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QC boss quits over Baffin hospital deal

Refuses to give contract to Nunavut Construction Corporation

JIM BELL

Abraham Tagalik, president of the Qikiqtaaluk Corporation, has quit his job after refusing to award a QC contract to the politically favoured Nunavut Construction Corporation.

Tagalik said QC’s board of directors suspended him without pay last month because he and other QC employees recommended NCC not get a contract to manage construction of a replacement hospital in Iqaluit for the Baffin region.

Tagalik said the only other firm to make the short-list — whose name he did not disclose — submitted a cheaper and better proposal than NCC’s.

"It was a better proposal, better bid, better team. They put a lot more work into their proposal," he said.

His suspension, imposed just before Christmas, was to be lifted Jan. 14. But Tagalik decided to pack it in and move back to Arviat, his home community.

"When they suspended me, I said, ‘I’m going to resign, you guys should buy out my contract, I’m not coming back. I don’t want to work for you guys anymore,’" Tagalik told Nunatsiaq News this week.

Two others dumped

Tagalik had been on the job less than three months.

He said QC’s board dumped two other contract employees: Mathew Spence and Victor Tootoo.

Spence, who was the project manager for the Baffin hospital job, confirmed this week that QC terminated his contract. But because he has signed a confidentiality agreement with QC, Spence said he couldn’t reveal why he was taken off the contract.

Tootoo, who Tagalik hired as vice-president, ended up being fired before his first day at work.

"They really shot themselves in the foot there," Tagalik said of the board’s decision to fire Tootoo. "There aren’t many Inuit who are on to getting their CGA, who’s been an ADM, who knows the government."

Johnny Mike, the vice-chair of QC’s board, had little to say about Tagalik’s employment status.

"I cannot say anything about that," Johnny Mike said when Nunatsiaq News asked him this week if Tagalik still works for QC.

Tagalik said Mike, who also sits on the board that oversees the Nunavut Construction Corporation, engineered a move to punish Tagalik for refusing to give the contract to NCC.

"Johnny Mike didn’t like that. He sits on the NCC board, and the NCC wasn’t getting it [the construction management contract]. That’s why it went crazy," Tagalik said.

He said the contract was for architectural, engineering and construction management work, and was advertised in a request for proposals issued last year.

Under an agreement with the government of Nunavut, QC is to build a replacement hospital for the Baffin region, and lease it back to the government of Nunavut.

Tagalik said the government of Nunavut insisted Qikiqtaaluk follow all territorial government procurement rules when issuing subcontracts. That includes the Nunavummi Nangminiqaqtunik Ikajuuti, or "NNI" policy, whose aim is to give a competitive advantage to Inuit-owned firms bidding on government contracts.

"It was all spelled out and that’s what we followed," Tagalik said.

NCC second-best

But he said that even after applying the NNI, Inuit-owned NCC’s proposal still fell short of a proposal submitted by a competing non-Inuit firm.

"They didn’t have a good team," Tagalik said of NCC’s proposal. He said the quality of the management team was a far more important criteria than price in their analysis of the two proposals.

"We even had an independent analysis done and they agreed with us," Tagalik said.

However, Johnny Mike and other board members insisted NCC get the contract, even if its bid was second-best.

"It’s more politics than business, which is the problem," Tagalik said. "You shouldn’t mix politics and business, but that’s what it came down to."

Tagalik said there "probably" was an informal understanding that NCC would get contracts to build Nunavut’s three new hospital projects — regardless of government contracting guidelines or whether NCC is the best firm available.

Born after behind-closed-doors talks between Ottawa and Nunavut Tunngavik Inc. in 1996 and 1997, NCC was first set up to build, own and lease back new offices and staff housing for the Nunavut government, including the legislative assembly building in Iqaluit.

The government of Nunavut is now making annual lease payments to NCC as a result of that Ottawa-NTI deal, even though the GN played no part in negotiating those leases.

Nunavut’s three regional Inuit birthright development corporations, and the Nunavut-wide birthright corporation, Nunasi, are the owners of the NCC, through a holding company called the Nunavut Investment Group, or "NIG."

That means the Qikiqtaaluk Corporation owns 25 per cent of the NCC.

The auditor general of Canada recently criticized the government of Nunavut for spending an excessive amount of money on leases, and said it may be cheaper over the long-term for the GN to put up its own buildings.

NCC "expensive"

Tagalik said NCC has a history of cost over-runs, which it then passes on to clients.

"But our board of directors would never see that. They couldn’t see that NCC is very expensive and not that fast, although they probably do pretty good work."

Tagalik says he now fears last month’s turmoil within Qikiqtaaluk will damage the company in the eyes of creditors, beneficiaries, other businesses and banks.

Last spring, Tagalik’s predecessor, Jerry Ell, was forced out of the president’s job. The board also dumped Qikiqtaaluk’s veteran chief financial officer, Vincent Buron.

For its 2000-1 fiscal year, Qikiqtaaluk posted a $2-million deficit, the first time in many years that the firm had lost money.

"I really thought the corporation was coming back, but this doesn’t really create a very good atmosphere for business," Tagalik said.

He brought in a financial recovery plan to get the company back on a solid financial footing, he said, but said there may not be anyone left at the company able to carry out it out.

"The banks have to be satisfied that there’s stable management there and I think that may be a concern," Tagalik said.

Johnny Mike, a Pangnirtung resident, arrived in Iqaluit Monday for what he says are "business meetings." But he wouldn’t say if QC’s board has met, or will meet, to discuss the president’s position.

"I don’t know. We’re working on it at this moment," Mike said.

Mike, who is now standing in as QC’s president, said he’ll provide more information about the situation "later."

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