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Bigger is not always better: Thurston

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July 31, 2013 by STAFF REPORT

About half of a billion dollars of taxpayers’ money could be spared from the Eglinton Crosstown transit project if it was tendered into smaller pieces, says the chairman of the Construction Design Alliance of Ontario (CDAO).

“Simply put, bundling the station and maintenance facility construction into one contract has hamstrung the tendering process, limited competition, stifled innovation, and isolated the small- and medium-sized construction and design firms,” said Clive Thurston, who is also president of the Ontario General Contractors Association (OGCA).

An OGCA analysis suggests that if the $4-billion tender had been broken down into smaller parts, up to 10 firms could have put in bids. This, according to the analysis, would increase competition, lower costs and save up to $500 million.

However, Thurston argues, the size and scope of the project meant only two consortiums expressed interest: one Canadian-based, one led by foreign multi-nationals.

“More Ontario firms working on individual projects have a direct impact on the local economy through employment, taxes and investment,” he said. “Limiting competition has the reverse effect.”

The CDAO is not opposed to bundling, he added, but it has to be done for the right reasons.

“We believe the Eglinton Crosstown project is just too big to be handled under a single contract,” he said. “The current scale of the project is such that there is a huge risk profile, and even some of the largest companies in Canada are not willing to bid. Breaking it up into smaller chunks would result in better value for taxpayer dollars.”