Contractor loses overpass lawsuit

LOCAL contractor Spancast Caribbean Ltd, formerly Spancrete Caribbean Limited, has lost its 18-year-old lawsuit against the Urban Development Corporation of TT (Udecott) over the interchange project at the Churchill Roosevelt/Uriah Butler intersection.

On Tuesday, Justice Jacqueline Wilson dismissed Spancast’s $9 million claim for payment for loss of profit and loss of opportunity as well as an additional $75,840 it claimed for costs incurred in preparing its tender.

Udecott was represented by Senior Counsel John Jeremie, Timothy Affonso and Raisa Caesar, while Spancast was represented by Stanley Marcus,SC, John Lee and Stephanie Moe.

As a potential bidder, Spancast took Udecott to court, in 2001, over the award of a contract for the construction of concrete structures for a number of elevated carriageways for the interchange.

The company had objected to the tendering procedures for the package initiated by Udecott, alleging that, as the project’s manager, it compared its tender application with a quotation from a competitor Pres-T-Con which it (Spancast) said was higher and submitted about 13 months earlier. Spancast is in the business of concrete pre-casting.

Spancast claimed that even though its tender ranged between $39-$47 million and was lower than Pres-T-Con, they were not awarded the contract.

The company alleged in its claim that on February 13, 2001, then Infrastructure Minister John Humphrey wrote to the then Udecott chairman, instructing that the contract be awarded to Pres-T-Con “without delay” on the condition that certain terms of the project be negotiated. Spancast said it complained to the minister regarding the “bona fides” of the tender process and sought a meeting with him, and was advised that the award to Pres-T-Con was a “done deal.”

The interchange project was transferred from Humphrey’s portfolio to then Minister Carlos John, and Spancast met with him and was advised that the contract would be re-submitted for tender. Its tender security was returned to it and the contractor was told the project was being reviewed and a decision would be made on the way forward.

Spancast said it was then told by Udecott of the decision to annul the tender process and restructure the project.

The contractor accused Udecott of creating a “sham” of a tendering process, contending that it was procedurally flawed and the decision to abort it was unfair and irrational.

It alleged that in annulling the tender process and failing to award a contract, Udecott acted in breach of its contractual obligations and was done to “remedy its wrongdoings.” It also alleged that Udecott’s conduct was so “egregious” that the provisions under which the tender process was annulled were unenforceable on the ground of public policy.

Udecott maintained that the need to redesign the interchange and significant cost overruns justified the annulment of the tender process and when it returned the tender deposit, it had discharged all legal obligations owed to Spancast. It also submitted that there was no preferential treatment leading to the award of a contract to any tenderer and all were treated fairly and equally. Udecott also argued that despite efforts being made to influence the procurement process, those efforts did not affect the outcome since no contract was ultimately awarded.

In her decision, Wilson found that no contract had been awarded to Spancast or any other tenderer since Udecott annulled the tender process without any award being made.

She also held that Udecott’s annulment of the tender process was not in breach, nor was its failure to enter into a construction contract with Spancast so it was not liable for any loss the contractor sustained as a result of the submission of its tender.

In dismissing the claim, Wilson ordered Spancast to pay Udecott’s legal costs.

In 2006, Spancast’s judicial review claim was dismissed by Justice Mark Mohammed, who held that hat Udecott, while a private company performing public functions which made it susceptible to judicial review, there was not sufficient public flavour in Udecott’s action as it related to the interchange tendering process to render to open for review. “There was no statutory underpinning for Udecott’s activities... when Udecott engaged in the tendering process, it was engaged in an activity which was intrinsically commercial and contractual in nature,” Mohammed held.

He added that even the quantum of money involved and the broad national significance of the project made no effective difference.

The judge invited both sides to submit arguments on the issue of converting the matter to a private law action, and this was done in 2011, and it was eventually transferred to Justice Ronnie Boodoosingh who allowed the claim to continue under the Civil Proceedings Rule (CPR), despite the passage of some 15 years by that time.

It was eventually transferred to Wilson.

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