The Yukon government tried to stab Norcope Enterprises in the back, says a revived lawsuit by Norcope that's been on ice for more than a year.

Norcope is claiming the government intentionally contacted the company's bonding agent with an aim of discrediting Norcope's work and reputation, so that Norcope could no longer secure the bonding required to bid on big jobs.

The government, says Norcope, made several negative comments to the bonding agent. Those included a statement that the Whitehorse heavy equipment contractor was unable to complete work on the new Whistle Bend subdivision as described in the contract.

"The foregoing statements (six altogether) were, to the knowledge of YTG, false and were made to Norcope's bonding company maliciously in order to prevent Norcope from pursuing other construction projects for which bonding was required,” reads the revived and revised lawsuit filed last Friday.

Norcope is also claiming compensation for extra work that was not originally included in the $15.9-million Whistle Bend contract it was awarded, and for work that was removed from the contract that Norcope feels should have been included.

Norcope and the Yukon government began butting heads over the Whistle Bend project in the spring of 2011, after the government sole-sourced a $2-million contract to Sidhu Trucking for additional work in Whistle Bend.

Norcope claims the work should have been added onto Norcope's contract, in keeping with standard contract law regarding change orders and add-ons.

The government claims it tried to negotiate a deal with Norcope to do the work.

Norcope claims there was nothing legitimate about the government offer, and that the government wanted Norcope to do the work for a song.

Norcope filed a lawsuit last June, the government countered and the whole affair disappeared behind closed doors during the summer.

While the parties were still in court, Justice Ron Veale of the Yukon Supreme Court cautioned them, suggesting time and money would best be served by trying to negotiate an agreement outside the court.

Such a complicated case would require a lengthy and complex trial, and at the end of the day, the legal costs could outweigh the value of the work in dispute, Veale suggested back then,.

Tom Ullyett, the territory's assistant deputy minister of Justice, explained this morning Norcope and the government agreed in the summer of 2011 to try to negotiate a settlement out of court. One issue was settled last January, though several more were left outstanding, he said.

Ullyett said those issues ended up in an unsuccessful mediation process last month.

For reasons of confidentiality, he said, the government cannot discuss the issue settled last January, nor can it speak to the specific issues outstanding.

Similarly, said Ullyett, he cannot address Norcope's claim the government tried to sabotage its business with the bonding company.

The government is preparing its response to Norcope's statement of claim and its counter claim, both of which have to be filed in December, he pointed out.

Ullyett said a statement of claims presents just one view of the facts, and that applies to both parties.

Accusing the government of ill-character is certainly a matter that will be squarely before the judge to decide once he has both sides of the story, Ullyett said.

He said the government ultimately wants a fair settlement for Norcope, while ensuring Yukoners are getting the best value for their dollar.

In the spring of 2011, shortly after Sidhu Trucking was handed the $2-million contract, Norcope staged a protest. It parked several pieces of heavy equipment in front of the premier's office window and around the main administrative building.

The $2-million contract to move an additional 276,000 cubic metres of Whistle Bend dirt – some 25,000 truck loads – should have gone to Norcope, company president Doug Gonder insisted back then during a press conference outside the administrative building.

At the very least, argued another local contractor, the additional work with such a high price should have been put out to public tender, and not sole-sourced.

The government maintained giving the contract directly to Sidhu was made in light of timing, and in accordance with contract procedures, as Sidhu was already on site completing the new access highway to Whistle Bend from Mountainview Drive.

The dispute over the 267,000 cubic metres of dirt is among the issues raised in Norcope's revised lawsuit.

The first phase of residential lots was made available in late September, though most were not spoken for.

Phase two is scheduled to next year. Originally designed in five phases, the Whistle Bend subdivision is now scheduled to come out in eight phases.