The general contractor of the new $70 million secondary school is being sued by an elevator supplier on the grounds that it reneged on a verbal business deal.

Pro-Active Management Systems Ltd was in Magistrates Court yesterday defending why it chose not to use the services of Bermuda Elevator Systems Ltd for the new Berkeley Institute site last year.

Pro-Active has claimed there was no verbal deal.

Vice president of the elevator company Colin Smith previously told the court that he and his father Tony Smith had submitted a bid amounting to $255,540 for the sub-contract at the school in March of last year.

He said after Pro-Active was awarded the general contract, they arranged a meeting in June to discuss a possible deal with Pro-Active president Arthur Ebbin.

Mr. Smith said, as a result, of the discussion, Mr. Ebbin said he intended to award the contract to Bermuda Elevator and promised that a purchase order would be sent the following week.

Mr. Smith claimed Mr. Ebbin had indicated that he had submitted Bermuda Elevator as his choice of sub-contractor on the list of sub-trades to Government, and said he had not even obtained a quote from the only other competitor on the Island, Otis Elevator Company.

Mr. Smith said the purchase order never arrived. He said Mr. Ebbin had told him that he was under pressure not to award the contract to Bermuda Elevator because it was a non-union company. Mr. Smith said he was told the site had been declared a union site and only union members could work on it.

Mr. Smith said he was invited to have meetings with president of Bermuda Industrial Union (BIU) Derrick Burgess to see if they could reach some kind of agreement. After three meetings with the union, Mr. Smith said no purchase order arrived, and on August 8, Pro-Active wrote to Bermuda Elevator stating that “we will not be accepting your bid”.

Bermuda Elevators are claiming $9,150 in damages and costs.

Mr. Smith said he never fully understood why the union had become involved during negotiations. Mr. Ebbin denied making any reference to the union, and denied promising the contract to Bermuda Elevator.

He told the court yesterday that no verbal agreement had been reached, and said there was a second bid for $244,550 from Otis. And Mr. Ebbin said he had received both elevator bids before Pro-Active submitted its bid for the contract in March.

Talking about the meeting on June 20, Mr. Ebbin said it was merely an initial meeting.

He said: “Basically, we discussed the awarding of the contract - that's the general contract. Then we discussed the bid by Bermuda Elevator Systems Ltd. Basically, we were trying to get clarification on some issues that would assist us in making a final decision as to whom we would be awarding the elevator sub-contract to. At that stage, we were really not into reviewing the elevator contracts, but due to Mr. Smith's persistence we agreed to a meeting.”

Last year, The Royal Gazette revealed how a number of sub-contractors had been told by Pro-Active that they would have to join the BIU in order to be considered for work at the Berkeley Site. As a result, a number of managers had met with union president Mr. Burgess.

But the companies complained it was illegal and said some of their workers did not wish to join the union, so they themselves would have to pay union dues for their staff in order to win contracts.

President of the union Mr. Burgess told The Royal Gazette that the site had been declared a union site, which resulted in the Employers' Council publicly announcing that the closed shop agreement was illegal in Bermuda and led to Government releasing a statement to deny that the Berkeley site was for union workers only.

The case was adjourned yesterday for Magistrate Edward King to come back on April 17 with his findings. Lawyer Andrew Martin is acting for Bermuda Elevator and Sean Tucker is acting for Pro-Active.