Clive Thurston: Procurement troubles continue

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By Clive Thurston

The worldwide pandemic that struck economies around the world requiring an energetic and robust recovery. Governments at all levels have recognized that everyone needs to work together to restore our economies in the next few years.

All levels of government have consistently recognized that construction, residential, infrastructure, industrial, commercial, and institutional must lead the way for a sustainable and realistic economic recovery.

The construction industry along with others are finding tremendous challenges in being able to deliver that sustained effort of recovery. Labour and supply problems continue and, while salaries and jobs in the construction industry are abundantly available, they are going unfulfilled. Despite the tremendous efforts by the industry and by the government to recruit people from all walks of life.

Another challenge, there is so much work that needs to be done but only a very few companies are available to do it in part because of the problems identified above.

Now nobody’s complaining that there’s a lot of work. This is a benefit for those of us who perform this work and one would think it would lead to a greater era of co-operation and collaboration between organizations who have the projects and want them built and those of us who design and build them.

We heard from the president of the Ontario General Contractors’ Association (OGCA) in his column recently, that is not proving to be the case.

The cyclic problem that he refers to is the lack of corporate knowledge retained within an organization when people move on. There is no doubt that the stresses of COVID-19, coupled with retirements, has decimated many organizations’ procurement ranks. As a result, in some cases, the new procurement experts appear to be ignoring what was going on before and. rather than adopt what has worked, have set about to put their own mark on their systems.

This lack of experienced and knowledgeable people who understand the rules surrounding the procurement of construction and design services in Canada continues to cause the greatest number of problems that we face particularly when tendering work.

The problems that afflict this industry when it comes to the procurement of design and construction services are not new and everyone in the industry is seeking solutions to these problems. Many new forms of procurement and contracts have been tried. Many of these initiatives have been successful, but unfortunately the main issues that afflict the industry are still there and have not been dealt with.

One of the key elements has always been about that the quality of documents as a major reason why projects go off the rails and yet it is next-to-impossible to get anyone to listen to those issues and address them in a collaborative manner.

One argument against solving the documentation quality problem is that there was no empirical evidence to back up the argument.

That has now been addressed by the Construction and Design Alliance of Ontario (CDAO) with Ryerson University. The two organizations teamed together to publish the Impacts of Pre-Project Investment and Quality of Documents report.

The report is the first time a cross-country survey has been done to gather data supporting the premise that, if you do not invest up front on your project to plan properly, produce good drawings, specifications, and give the consultants the time they need to properly put the project out to tender, you are going to have problems.

Overwhelmingly the results showed that large majority of projects documents being tendered today are only 60 to 70 per cent complete. That is not going to lead to success.

The study further draws the conclusion that only through true communication, coordination, and collaboration can we overcome these problems to ensure the project success.

ACEC Research Initiatives Division recently released a research document entitled “Savings, Innovation, and Efficiency, Analysis of QBS (Qualifications-Based Selection) in the Procurement of Engineering Services.” QBS is a proven effective and efficient procurement model that owners should be using when preparing to put projects out for design the hiring of consultants should not be based on low bid.

General contractors have always supported the proposition that QBS is a valuable tool that owners should be using to ensure that the quality of their documents is of the highest standard.

When we should all be putting aside our differences and working in a collaborative, professional, and unified manner to get work going to ensure that the economy recovers, we are still challenged by those who seem to be stuck with the idea that the other party is trying to somehow pull a fast one. Contracts are being put out that are not only incomplete in their design but are one-sided exceeding anything I have observed over the past 20 years.

The OGCA is one of the most active general contractor associations in the country when it comes to standing up for the rights of contractors. The OGCA has worked hard to help provide education and training not just to its members but to the industry at large.

The organization has always been willing to work with those who are willing to work with its members. As OGCA president Giovanni. Cautillo points out, there are some who feel they’re smarter than everybody else. This doesn’t benefit anybody, and costs taxpayers millions of dollars due to poor procurement practices.

So why are some owners, and why are some previously good actors either increasing the amount of unacceptable contract language in their tenders or returning to their old ways?

Certainly, we can understand they’re all afraid of what happened over the past years and what COVID-19 has done. No one wants a repeat of those kinds of troubles, but it is not in anybody’s best interest to simply pass that risk down the chain instead of working with those on the front lines to find ways to deal with problems.

There is a lot of work out there and those owners who are proving to be more collaborative and willing to be fair are finding they are getting better prices and more bidders than those that don’t. There is no secret that certain owners in this province pay a premium and get fewer bidders, because of their reputation.

We need to get over our self-importance and belief that somehow were all in separate silos. We need to work together in a co-operative and collaborative manner to ensure project success and economic recovery.

This is everyone’s responsibility including the government, not to interfere but to simply ensure there is a level playing field to encourage the ability of the industry to respond and build Ontario.

Great steps were made with the introduction of the new Construction Act. The legislation is a useful tool but for years now the government has sat on a report that was commissioned to identify the early problems that had become recognized when the Act was introduced, they are causing problems, delays, litigation, and trouble. These must be addressed, why has the government not acted?

Another priority is clearing up the antiquated rules governing the ability for projects to get under way without undue red tape and wasteful costs as our friends at RESCON have been championing for some time. Quit hesitating and start acting. The answers are there. Just get on with it.

In the end it all comes down to the fact that unless we are prepared to set aside our personal differences, prejudices, and work together the job of restoring the economy of not just the province but this country is going to be much harder.

OGCA president Giovanni Cautillo stated that the OGCA along with other organizations like the CDAO, the Ontario Association of Architects (OAA), Consulting Engineers Ontario (CEO), local construction associations, and many others are willing to work and act as a conduit between their members and the buyers to resolve issues quickly to make things better.

You’ll notice I did not say make things in our favour because the OGCA is not just an advocate for general contractors. It is an advocate for the industry. What is good for the industry is good for everyone. It’s time for that philosophy to become the most important consideration.  Let’s work together and stop creating situations for confrontation.

Clive Thurston is the OGCA‘s former president. He can be reached at (416) 399-2250 or email clive@thurstoncs.com.

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