent if cabinet continues to hand out million-dollar contracts to hand-picked construction firms.

Cabinet has already voted to negotiate a $1.2 million curling rink project with A.C. Contracting in Aklavik, a one-man business operated by Gwich'in beneficiary Andrew Charlie.

Now, Public Works and Services is also in discussions with a Tsiigehtchic development company to build a water treatment plant there. About $1.2 million has been budgeted for the project. That estimate includes design, construction and miscellaneous expenses.

Bruce Rattray, deputy minister of public works, said the department is in the process of preparing a cabinet decision paper to negotiate the contract with Arctic Red River Inc. Band, part of the Gwich'in Group of Companies. The proposal has not yet been presented to cabinet, but that will happen soon.

"We are still in design stage so we are not actually at the point of sitting down and negotiating yet, but that will be coming along in the not too distant future," said Rattray.

The department usually enters into somewhere between one and four negotiated contracts per year, according to Rattray.

In the NWTCA Bulletin published May 19, the association warns government that "withdrawing contracts from public tender ultimately obstructs economic development at the expense of all taxpayers."

Rattray would not respond to that comment.

Worrall said the construction association's position is that "we are upset with all business of negotiated contracts."

He said the association's main concern is negotiated contracts are detrimental to other Northern construction firms that have put a lot of time, money and energy into the competitive process.

"This is denying them the opportunity to bid on these things and it's going to put some of them in a perilous situation financially with the loss of jobs that that entails," said Worrall.

If there is nothing to bid on, he warns that eventually the contractors not benefitting from negotiated contracts may have to "close up shop."

And the real losers will be the taxpayers, he said.

"If the project is tendered the price is bound to be lower than if it's handed over to somebody."

When asked if the Tsiigehtchic company has the expertise to build a water treatment plant, Rattray replied he hadn't talked to them "enough to know yet."

"They don't know what we want to build and we don't know what resources they will bring to the construction yet.

"Those conversations haven't taken place yet," he said.

The project is expected to be completed by next winter. A proposal will most likely be introduced to cabinet in the next few weeks.

The construction association is preparing a set of recommendations for cabinet, asking them to alter the guidelines for awarding negotiated contracts.

"There are far better and less damaging ways to build Northern capacity than negotiated contracts," said NWTCA president David Tucker.

"The goal of capacity building is laudable, and even more laudable with aboriginal-owned companies," said Tucker.

"But in our view they are taking a pretty simplistic view in what it takes to achieve that long-term."

The NWTCA has 130 member companies in the territory.