The comments that I hear all the time among economists is directly related to the premise that the economy is heavily based on how well the construction industry is doing.
In essence, the construction industry is the connecting thread between various segments of the economy. It comprises approximately 12 per cent of Canada’s GDP.
It provides the physical plant within which many other economic activities are conducted.
Over the last several years, a number of very large Infrastructure Ontario projects, as well as the other counterparts in provinces across Canada, have stoked the engines of progress.
Taking into consideration the number of building improvements, the construction industry utilizes many of the products and services that are produced by other sectors of the economy, particularly the manufacturing sector.
Because of this intimate connection, it is hard to trace the precise boundary between construction activities and non-construction activities.
I have spent my entire career of four decades watching this industry grow and change with the times.
Although many in the industry would say some of those changes have been a setback, the fact remains that tenders and RFPs are still being issued every day and the construction industry remains healthy.
In many cases, the answer to the question of whether a given activity constitutes construction will depend on the circumstances in which that activity is conducted.
For instance, the installation of industrial equipment or fixtures may be either manufactured or constructed.
Where such equipment is installed in an existing physical plant, without alteration of that premises, it is likely to be considered a manufacturing activity.
However, where it is installed as an integral part of the physical improvement of a premises, for example, the installation of equipment, where substantial modification to the flooring, mechanical systems and electrical wiring is involved, it is more likely to be seen as construction.
In other cases, the distinction between construction and non-construction activities may be more difficult to explain.
The plowing of land is rarely considered to be a construction activity, but the terracing of that same land normally will be viewed as construction. In such a case, the distinction seems to be the purpose or degree of the physical alteration which is made.
To see how so many aspects of the construction industry affect all segments of the economy, it is essential to divide construction into three related groups of activities: design, production (including demolition) and repair.
Design includes the work of architects, engineers and other people who prepare the plans and specifications for the project.
Production covers the execution of the project. It includes all work onsite, including site preparation and excavation and onsite supervision. It does not, however, include the manufacture of materials, nor does it include the transporting, warehousing or distribution of those materials to the jobsite, except where these activities are performed by the contractor or a subcontractor as an integral part of the performance of the contract or subcontract.
Repair must be distinguished from such maintenance work as shovelling snow and cleaning.
The construction industry remains strong in the private sector and despite many different types of document-related issues in the public sector, work continues to flow on a regular basis.
Due to the fact so many taxpaying companies rely on the work that is put out for bid by government, you would think government agencies would make a greater attempt to make it easier to bid these requirements.
However, the complicated documents from government bidding practices make it very difficult for a smaller company to bid.
My suggestion to municipal government, as an example, would be to make the tenders for goods and services vendor friendly, to attract more bidders to the market and further boost the economy.
Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com.
Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.
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