An ambitious new breed of logistics company is in hot-water with the Alberta Food Inspection Agency over a $1 million grant that the company says was awarded in part because of a previous contract with the province.
The company, New Breed, was awarded a $9.5-million contract in 2016 to manage and store grain products at the Grain Corporation of Alberta.
It had previously worked with the grain corporation to run grain storage warehouses.
But in March 2017, the company went bankrupt and its assets were sold to another company.
The Alberta Food Directorate said the company is not responsible for the cost of the grain shipments to be held at the grain storage facility.
“The company was previously contracted with the provincial grain corporation under a contract that was awarded to it pursuant to the Grain Act,” said the director general, Catherine McCurdy.
“In the case of New Breed’s latest application, the department considers that this contract was entered into prior to the company’s collapse, and therefore the department is not entitled to the award.”
In response, the grain company wrote to the director of the Alberta Agriculture and Forestry department that the contract should not be treated as a contract and said it would not appeal the decision.
“We have been unable to find any record of the company ever entering into a contract with a government department or agency,” the letter said.
“Additionally, the contract itself does not contain any requirement that the government or the agency would be responsible for any costs associated with the delivery of grain products.”
New Breed has not responded to requests for comment.
“It is our understanding that this is not the case and that this matter has been referred to the Department of Agriculture and Agriculture Services (DAS) for a final determination,” the company said in a statement.
New Breed said in the statement it was unable to provide any more information because it has “been closed for a significant period of time.”
McCurdy said in her letter that the department has not received any correspondence from the company.
“Given that this was a contract award and not a formal contract, the DAS would not be able to make a determination,” she wrote.
The grain company’s woes stem from a contract it signed with the government for processing grain shipments. “
DAS has received a number of requests for information from New Breed about the circumstances surrounding the company.”
The grain company’s woes stem from a contract it signed with the government for processing grain shipments.
New breed was initially awarded the contract to process grain and other products at a grain storage site in Lacolle, Alta.
But the contract was cancelled in June of last year and the company closed the facility in August.
The grain corporation then awarded New Breed a contract to manage grain storage at its grain storage and distribution facilities in Calgary and Edmonton.
But that contract expired in June and the grain companies had no new contract.
In an interview with CBC News in May, McCurdy described the company as a “very ambitious company” that had struggled financially.
“There were some serious problems,” McCurdy told the broadcaster.
“They didn’t really have a lot of employees or capital to operate in Alberta.”
McCunky said the grain corporations decision to award New Breed the contract led to “significant and unexpected” financial difficulties.
“This company was a very ambitious company,” she said.