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Procurement Perspectives — Savings on CSPs not worth the risk to owners: Bauld

Stephen Bauld
Procurement Perspectives — Savings on CSPs not worth the risk to owners: Bauld

I was reading a February 12 op-ed written by Mark Casaletto “CSP publication: Change is good…only when done right” in the Daily Commercial News (DCN) and felt the need to provide some procurement context to it.

It has been critical for the industry, over the years, to maintain a proper flow of information. It is a must for contractors and owners to receive and post their information from legally required sources.

Documents of the CSP (Certificates of Substantial Performance) nature need to be published in a compliant newspaper to ensure an open, fair and transparent process. From a purely procurement perspective on the issue of CSP publication, they should be found in a system which is most openly available and compliant for all contractors and owners to be able to view.

 

The risk is very high to owners while the savings are very low for CSP advertisers when going with an unproven, potentially non-compliant option,

— Stephen Bauld

 

For everyone to be provided the opportunity to follow a standard process, these requirements were clearly identified in the op-ed by WeirFoulds’ Glenn Ackerley, one of Canada’s leading construction industry lawyers:

Section 87 of the Legislation Act defines a newspaper as follows:

In every Act and regulation “newspaper”, in a provision requiring publication, means a document that,

Is printed in sheet form, published at regular intervals of a week or less and circulated to the general public, and

Consists primarily of news of current events of general interest (“journal”).

Compliance to standard procedures is always a concern when you are dealing with the government. The mandatory conditions that must be satisfied by a bidder typically appear in the tender documentation. Most documents that are issued by government state that CSPs must be advertised in a manner that is consistent with the legislation.

Quite often, when we talk about risk and reward in purchasing, it relates to how much risk are you willing to take, what is the cost, as well as the positive and negative aspect of taking that risk. In the case of CSPs, it would appear the risk is very high to owners while the savings are very low for CSP advertisers when going with an unproven, potentially non-compliant option.

“I doubt any owner would choose to be involved in that first ‘test case’,” noted Ackerley.

Strong communication with respect to sending and receiving any information will reduce the prospect of conflict.

As we all know, poor communication within the contracting process can occur in many ways. Changing the time-tested process related to CSPs would seem to be a risky proposition with very little to gain.

The long-standing process in the industry for all suppliers, contractors, as well as subcontractors, and owners in relation to CSPs, has rested on the foundation of information coming from a reliable, legitimate, and enforceable source by way of the DCN’s leadership in this area.

Any deviation from standard practice in matters like this can only prove to be disruptive, when weighing the pros and cons. By moving to any unproven system, where there is a clear lack of industry-wide clarity and understanding of the legitimacy of a new system, only opens the door for disputes.

 

Why take any more chances by opening yourself up to the possibility of even more obstacles

— Stephen Bauld

 

The construction industry is already, by its very nature, fraught with pitfalls that can come at you from every direction. In my opinion, why take any more chances by opening yourself up to the possibility of even more obstacles for no apparent gain.

Over the years, I have seen owners, contractors and subcontractors take positions that they perceive as a “value for money” proposition- this would not be one of those ideas worth taking an unnecessary chance on.

In my opinion, I would stick with what I know is a proven, reliable market leader rather than take additional risk with an unproven idea that has not yet been legally tested.

 

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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