O-Train extension: nearly $100 million in legal claims against SNC-Lavalin

The City of Ottawa’s private partner in building the north-south commuter rail line is facing more than $100 million in lawsuits, arguing its failure to properly manage the project led to costly delays.

AtkinsRéalis, the engineering giant formerly known as SNC-Lavalin, won the $1.6 billion contract to extend and maintain Lines 2 and 4 through a newly formed subsidiary. created called TransitNexteven if the company failed at the technical stage of the tender procedure.

OC Transpo began the gradual opening of lines 2 and 4 earlier this month, more than two years later than planned.

Documents filed in several civil cases provide insight into the construction process, which took place alongside the opening of the Confederacy’s East-West Line and the resulting public inquiry.

From the start, SNC-Lavalin was disorganizedsays Pomerleau, who managed the construction of transit stations and maintenance buildings, in a 2024 statement. SNC-Lavalin’s design management, poor change management and poor contract administration crippled the project.

The company and other contractors suggest AtkinsRéalis’ mistakes undermined the project from start to finish, including handing it over to managers who didn’t have the necessary skills or experience.

None of these allegations have been proven in court. AtkinsRéalis did not want to grant an interview to CBCbut let it be known by email that he was normal for there to be disagreements in a project of this scale.

Technical problems prior to the project

The City of Ottawa chose SNC-Lavalin over three bidders in 2019. Although it was later revealed that the evaluation team had rated the company’s proposal well below its competitors in terms of technical requirements, the Montreal company offered the best price.

The expert assessors warned that the plans lacked detail and that to resolve this would require a long and tedious process. They also expressed reservations about the level of experience of the main players in the call for tenders.

After signing an agreement, SNC-Lavalin hired Pomerleau to manage the construction of most of the new or renovated buildings. Years after the project began, she added the remaining stations.

In an $88 million lawsuit, Pomerleau claims the company’s work failed to meet industry standards, causing it to fail to fulfill its obligations.

Pomerleau claims to have worked for years from incomplete plans. According to his statement, the finalized plans were presented in November 2021, approximately a year before the line was originally planned to open.

Every time the lack of details became an issue, the company asked for clarification. These requests for information ultimately amounted to more than 4,700. Each request took an average of 17.5 days to be resolved, according to Pomerleau.

SNC was simply unable to finalize its design, causing significant delays and significantly changing the scope of the projectthe company argued in its statement.

Rising costs at the heart of the dispute

As the project grew, Pomerleau says construction costs rose from about $100 million to more than $400 million.

Rising costs have had a cascading effect on the small businesses involved in the process. Some of them have issued construction liens on the properties while waiting to be paid by AtkinsRéalis or Pomerleau, a common practice in this type of dispute.

As with other major projects, the effect of the COVID-19 pandemic cannot be overlooked. It slowed construction and triggered inflationary pressures, leading to higher material and labor costs.

This is a thorny issue for AtkinsRéalis given the nature of the contract, which is designed to remove the City from any financial risk.

AtkinsRéalis had so many problems with these projects turnkey at a fixed pricein which a contractor agrees to be paid a fixed price, regardless of costly delays. The company has vowed to make this contract the last it will sign.

This does not mean recouping the high costs has been ruled out, however, with the City having said it is negotiating a deal with contractors tasked with building the next stage of its rail system.

The lawyer for the City of Ottawa refused to specify whether these negotiations concerned AtkinsRéalis, and in particular whether an agreement could help resolve the series of lawsuits.

On Friday, the city reiterated that it does not comment on civil cases before the courts.

Contracts carried out during the project

The lawsuits cite two other problems that affected construction deadlines: bad weather and six strikes, including a dispute at Hydro Ottawa that delayed work on those stations.

An entrepreneur, OWS Railroad Construction and Maintenanceclaims in its $6.6 million lawsuit against AtkinsRéalis that it is owed, among other things, hourly wages for employees who were unable to work when the necessary lanes were not delivered.

The suit also argues that trains were allowed to run on tracks that were not ready, causing the tracks to become misaligned.

Lawsuits by other contractors have also cited mismanagement issues that led to work being done out of order.

AtkinsRéalis terminated the $18.9 million contract without cause, even though OWS ensured that 99% of the work was completed.

At least two other companies claim their contracts were improperly terminated by AtkinsRéalis or one of its subcontractors late in the project.

Waiting for the defense of AtkinsRéalis

CBC could not find any statement or defense from AtkinsRéalis in the cases involving Pomerleau or OWS.

Other lawsuits concern Bradley-Kelly Construction and GIP, formerly known as Aecon, which received the mandate for the construction of certain roads and lighting.

AtkinsRéalis’s defense briefs in these cases asserted that the contract prices were not prone to escalation.

The dispute concerns alleged unpaid invoices, which led GIP to interrupt the work and AtkinsRéalis to terminate its contract.

As in other disputes, Bradley-Kelly Construction is demanding money from GIP that the company says it cannot provide because it has not been fully paid by AtkinsRéalis.

AtkinsRéalis did not want to comment on the cases to which it is the subject. A spokesperson told CBC that one of the cases had already been resolved, but would not confirm which one.

With information from Elyse Skura, CBC News