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BCCA issues warning about procurement clause omission

By Adam Freill   

Bridges Construction Infrastructure Institutional Law Risk Management Roads

BCCA is warning contractors about unexpected consequences following the explicit removal of Contract A by many public owners in B.C.

The British Columbia Construction Association (BCCA) has issued a province-wide industry alert following the confirmation of cases of removal of “Contract A” from the procurement process by a growing list of public owners, including some municipalities, school districts, universities and crown corporations. The association says, in the absence of Contract A, general contractors and trade contractors should not assume that they will be treated fairly and probably have no legal recourse for being treated unfairly.

In Canadian contract law, Contract A typically includes terms and conditions such as deadlines, evaluation criteria, privilege clauses and often the requirement for bid security. It serves to protect the legitimate expectations and interests of all parties. Its purpose, explains BCCA, is to ensure fairness, openness and transparency between the owner and each compliant bidder who responds to a procurement call.

“The removal of Contract A is the most significant violation of public sector procurement processes that the construction industry has seen to date. It is a serious concern for industry associations and should be of equal concern to B.C. taxpayers,” stated BCCA president Chris Atchison. “When a public sector owner willfully removes an obligation to act fairly in its dealings with you at the start of a project, you have to ask yourself: Do you really want to bid on that project and work with that government entity?”

His organization says the absence of the clause could result in a lack of transparency, bid shopping, unequal treatment, increased risk for bidders, legal vulnerabilities, and reputational damage to the public sector owner.

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The Contract A legal convention was created in 1981 by the Supreme Court of Canada as a result of The Queen (Ont.) v. Ron Engineering. The landmark decision forms the basis of an understanding that all owners have a duty of fairness towards compliant bidders.

“Those who actually do the work in the construction industry cannot proceed on the assumption that it is ‘business as usual,’ given the deliberate removal of Contract A by certain public owners,” stated Michael Demers, legal counsel for BCCA. “Before Ron Engineering, procurement was the Wild West, where bidders were subject to the misconduct of unscrupulous owners, and owners did not know where they stood legally with bidders.”

He said that the ruling has provided relative clarity in procurement rules for the past four decades, giving the industry a legal framework that helped ensure that both owners and bidders were following the rules.

“It appears some public owners want to take us all back to the old days where they can’t be held to account for their wrongdoings,” he said. “It’s a sad day for an industry that is already under so much pressure to perform for the benefit of British Columbians.”

The BCCA is recommending that construction firms proceed with extreme caution in the face of possible implications of the removal of Contract A. They advise that contractors read all procurement documents carefully, use the RFI process to question the intent of the owner’s procurement process in cases where Contract A has been removed, seek legal advice for questions or concerns, and to consider qualifying their bid only when they have fully evaluated the associated risks and are prepared to accept the consequences.

BCCA is also asking that they advise their regional construction association and BCCA of any irregularities in the procurement process through the BCCA Public Sector Transparency Tip Line.

“The Canadian Construction Association is a staunch champion for equitable procurement practices. Projects thrive when partnerships are based on trust, fairness, and transparency. The removal of Contract A risks taking the industry back to a time when bidders were not adequately involved from the beginning of a project, potentially compromising the integrity of the process, which ultimately impacts taxpayers the most,” stated Rodrigue Gilbert, president of the Canadian Construction Association. “CCA continues to advocate for a balanced procurement process, where risk is shared, competition is fair, and innovation is encouraged.”

“When public sector owners remove Contract A, they break the covenant of trust, integrity and transparency that it represents,” added Atchison. “Public sector owners must be held to a higher standard in procurement. We urge public owners to commit to fairness by maintaining Contract A. When it comes to the construction projects British Columbians rely on, it’s in the public interest.”

“BCCA has touched a nerve with this industry alert,” said Steve Ness, president of the Surety Association of Canada. “The issue of Contract A removal has long been an irritant for the Surety Association of Canada. We have encountered this many times over the years: a construction buyer trying to contract out of Ron Engineering by simply inserting language to that effect. In our mind, it’s the equivalent of trying to lift yourself off the floor by pulling up on the top of your socks! We urge contractors to consult with their surety and broker when they see this language to discuss the risks to their submission and company.”

BCCA is presenting a webinar on the implications of the removal of Contract A on June 25 at 10 a.m. (PT). To register visit: https://bit.ly/ContractAWebinar.

 

www.bccassn.com

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