A new report is shedding light on why Saskatchewan has one of the worst records in the country for finishing highway projects on time.
The report found that – among other things – accepting low bidders, inconsistent penalties, outsourcing engineering consultants and a short construction season due to timing of tenders contributed to the large number of late projects.
The Ministry of Highways and Infrastructure commissioned the report after it noticed significant delays in many of its projects.
In a typical year about 40 per cent of the construction projects are designated as delayed in Saskatchewan, which is about double or triple other provinces consulted for the study.
In the 2013-2014 fiscal year, 51 per cent of projects were late.
The report shows 27 were late due to avoidable delays or errors.
Another 12 projects were delayed for weather, unrealistic completion dates or construction unable to start due to other work not being completed.
"When I heard 51 per cent, that seemed high to us. We were shocked it had gotten to that point," said Shantel Lipp, president of the Saskatchewan Heavy Construction Association.
She said representatives from the construction industry, the engineering industry and government have formed a working group to address issues and are making progress.
She said the short construction season, due to late tenders, has already been improved and the province intends to move towards performance-based procurement.
The group has also increased contract enforcement and are looking at ways to improve understanding of the roles and power of consultants working on projects.
"The report shone a lot of light on the way we were doing business with the ministry," Lipp said.
"We are impressed with the level of buy-in we have gotten from the Ministry of Highways. I think they need to be congratulated for that. Previous governments didn’t have that level of interest."
According to the report, in the past seven years the province has experienced a construction boom due to resource development and infrastructure activity.
The ministry’s capital budget has doubled while it also began relying more on outsourced engineering consultants for design and project management.
According to the report, this meant a loss of experienced internal resources to the engineering consulting industry.
Coupled with the boom of activity, a challenging product delivery environment was created.
There is also an issue with tendering, the report stated.
The process awards contracts almost completely based on the lowest bid, regardless of the ability of the bidder to perform the work or their history.
According to the report, if capacity and past performance are seen as less important in bid evaluation, contractors might be encouraged to compete on more work than they can do, known as "stacking" or "stockpiling."
According to the report, the most common reason for construction delays was a late start by contractors due to work not being completed by the contractor on another project.
Contractors also noted to the researchers that there is a perception in the industry that penalties for late delivery and poor quality work are lacking.
The report shows that due to project delays, the ministry has a standard practice of tendering for 30 per cent more work than the budget allows as it expects carryover to the next year.
While it is common for other provinces to do this, Saskatchewan tenders about 10 per cent more additional work than others.
The higher dollar percentage awarded late in the construction season exacerbates the amount of delayed projects that cannot be completed because of shorter work periods.