SNC-Lavalin, now AtkinsRéalis, facing $100M in legal claims from Trillium contractors
Claim from construction manager Pomerleau alleges mismanagement caused delays
The City of Ottawa's private partner in building its newly re-opened north-south commuter rail line is facing more than $100 million in legal claims alleging its inability to properly manage the project led to costly delays.
AtkinsRéalis, the rebranded engineering giant formerly known as SNC-Lavalin, won the $1.6-billion contract to expand and maintain the diesel Trillium Line through a newly created subsidiary called TransitNext — despite failing the technical round during the bidding process.
OC Transpo began a phased opening of the line this month, more than two years later than expected.
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Documents filed in a handful of civil cases provide a window into the pandemic-challenged building process, which continued alongside the troubled opening of the east-west Confederation Line and the resulting public inquiry.
"From the beginning, SNC[-Lavalin] was disorganized," alleged Pomerleau, which managed the construction of transit stations and maintenance buildings, in a 2024 statement of claim. "SNC[-Lavalin]'s design management, poor change management and poor contract administration stymied the project."
The company and other contractors suggest AtkinsRéalis' missteps followed the project from beginning to end, from long-delayed and vague design documents to assigning managers who lacked the proper skills or experience.
None of the allegations has been proven in court. AtkinsRéalis would not provide an interview, but said in an emailed statement to CBC "it is normal for there to be disagreements" in a project of this size.
Technical problems predated project
Ottawa chose SNC-Lavalin from among three bidders in 2019. While it was later revealed that the evaluation team rated the company's proposal far below its competitors in terms of technical requirements, the Montreal-based company offered the best price.
Expert evaluators warned the plans lacked detail and said resolving them would be a "long and lengthy process." They also noted concerns about the level of relevant experience among the bid's key players.
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After SNC-Lavalin signed an agreement, it engaged Pomerleau to manage construction for most of the new or renovated buildings. Years into the project, it would add the remaining stations.
In an $88-million lawsuit, Pomerleau alleges the company's work fell below industry standards, undermining its ability to fulfil its obligations.
Pomerleau claims it worked from incomplete designs for years. According to its statement of claim, the finalized plans ultimately came through in November 2021, about a year before the line was originally slated to open.
Every time the lack of detail became a problem, the company would ask for clarity. These "requests for information" eventually totalled over 4,700, it alleges, with each taking an average of 17.5 days to resolve.
"SNC simply could not finalize its design, which created massive delay and materially changed the procured scope of the project," Pomerleau said in its statement of claim.
Escalation costs in dispute
As the project morphed in scope, Pomerleau alleges construction costs ballooned from about $100-million to more than $400 million.
The effects of escalating costs had a cascading effect on smaller companies hired down the chain, several of which issued construction liens against the properties as they await payment from AtkinsRéalis or Pomerleau — a practice common in these sorts of disputes.
As with other major projects, the effect of the pandemic cannot be discounted. It slowed construction and kicked off inflationary pressures, causing the costs of materials and labour to rise.
It's a vexing issue for AtkinsRéalis given the nature of the contract, which is designed to insulate the city from financial risk.
AtkinsRéalis has had so much trouble with these "lump sum turnkey" projects, where a contractor agrees to be paid a fixed price regardless of costly delays, that it vowed to make the Trillium Line contract the last one it signs.
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But that doesn't mean recouping escalated costs is out of the question, with the city stating it's negotiating a settlement with contractors building the next stage of its beleaguered train system.
The city solicitor has declined to comment on whether those talks relate to AtkinsRéalis, including whether an agreement could help resolve the chain of suits.
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On Friday, the city reiterated that it does not comment on civil cases before the court.
Contracts terminated mid-project
Lawsuits mention two other issues that affected construction timelines: poor weather and six strikes, including a dispute at Hydro Ottawa that delayed work on stations.
One contractor, OWS Railroad Construction and Maintenance, argues in its $6.6-million lawsuit against AtkinsRéalis that it's owed — among other things — hourly wages for employees who could not work when the required track wasn't delivered.
The statement of claim also alleges trains were allowed to run on track that wasn't ready, causing the rails to fall out of alignment.
Suits from other contractors similarly expressed concerns about mismanagement leading to work being done out of sequence.
AtkinsRéalis terminated the $18.9-million contract without cause, when OWS alleges 99 per cent of its work was complete.
At least two other companies allege their contracts were inappropriately terminated by AtkinsRéalis or one of its subcontractors well into the project.
AtkinsRéalis yet to file defence
CBC could not find a statement of defence from AtkinsRéalis in the cases involving Pomerleau or OWS.
Other lawsuits involve Bradley-Kelly Construction Ltd. and GIP, formerly known as Aecon, which were contracted to build some roads and lighting.
Statements of defence from AtkinsRéalis in those cases alleged prices in the contracts were not "subject to escalation."
The dispute revolves around alleged unpaid invoices, which lead to GIP stopping work and AtkinsRéalis terminating its contract.
Similar to other disputes, Bradley-Kelly Construction Ltd. is looking for money from GIP that the company says it cannot provide because it hasn't been fully paid by AtkinsRéalis.
AtkinsRéalis would not comment on any of the cases against it. A spokesperson told CBC one of the cases has already been resolved, but would not confirm which one.
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