CEPEP agrees to pay contractor despite concerns over contract

THE CEPEP Company has agreed to settle a lawsuit brought against it by a San Juan contractor for a fraction of what was being demanded for work done on the Success Laventille Health Centre in 2015.

Naclud General Contracting Company Ltd, of Chanka Trace, filed a claim for payment of $1,856,560 for refurbishment work at the health centre in 2015.

The contractor claimed it provided construction work and services to CEPEP which refused to pay. The work was done in April-May 2015 and approved by the company, the lawsuit contended. It said after submitting an invoice for payment, CEPEP failed to honour its obligation to pay.

In its defence filed in opposition, CEPEP gave a history of the company and how it came about providing project management services, claiming in 2014, the then corporate secretary of the limited liability company, which operated on monetary subventions from the Government, drafted a note to Cabinet misrepresenting the CEPEP Company’s capabilities.

The note, the defence said, claimed the company had expertise in project management which it did not and took on multi-million dollar property and hospital renovation contracts.

This Cabinet note mandated a contractual agreement with the Health Ministry to refurbish and maintain district health facilities, health centres and hospitals in the North Central and North West regional health authorities with the ministry financing the project as part of the health sector initiative programme.

The defence also maintained there were no board minutes changing the mandate of the CEPEP Company from environmental enhancement and maintenance to construction or hospital renovation.

Although it agreed to a settlement figure of $599,427.35 based on the quantum meruit basis of what the contractor had earned for work done, which was quantified by an independent quantity surveyor in January 2019, CEPEP said the contract was not enforceable. It said the then general manager was not authorised to enter into such an arrangement since there was no prequalification process or public invitation to tender, making the alleged contract unlawful.

It also maintained for sums exceeding $100,000, a contract of this size had to go to public tender in keeping with the company’s regulations and policies.

In a counter-claim, CEPEP said although completion certificates were sent, work remained unfinished at the health centre.

The matter was expected to go to trial on Wednesday, before Justice Frank Seepersad. However, attorneys for both sides told the judge, that the parties had arrived at a consensus on payment on quantum meruit.

Seepersad congratulated the parties for the position taken, but said having read the pleadings, he had significant concern as it related to the authority to enter into the type of contractual arrangements outlined, noting also there appeared to be merit in the defence filed as it related to CEPEP’s concerns on the lack of authority.

The CEPEP Company was represented by attorneys Philip Lamont, Farai Hove Masaisai, Issa Jones and Jennifer Farah-Tull while Navindra Ramnanan represented Naclud.