A contract for highway maintenance in Fort Liard was put out to tender for policy reasons, the Government of the Northwest Territories told Acho Dene Koe First Nation after it filed a lawsuit against former chief Harry Deneron.
That government contract is at the centre of a March 2 civil lawsuit between ADK Holdings — the business arm of the Acho Dene Koe First Nation in Fort Liard — and recently-suspended chief Harry Deneron.
In court documents, ADK alleges Deneron approached the Government of the Northwest Territories about a contract it had for airport and highway maintenance with the band's construction firm, Beaver Enterprises.
The contract was set to be extended but ADK alleges Deneron asked the territorial government to put that contract out to tender instead. It says Deneron told the government that there were other companies in town who could do the work, companies in which ADK claims Deneron has a financial stake.
None of the allegations has been proven in court.
In a letter dated March 10 obtained by CBC News, N.W.T. Transportation Minister Wally Schumann tells the president and CEO of ADK Holdings, Barney Dohm, that the government is tendering the contract for policy reasons.
"I want to assure you and the ADK Band Council members that the decision to tender the Highway 7 and Fort Liard Airport operation and maintenance work was based on the need to separate the two contracts and a negotiated contract for highway maintenance or airport maintenance with Beaver Enterprises no longer meets the criteria for consideration under the [non-competitive] Negotiated Contracts Policy," Schumann writes.
Beaver Enterprises has held that maintenance contract for 16 years.
But in the letter, Schumann says the government is putting it out to tender to encourage other local businesses to bid.
"Separating the work into two contracts will also increase local business opportunities," he writes.
"With regard to local business, we understand that more than one local contractor is now available and interested in delivering the work....
"The Policy notes that any contractor who has been awarded five or more negotiated contracts for substantively the same type of services for five years or more should reasonably be expected to be in a position to compete in a public tender process."
CBC News contacted ADK Holdings but no one was immediately available for comment.
Meanwhile, in court documents, Deneron says the civil suit is a ploy by ADK Holdings to eliminate business competition. He also says members of the ADKFN are using the lawsuit to tarnish his reputation in hopes of manipulating the upcoming chief and council election. Deneron says he plans to run for council in that election.
A date for the election has yet to be set.