EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
I imagine that there were inspections on the property prior to any work being initiated or funds being allocated to the project.
It seems that this is being portrayed as an emerging issue, as something that they have just discovered.
It appears as if the lands were not inspected properly and that seems to be the case here.
Can I get some clarification as to why the technical assessment seems to have overlooked this problem prior to the work being undertaken?
I will have my deputy clarify Mr. Arvaluk’s question, Mr. Chairman.
I believe the department followed their normal procedures in terms of making sure that the project was undertaken in the right way.
During the work, I understand what happened was that when the ground was dug up, it was dug up a bit too deep and that caused some permafrost melt.
In order to rectify the problem, then they had to put gravel back into the ground, I don’t remember what the amount is but they had to put certain amounts in, and that led to the cost overrun.
I believe that this is not the government’s responsibility as this was as a result of the contractor’s actions. I believe that the contractor dug the land and from what I was told, it may have been too deep.
The government didn’t cause this problem, so I don’t think the government should be at fault. Why does the government have to be responsible for this additional cost?
Perhaps the Minister of Community and Government Services is in a better position to answer that question as this project is under their department, Mr. Chairman.
I can’t really answer the question.
I will discuss this issue with my staff and try to get more background information.
Time is short and your question is relevant as this does seem to be the case here.
We need to determine whether or not the government is liable for those additional costs and resolve it. Was it the contractors that are liable for digging up the permafrost?
I cannot really provide any further clarification to that question at this time.
That puts me in a bind.
I imagine that the government agreed to the change, that yes, the area being dug up melted the permafrost because they dug too far down. Did the government want that area dug out?
They had to put more landfill there at a cost of $3.8 million.
The government must have agreed with the contractor and hence, they are requesting extra funding for the Arctic Bay Airport Project due to the issues they found.
I believe that we have to get complete clarification about this project since we will have to approve the appropriation.
The government requests more funds only if they accept the cost overrun of a project.
The government, once apprised of the extra costs, cannot just simply agree and there would be further inspections required as to whether they have to add the extra costs to a project.
At some point, I would like the minister to inform the House as to the exact reasons for the cost overruns and why the government agreed to pay an additional $3,837,000 for this.
Hon. Louis Tapardjuk (interpretation): Thank you, Mr. Chairman. I think the question would be better addressed by the Minister of Community and Government Services because they are responsible for those projects, Mr. Chairman.
In the new fiscal year, the contractor submitted the invoice which was then forwarded to headquarters for process as the invoice was in excess of the signing authority of the regional office.
On June 24, 2008, upon receiving the invoice, CG&S senior managers notified client departments and the Department of Finance about possible cost overruns on the airport project.
Steps were then taken to investigate what happened and what steps were needed to take after the fact.
From thereon, disciplinary actions on staff were involved. CG&S senior managers have taken disciplinary action to staff that were involved in the appropriation action.
As this is a sensitive human resource matter, I will not get into the details and it is an ongoing process that has not been completed yet.
I appreciate the minister’s answer. I am not interested in getting that or asking questions on the human resources’ aspects of that.
I had no clue whatsoever and this is completely new to me. I was not briefed on that particular issue. However, I’m less interested in that.
There must have been a technical assessment made before Requests for Proposals or anything like that is issued. Technical assessments must have been done there on how much it would cost.
This is a huge oversight on the part of the department, $4 million…
I mean the Minister of Finance or the Deputy Minister of Finance put down in this budget a supplementary appropriation that is undertaken due to issues caused by thawing permafrost.
Was it the whole length of the airstrip that was thawing?
How much of it was thawing? Why did it cost almost $4 million to put the gravel back in?
I think we need a better explanation. A substantiation sheet would have been appreciated here if that can be supplied.
Chairman: Thank you, Mr. Arvaluk. (interpretation) Ms. Brown, would you like to answer that?
Originally, when the contract was initiated, CG&S had been managing this airport project since 2006. During August 2007, the contractor reported permafrost difficulties with several sections of the runway.
When the contractor and the engineers noticed, removing the topsoil, the permafrost was deeper and thawing than originally designed, the scope of work was requested to be increased, which included hiring a geotechnical firm to study the ground below, an increase in gravel materials, and inserting more culverts.
This request was received by CG&S project officers, whom reviewed and deemed it necessary to proceed without going through the appropriate approval process.
Based on that decision, client department ED&T and senior staff of the departments had been notified before it was approved.
The contractor proceeded with the additional work based on their terms and conditions, and completed the work in November 2007. The contract was requested and notified not to invoice the work until the new fiscal year.
This was an inappropriate request by CG&S and the project officer should have immediately requested a contract change order.
During this time, monthly meetings between regions and headquarters were taken place on all the projects’ updates and this project was not raised at any point.
Mr. Chairman, could I ask that my officials come and join me so they could give more information as to this topic?
Chairman: Thank you, Minister Brown. (interpretation) Mr. Arvaluk, do you have anything to add?
What is the wish of the committee? The minister wishes to invite her staff to respond.
It is our wish to invite her staff because we need clarification concerning this issue. I would appreciate it if her staff were at the witness table and they can leave immediately after we’re finished dealing with the Arctic Bay Airport.
We need to be well-informed about this issue, so it would be appreciated if we could get an explanation.
I believe Minister Picco wishes to add something to that.
I appreciate the question that the member, Mr. Arvaluk, is raising on the technical aspects of the permafrost and the underlying current within the airstrip in Arctic Bay, I think is the major issue and Mr. Arvaluk made a good request.
He asked for a technical briefing document on the stratosphere of the ice and the permafrost in Arctic Bay which caused the overrun on the cost and expense.
So I would say, again to be expeditious, we can provide that technical briefing information for the member because that’s what you want and we don’t have that level of detail in the Committee of the Whole, but as a government, we can provide that to him and that would allow the other questioning on the other issues to move forward.
I appreciate Mr. Curley’s support there.
Again, I don’t like you waving at me, Mr. Curley.
There is accountability.
The question by Mr. Arvaluk, and I believe the Hansard will correct me if I’m wrong, was that a technical briefing and the background documentation be provided. I’m suggesting to you, as the government, that that’s what we can and will do.
Chairman: Thank you, Mr. Picco. For further comments, Mr. Arvaluk.
I understand that it’s an objection to having the witnesses of CGS here.
Mr. Arvaluk: If I were to do that for every department, we would be here forever.
All I want is for the Department of CGS, with their staff, to be here to do this one item quickly so that they could explain, with my own language, as to why there’s a cost overrun.
That’s all we need to do, we don’t need to do the whole plan from the beginning to the end of that airstrip.
Does the committee agree to bring in Minister Brown and her officials to the witness table?
Chairman: We will see you later, Minister Tapardjuk.
We will have Minister Brown at the witness table. (interpretation) Sergeant-at-Arms, please escort the witnesses and bring in Minister Brown and her officials to the witness table.
(interpretation ends) Minister Brown, for the record, please introduce your staff.
On my right is my Assistant Deputy Minister, Shawn Maley, and on my left is my Deputy Minister, David Akeeagok.
You had technical questions, Mr. Arvaluk. Go ahead.
Welcome, Minister, Mr. Maley, and Mr. Akeeagok.
I thank you for coming here to the committee because we need clarification on some of the funds included in the supplementary appropriations that are in front of us for review.
We were told earlier that the contractor was at fault for the cost overrun of $3.8 million for the Arctic Bay Airport Project and that it wasn’t due to the government’s engineering plans.
We were informed of this fact and that’s why I asked whether or not the government had approved this overrun.
Is it because the engineers or the government didn’t do a good job at planning the project, or is it because the contractor didn’t follow the engineering plans? Why does the government have to pay for this additional cost?
I thank the members for agreeing to have my officials at the witness table.
I’m going to ask Mr. Akeeagok to explain this.
Our staff, our contractors, and the inspectors of these projects have all the information before the project goes ahead, including the assessment, the budget, and the technical aspects of the project. All contractors have a copy of the engineering plans and they proceed with the construction the way it has been planned.
The engineering plans were completed and this is what the contractor was undertaking: they removed the top layer of the airstrip and they had to dig down to the permafrost.
Due to the additional layers, they had to dig deeper to reach the permafrost and that’s when they found the problem.
They notified our department and asked for clarification with respect to the engineering plans. They stated that once they had undertaken the work, they had found that they would have to dig deeper to reach the permafrost and that they would want further inspections of the land. They requested assistance to make the final determination.
Our technical engineers stated, after their assessment, that it would be best to dig further into the permafrost in order to improve the airstrip and properly place the culverts. After that was explained by our technical staff, we had enough evidence to proceed with the changes to the plan and include those changes in the engineering plans.
Due to the changes of both the project and the engineering plans, we had to include these activities as additional work. This is the reason why the project ended up being more costly than we had budgeted.
The process of working with the contractor on the engineering plans requires that any changes or recommendations for changes have to be approved by the department prior to any changes being made and this procedure was followed.
With respect to the issue, this was due to the additional work required to complete the project.
Yes, now I understand.
Is Mr. Akeeagok saying that the government engineers or geotechnical assessors that did the planning were just guessing?
Perhaps they used 1970s geotechnical data when the permafrost was that much closer.
Did they use outdated information when they were conducting an inspection of the lands without doing any drilling or digging as to the extent of the permafrost?
Wasn’t there an inspection done or was the problem found when the contractor commenced the digging and therefore, the scope of the work would be more expensive than originally estimated? Is this what he is stating?
I believe the question is directed to Mr. Akeeagok.
I cannot recall when the actual date of the geotechnical assessment was.
I know that it was done, but at this time, I don’t have the information on the subsurface data used for the plans.
However, even with all of our engineering plans, we can never know exactly what the contractor will find until that land has been dug up and the permafrost reached, and that’s when we find out if there were any problems.
We didn’t anticipate any problems, but we had to make changes to the budget upon revelation of the permafrost and its depth.
It seems that we have two diverging points since this was only discovered when the technical assessment was made at the site.
Mr. Arvaluk (interpretation): One last question, Mr. Chairman.
With respect to the $3,837,000 figure, was this amount conjured up by the contractor or was it due to the additional work identified by the government’s assessment?
Did the government make the estimation based on the permafrost depth discovered at the project site and the additional work required to complete the project?
Is the government saying that this is how much the extra work will cost or was it the contractor that stated that this is how much more it would cost to complete the work?
I will have Mr. Akeeagok respond to that question.
For the airport project, our contract stipulates that they have to follow certain airstrip guidelines.
The cubic footage of material required to overlay this area was a lot more due to the extra depth and $3,837,000 was required to pay for additional material. Extra work was required to deal with the issues of permafrost and culvert placements at the airport.
There was also another inspection that needed to be done by a geotechnical assessor.
So this amount includes all of these additional expenses required to finish the project.
I would like to welcome your officials.
First of all, I want to state that this is just a cost overrun. Secondly, I would like to state that the project is a good and essential one that we have to complete.
Its construction is not the cause of concern in this circumstance, but the problem that we have is that there was almost $4 million in cost overruns.
As the Government House Leader alluded to, if we don’t inform our people in Nunavut about the reasons for these additional costs, such as this project overrun of almost $4 million, and it’s just passed, then I would be apprehensive to deal with this matter without fully explaining how this was arrived at.
So therefore, we invited the minister’s officials so that they could clarify the situation and explain how the project resulted in that overrun. We thank you for allowing the minister to invite her officials, Mr. Chairman.
I’m going to ask you this: what is the status of this project? Is it completed or does it require more work next year?
The airport project in question was completed.
I’m sure that the project manager did a good job planning the project, but the cost overrun occurred over this summer.
Can the project manager or your officials answer the question on whether there were any recommendations on the requirements to dig all the way to the permafrost?
Did the completion of the project make it imperative to expend almost $4 million?
Were there absolutely no options or alternative construction methods available to finish the project?
Further, was the contractor’s method the only one available?
What I would like to understand is if this additional cost had not been funded, would it have delayed the project?
I will have my ADM, Mr. Maley, respond to that question.
Mr. Maley: Thank you, Minister.
Thank you, Mr. Chairman and I thank the member for that question.
I’m just thinking of a couple of points to hopefully clarify this for you.
These big civil work projects are normally tendered on a unit price basis in order to protect the contractor and the client, which is the government in this case, and that’s in recognition that, for a $20 million project like this, the actual quantities of gravel and work required around that are sometimes not exact and you do the best you can in terms of estimating it. If we hadn’t gone to a unit price contract, the contractor would have padded his bid anyway to protect himself because there’s quite a bit of unknown there in terms of exact quantities that you’re going to require.
Runways, different from roads, typically require the organics to be removed and with that comes some melting of the permafrost. There was a geotechnical assessment done which, with our experience, showed us that we did our best to account for that in our estimate.
The permafrost, however, melted more than you would normally find and that was what caused the extra amount of work and therefore, the price went up.
To answer the member’s question, it would have delayed the project if we had to stop there and sought further funding.
Although we don’t agree with the process that occurred, certainly, the work was done, it was done adequately and inspected, and the final result is a project that meets all certification and we’re happy with it.
The fact of the matter though is that it did experience a cost overrun of about 20 percent, which is higher than you would hope but not beyond other projects that have occurred in terms of a percentage.
Mr. Chairman, I appreciate the information and clarification on the number.
It also appears to be that CGS had underestimated the price of the project.
Am I correct in saying that, that you did not have enough contingencies and that the project funding was really inadequately under budget?
Was that part of the information that you just gave me?
I will ask Mr. Maley to also respond to that question. (interpretation ends) Thank you.
Thank you, Mr. Chairman, and I thank the member for the question.
With a contract like this, a unit price contract, there is a risk that if you’re not exact on your numbers, you tend to, in some instances, pay more.
However, the alternative was if we had put it forward without a unit price, you would have paid for that anyway. A contractor would have billed that in as his own contingency in his price to protect himself, so it’s a normal approach to this kind of work.
For a large civil work project like this, normally, you would do unit pricing and you would try to be as accurate as you can with quantities. Sometimes you’re not on it.
This is an airport project, it’s a big one. It’s the first airport built in Nunavut in many years and it’s a substantial project.
And to answer his question, yes, we did underestimate our quantities. It was a 20 percent cost overrun, which is not unheard of in a project of this size, and we would have hoped that it would have been less, but the end result was that it was 20 percent.
Yes, I understand that, I think that helps us quite a bit. I also want to try to get some understanding from the department. It appears that, with the nature of a project like this, the department went under budget with the final estimates, but it also appears that you did not adequately have a contingency funding towards that.
Would I be correct in saying that, that you solely relied on the bids that were coming in instead of having an adequate contingency funding for the project?
Hon. Levinia Brown (interpretation): Thank you, Mr. Chairman. A note was being written but it’s not legible to me.
It looks like a doctor’s note for a prescription and I can’t read the message.
I’m going to ask Mr. Maley to respond.
CGS is managing this project on behalf of ED&T, and we work with our clients to try and make sure the numbers are where they should be.
To answer his question, in retrospect, yes, I mean obviously, our contingency should have been higher. Again, not as a justification but as a point of information, this was a large project, it was the first airport that we have been involved in with the Nunavut government, and in hindsight and certainly in the future, our levels of contingency will be more adequate to compensate that so that we don’t have to come forward with the members to try and achieve a supplementary.
I thank the minister and her officials, particularly Mr. Maley.
Given the fact that nothing is cheap up here in Nunavut when we’re building whether it is airports or major infrastructure, everything usually has pretty huge costs that we normally incur.
I think Nunavummiut expect that, by now, we should become pretty well experts in cost estimating in building projects as closely as possible to original budget estimates.
So hopefully we have learned from that, that we can build upon the cost estimating to try and adequately reflect the cost that we’re asking our taxpayers to pay because to try and get extra funding for that amount is really very complicated and Nunavummiut couldn’t even build a smaller project, but when it comes to cost overruns, boy, there appears to be no problem in finding funding for such projects whether or not you have a contingency allocation.
So what I’m urging the government to do is that we need to adequately try and reflect not only single cost estimates but a number of cost estimates so that we come closely as possible and be fair to Nunavummiut when we say exactly how much it’s going to cost. Do you think, minister, that we can begin to come close to original cost estimates in completing projects given the fact that we have built a whole lot of infrastructure projects and so on to this date?
Yes, that’s a very good comment. I appreciate that.
Yes, my answer is yes.
Mr. Arvaluk: One last quick question, Mr. Chairman.
I think we already know that there is damage to the land already from global warming and I think this is one of the trends that your estimates were probably correct from 20 or 30 years ago when permafrost was closer to the surface. We appreciate that.
In this case, you are probably learning that road construction and steel pilings for housing are going to be looked at differently than what it has been.
Are you reviewing different methods now to keep your costs down, other than the traditional method of construction when it comes to involving the soil or digging up the soil to the permafrost?
Yes, we are discovering new challenges and our elders inform us that the land is indeed changing, that our climate is changing.
For example, in Pangnirtung, there was a bridge that collapsed, perhaps both of the bridges, due to the changing landscape and conditions.
We are aware that most capital projects are more expensive to construct, as per the member’s statement about changes affecting the government.
Indeed, these factors will have to be included in the inspections performed for road construction and pilings for housing. The permafrost and the subsurface situation will also have to be included.
I agree with the member’s recommendation and we will commit to doing more inspections.
Chairman (interpretation): Thank you, Minister Brown. (interpretation ends) Questions?
There are no more questions. Does the committee agree that Minister Tapardjuk and his staff return to the witness table?
Chairman: Thank you, Minister Brown and your staff. (interpretation) Sergeant-at-Arms, please escort the minister and her officials out. Minister Tapardjuk, you can go back to the witness table.
(interpretation ends) Thank you, Minister Tapardjuk.
Total Transportation. $3,837,000.
Chairman: Total Department. $3,837,000.
Schedule 1. Capital.
Capital Appropriation. $3,837,000.
Chairman: Go back to Bill 36 in your legislation binders.
If you can’t find your binder, I’ll give you one chance.
Bill 36, Supplementary Appropriation (Capital) Act, No. 4, 2007-2008.
Chairman: Page 2, clause 2. Agreed?
Chairman: Go to Schedule on page 2 of Bill 36. Schedule.
Vote 2: Capital. Total Capital. $3,837,000.
Chairman: Total Supplementary Appropriation. $3,837,000.
Chairman: Go back to page one, clause 4.