Alberta aims for uniformity in rating contractor performance

Alberta’s construction industry and building owners are moving to close the gap on vendor evaluations, which have remained a source of frustration in both camps, with Alberta Infrastructure (AI) launching its new vendor performance management (VPM) program in January.

The move follows the federal government announcing in spring 2019 it is in the process of developing a simpler vendor evaluation program and the culmination of 2.5 years of work by the Edmonton Construction Association (ECA) which has rolled out its recommendations on establishing performance evaluations for both private and public sector construction.  

Alberta Construction Association (ACA) executive director Ken Gibson said that he can see benefits accruing from the new VPM program, including other provincial ministries can benefit from using the system, plus the ability of ministries to share information on contractors. He said the hope is that such programs will bring more uniformity to provincial government contracts so contractors will not have to meet different criteria within each ministry.

That AI should attempt to bring in a comprehensive rating system for performance is not surprising as public dollars are involved, he said.  “I think this is just an evolution of doing business,” said Gibson, speaking of the new VPM program.  The new AI program relates to services and construction valued at $100,000 or above.

Alberta Infrastructure Minister Prasad Panda said other ministries and municipalities are free to use the   program if they did not have a similar program. “This program will track, analyze and manage performance,” he said, adding the intent of government is to achieve the most cost-effective infrastructure possible. 

Panda said he recognized the need for standardization of rating systems. “I hope going forward we can achieve a more standardized approach that will help the contractor,” he said, adding that he will stress this need to the federal government which is now is assembling its own vendor evaluation program which will impact the construction industry.

The evaluation program will also help government in several ways, Panda said.  It provides the opportunity for contractors to provide feedback to government. “That enhances the performance of all the parties,” he said, which leads to cost-savings, better productivity and a better product.  He said he also believes in face-to-face communications between ministry and construction members. Another positive point of the program is that it will allow the government to make recommendations regarding construction companies on future contracts based upon on a transparent rating system.

“The system is not set up to make contractors fail,” he said, adding “If they fail, then I have failed.” Rather it attempts to “enhance performance and have both sides hold each other accountable.”

The criteria being put forward by AI are similar, but not identical, to the recommended by the ECA. AI will assess contractors on five criteria: quality (rectifying deficiencies, meeting standards, and document requirements); management (legal issues resolved, payment and coordination of sub-trades, milestones delivered, and meeting contract requirements and commissioning);  schedule (meeting milestones and mitigating impact of change orders), cost (change orders supported by detail, accurate, and factual information); and safety (COR certification, meeting WCB and OHS requirements and general site condition). 

The ECA has worked to provide a more streamlined system that works for both the private and public sector as it draws from extensive meetings and subcommittees comprising all levels of government and private developers and contractors. 

“When we started this, one of important things we learned was that owners admitted their vendor performance tools and systems were in adequate and disappointing,” said ECA executive director John McNicoll.

Evaluation programs were too complex. “Paper on paper on paper as they were trying to deal with everything,” McNicoll said, adding they were often fobbed off to a lower level employee to fill out and became in effective.

The result of the ECA’s work has been several reports including an owner’s report, which boils down the evaluation process to one sheet of paper with five criteria. McNicoll said: “The idea is to have a short one page and the ability to talk beyond that page and guideline but not too long to have a meeting on.”

Ideally, he said, the industry should move towards an evaluation system that is similar to the CCDC documents that are universally recognized in the industry. Greater alignment of criteria will also mean that when contractor performances are compared it is an “apples to apples” comparison, he said.