Construction stakeholders are sounding the alarm as some public procurement eschews what they see as a key part of a fair contract.
The British Columbia Construction Association (BCCA) issued an “industry alert” about an increasing tendency in some contracts to remove the “Contract A” section which establishes the existence of a bidding contract between an owner and compliant bidders.
In 1981 the Supreme Court of Canada case The Queen (Ont) v. Ron Engineering established the precedent of using a “Contract A” analysis to set bidding rules in a contract, which is to be followed by bidders and owners with monetary damages awarded when the other party did not adhere to the rules.
“What’s evolved is there’s an expectation within industry and within public procurement that honours Contract A. That’s why we’re so passionate about fair, open and transparent procurement. The lion’s share of both parties are hoping to achieve a mutually beneficial result of the best bid or the best value for the bid as a result of fairness,” BCCA president Chris Atchison said.
Atchison said removing Contract A adds uncertainty to the procurement process and should be worrying to the industry.
“If they eliminate Contract A, they’re saying, ‘We’re abandoning that side of the process. We don’t need to treat all bidders equally and we can use our subjective approach and award to who we want to award, change the scope or bid shop.’ These are things that should be very concerning,” he said.
He added the rise in incidents of Contract A removal started in the past year with a steady increase over the last six months “which provided the impetus for the industry alert.”
“It’s something we felt it was time to inform the industry to beware that it’s occurring. It’s complicated in some cases and there’s work out there to be had but you have to understand the risks that you might be putting yourself in by considering work with these owners,” Atchison said.
Atchison warned while there’s a skilled trades shortage affecting the industry, other areas of expertise such as public procurement knowledge are dwindling at the same time.
“We talk about tradespeople as hard to come by, but estimators and project managers are (also) hard to come by, as are procurement professionals.
“People are leaving government and industry but what we have to remember in all of this is that for more than 40 years industry and public sector procurement experts have worked side by side to establish an understood means of achieving fair, open and transparent procurement,” Atchison said. “There has been a slip in what we would consider best practices and those best practices for the benefit of industry and government objectives need to be shored up.”
He said Contract A is included in large-scale B.C. projects with “true procurement expertise” and that one has to ask why other projects in the province have decided not to use it.
“Do they want to negotiate or be at risk with every one of these projects? When the riskiest of projects include it and have the certainty of Contract A, that is an indicator of fairness,” he said.
“What’s even more concerning is so many of these smaller projects are opening up a Pandora’s Box when this is a time to shore it up, make sure we adhere to best practices, especially with those who don’t have the procurement expertise.”
Atchison added he’s mentioned the Contract A situation to colleagues in Ontario who said they’ve seen similar phenomena in their province.
“We’ll continue to inform colleagues in other jurisdictions and gauge both their response and their experience with this as well,” he said.
He added the BCCA has been proactive about the issue for the better part of a year by holding monthly owners-only forums on best practices for public-sector procurement as well as by maintaining a procurement tip line along with an upcoming webinar on Contract A issues.
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