Learn from the mistakes of others — you can’t live long enough to make them all yourself. – Martin Vanbee
Last issue I talked about the surge in OGCA members supporting industry practices and values, the Association’s Ethics and each other when faced with unfair and risky procurement practices in the Tendering and Awarding of Construction services.
Sadly, this continues. As each week goes by, more examples of these problems cross my desk and require action.
The good news, and one all owners and their procurement staff should take note of, is that we have had enough and we are now seeing the bidders, whether OGCA members or not, standing together to say no.
Each time we say no, positive change has occurred, emphasizing the need to keep saying no. There are no major projects in this Province where the bidders’ list doesn’t include either all, or mostly all, OGCA members. If we won’t build it, who will?
This leverage comes with great responsibility and should not be used without proper cause. The OGCA is always willing to work with owners and discuss the issues raised by the bidders in a collaborative and cooperative manner, to seek solutions that will avoid qualified bids, no bids, over-budget projects and refusal to re-bid.
Here are some of the challenges occurring with disturbing frequency:
- Poor prequalification systems, resulting in qualified bidders being disqualified without a sufficient and valid explanation;
- Failure to have a transparent and fair PQ system that includes an honest and detailed debriefing procedure;
- Private openings of taxpayer-funded projects which does not adhere to the Fair, Open and Transparent clauses in the Broader Public Sector Procurement Policy which, while not all public bodies are under, still sets the bar for fairness and openness;
- Over-complicated closing policies and refusal to adopt two-stage closings, then having to disqualify a bidder for a meaningless missing piece of information that had no impact on the lump sum tender;
- Undisclosed award criteria: one of the most basic rules in Tendering Law is that you can’t have hidden criteria, yet we are seeing this happen;
- Excessive award times and asking bidders to extend their bids, showing no respect for the time and effort that goes into submitting a bid; nor does it recognize that extending a bid needs the agreement of numerous subtrades and suppliers which takes time and may not be possible;
- Compounding this practice if an extension is agreed to, the owner refuses to extend the contract completion time!
- Cancelling the project because of the above issue, wasting thousands of dollars and man-hours by the bidders, and the cost to taxpayers for staff time to re-design and re-tender the project, if possible;
- Not having the funding in place prior to Tendering a project. This is one we do not understand as several public bodies use this excuse to ask for extensions or cancel projects. Our discussions with the Ministries responsible for the funding indicate this is just not true! So what is the problem?
- Failure to invest in accurate and complete documents and asking for a Cadillac on a Kia budget.
- One of the most common issues we are seeing today is projects coming in excessively over-budget, spawning even more bad practices as owners try to save their projects.
- As a result of the above, owners may try to delay the award and ask for the aforementioned award extensions, perhaps hoping to find additional monies.
- Using the Tender processes as a ‘market sounding” due to a lack of a defined or realistic budget.
- Trying Post Tender Addendums which are not supported by any industry professional or organization in Canada. The industry views this as “bid shopping.” Whether a Tender is opened publicly or privately, anyone who has lived this industry knows that the “jungle drums” start immediately after closing and everyone has a pretty good idea as to where they stand. To blindly believe that, because you opened a tender privately, it makes it okay to issue a PTA is not realistic.
- Another challenge lately sees owners trying to engage the General Contractors as designers, asking them to share pricing information, re-design or suggest improvements to the projects, meet together to discuss these methods. Without compensation of any kind and violating most, if not all, of the rules surrounding Bidding and Tendering in Canada, not to mention the Competition Act.
- Reprisal clauses to intimidate the use of legal remedies by bidders;
- The Industry has excellent Guides developed to deal with most, if not all, Tendering challenges, particularly when bids are over-budget, through CCDC or CCA guides and documents. Owners can not only find solutions fair to everyone but methods to avoid these issues in the first place.
The above constitutes a summary of some of the major issues we are experiencing in the procurement of our services and why contractors are saying enough is enough. Through the OGCA, they are taking action and it is having an effect. Many of the above poor practices or attempts to re-bid through a questionable re-bid system have been stopped.
While some procurement organizations treat us as the enemy and resent our criticism and involvement as a threat to their positions, far more reach out to work with us and work together to develop the best Design and Construction Procurement Services possible. The OGCA partners with the OAA, CEO and several major construction legal experts to provide education and training for procurement departments interested in a collaborative relationship with the industry – one that will only benefit their community.
So why can’t we learn from the mistakes of others? After all, life is short enough to keep making new ones. We can either learn from previous mistakes or continue to make the same ones over and over, learning little from what has transpired before.
We, and our industry partners, welcome the opportunity to work with any buyer of our design and construction services. We are all in this together and we have a wealth of valuable experience and knowledge to bring to the table. Let’s not let professional blindness get in the way of a truly collaborative and consultative process that has a proven track record with many owners.