Roadbuilders preparing response to MTO clause

The Ontario Road Builders’ Association (ORBA) board of directors is expected to formulate its response today to a new pre-qualification exclusion clause of the Ontario Ministry of Transportation (MTO).

Meeting slated for today

DCN correspondent

Under the clause, any contractor who is in a legal proceeding with the MTO can be disqualified to bid on contracts. A contractor can also be disqualified if anyone in the family is in legal proceedings with the MTO.

The clause went into effect Feb. 1. It gives the MTO “absolute discretion” to bar a contractor from the tendering process.

Rob Bradford, executive director of ORBA, said the association would likely decide a position on the clause at a meeting scheduled for today.

“We have arrived at the conclusion that we don’t like and we don’t appreciate the kind of language we see in this clause, but we may come down on the side that it’s the owner’s right and there’s not a lot we can do about it. On the other hand, a good number of the membership at the moment would like to take some very definite action to try to get some changes.”

The exclusion extends not only to a contractor who is involved in legal proceedings with the MTO or was as of Feb. 1, but also to a contractor who is related to any person — either through business or by blood — who is in legal proceedings with the MTO.

The clause, available on the MTO’s Web site at www.mto.gov.on.ca, defines a “person related” to the contractor as: “a person, corporation, partnership, limited partnership, trust, joint venture or other business association, or any combination thereof, which directly or indirectly and in whole or in part: a. controls or is controlled by; b. has any beneficial or other interest in or in whom any beneficial or other interest is owned by; or, c. is related by blood, marriage or adoption.”

Bradford said that wording is “a good instance of things that are of serious concern to us.”

“I think even if you were to buy into this, you’d have to see if you could get some massaging of wording like that because that’s a very serious concern — the impact it might have. There are related people in companies here that might not have anything to do with each other.”

The exclusion period is for up to three years. The clause allows for an appeal of the period to the qualification committee.

The MTO clause also states contractors who have received “an unfavourable assessment by the ministry in respect of the contractor’s past performance on any other contract for work or services with the ministry” can also be excluded.

The clause was introduced into contracts “to protect the public interest,” said Dana O’Brien, communications advisor for the MTO.

“In the past, the ministry has dealt with contractors who’ve driven up the cost of a contract either by the way they administer it, by the way they manage it or through legal proceedings. So all of these things inevitably drive up the cost of a contract and that is at taxpayers’ costs.”

O’Brien said no contractor has yet been excluded through use of the clause.

She said the clause “is not unusual”.

“It is the same clause that we see in federal contracts. The federal works department has this sort of clause.”

She added that the City of Hamilton and the Town of Oakville also have pre-qualification exclusion clauses.

Jane Courtemanche, director of corporate communications for Oakville, said the town’s clause “is only to be used when the award of the contract could somehow prejudice an existing legal action. It would prevent a situation where a bidder may use an award of a contract to somehow give himself an advantage or leverage in any legal action in which we may be involved.”

According to Oakville’s clause, the exclusion is limited to “the proposed general contractor or sub-contractor or vendor within the submitted responses” to its tender.

Bradford said the MTO clause “goes a little beyond from what Oakville did. On the other hand, maybe it stops a little short of some of the other ones.”

“They seem to have cherry-picked from Nanaimo, and Oakville, and the City of Kitchener is reasonably similar. So it looks like the ministry has taken all the good stuff they’ve wanted out of various documents.”

Although some association members might want to take action, Bradford said the MTO appears to have the legal right to all aspects of the clause.

“They seem to have very, very carefully chosen what’s in there too, based on what’s been upheld by court decisions in the past. I’ve done quite a bit of research into this thing now and I’ll tell you right off the top, I don’t think there’s anything that they’ve put in there that they probably couldn’t establish that they have the legal right to do.”