Showing preferential treatment in what was supposed to be an open-bid process is going to cost the Kluane First Nation.

Yukon Supreme Court Justice says it was unfair of the First Nation to award a road building contract to its own construction company, despite not being the lowest bidder.

Last June the Kluane First Nation invited contractors to bid on some roadwork in the Burwash area. There was some government money behind the project and as a result the Yukon government insisted on an open public bidding process. 

But Yukon Supreme Court Justice Leigh Gower says that didn't happen. He's now ordered the First Nation to pay Whitehorse-based Cobalt Construction $318,000 in damages. 

Cobalt Construction went to court claiming it lost more than $300,000 in expected profits on the deal. The company asked the judge to award that amount in damages.

The Kluane's First Nation construction company says it made just $77,000 in profits doing the work and argued it shouldn't have to pay more.  

However, Cobalt manager Jon Rudolph told the court his company owned all its own equipment while the First Nation's company had to pay more than $400,000 renting machinery to finish the job.