Builders’ Digest - TCA Connectfiles.tcaconnect.com/BD/06bd2009-2.pdfLearn about the “The Big...

Builders’ DigestBuilders’ DigestToronto Construction Association’s Quarterly PerspectiveToronto Construction Association’s Quarterly Perspective Vol.3 No.2 Quarter 2 2009

Line by LineAn inside peek at getting infrastructure work

THE TCA: KEEPING THE PROMISE IN TOUGH TIMES

CONFUSION SLOWS STIMULUS FUNDING

Vol.3 No.2 Quarter 2 2009

THE TCA: KEEPING THE PROMISE IN TOUGH TIMES

CONFUSION SLOWS STIMULUS FUNDING

Line by LineAn inside peek at getting infrastructure work

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This is an afternoon session from 1:30-4pm at the Hilton Suites Toronto/Markham

Conference Centre, 8500 Warden Ave. at Hwy 7See Oct 27 for description

SAVE THE DATESTARTING SEPT 22TORONTO CONSTRUCTION CENTRE

www.tcaconnect.com

tuesdaysPublic Sector Construction Project Opportunities

WATERFRONT

INFRASTRUCTURE

PROVINCIAL PROJECTS

COLLEGES & UNIVERSITIES

MUNICIPALITIES

HEAR DIRECTLY FROM PUBLIC OWNERS AND BUYERS OF CONSTRUCTION

TRANSPORTATION

TorontoConstruction Association

Since 1867

LEARN: Types of project opportunities available How to pre-qualify Whether security clearances are required How construction and consulting services are procured Details on construction and consulting contracts used and much more…

SEPT 22

OCT 6

OCT 13

OCT 27

TBA

TBA

Learn about the “The Big Move” where the province has committed

$11.5 Billion in funding with over 1,200 kilometres of new rapid transit

lines to get you where you need to go across the GTHA.

See how the TTC fits into this plan and learn how to bid on TTC construction projects.

Learn how Waterfront Toronto is helping to reduce urban sprawl, develop

sustainable communities, redevelop brownfields, build more affordable housing and

create more parks and public spaces in a massive long term redevelopment of our

waterfront.

Learn how you can get involved in bidding on the renewal of the province’s

hospitals, courthouses, roads, bridges, water systems and other public assets. Find

out about the AFP model and get an update on the Government’s ReNew Ontario

2005-2010, a $30 billion strategic investment plan.

Hear from one of Canada’s largest real estate management companies which

completed 2,000 construction projects last year valued at more than $400 Million.

Learn about ORC’s revised project delivery model and how they have been working

with industry for your benefit.

Learn about the two- year, $2 Billion Knowledge Infrastructure Program to help

modernize facilities at Canadian post secondary institutions and how you can

participate locally in this well needed and massive investment. Find out which

Colleges and Universities are ready to go with their projects.

Is any of the $4 Billion Infrastructure Stimulus Fund flowing to municipalities yet. We

have invited a number of municipalities in the GTA to share their views and to show

our members how to get involved in this unprecedented stimulus. Stay tuned for

confirmation of who and when.

FEDERAL PROJECTS

SEPT 29 DCC has one client, the Dept. of National Defence with plenty of growth planned

in places like CFB Trenton. Learn about DND infrastructure needs and what to

watch out for when bidding on DND work. Expand your bidding opportunities by

considering DCC projects.

PROVINCIAL PROJECTSSEPT 29

contents

DEPARTMENTS

29 Upcoming Events

30 Advertisers Index

Page 4

FEATuRES

4 The Positive PictureFor board chair Lee Baker, being a part of the TCA means even more in tough economic times By Andrew Brooks

6 A Good Shepherd in Bad TimesIt’s hard to stay on top of everything in a huge and fast-paced industry like construction, but the Toronto Construction Association has proven to be fast on its feet in helping members keep pace By Andrew Brooks

14 Working the DetailsThe heavy hitters providing GTA infrastructure work give us the details hopeful bidders will need to know By Andrew Brooks

26 Dollars in DisputeWith billions of dollars up for grabs, some pushing and shoving in the queue has to be expected By Andrew Brooks

Page 6

Page 14

Builders' Digest Quarter 2 2009 | 3

TCA Builders’ Digest is published for the Toronto Construction Association

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CHAIRMAN'S MESSAgEBuilders’ DigestBuilders’Toronto Construction Association’s Quarterly PerspectiveToronto Construction Association’s Quarterly Perspective

LEE BAKER HAS A uNIQuE VANTAgE POINT ON today’s troubled economy. In fact he has more than one. As the senior sales repre-sentative of Tremco Canada, he sees things as a supplier of building envelope prod-ucts and services. As chair of the board of the Toronto Construction Association, he takes the perspective of an organ-ization that represents the nation’s largest industry in the nation’s economic centre.

So it’s not a question of taking the big-picture view. The question is: which big picture?

From the perspective of Tremco, Baker says, the fiscal year that ended in May was “pretty much on a par” with the previous one. The company hasn’t so far seen much of a decrease in the Canadian market.

One reason may be the fact that build-ing envelope products have customers in all sectors of the industry: residential and commercial, for new building projects and for restoration and renovation work. This broad base gives the company a survival edge. “When new construction

The Positive Picture

is down the restoration market picks up, and vice versa,” Baker says. “Right now we’re seeing a boom in restora-tion. That helps to equalize our years.”

Baker holds to the adage that Canadian construction lags nine to 12 months behind its U.S. counterpart, and he does see signs that Canadian construction is entering a slowdown. For one thing, subtrades are reporting fewer jobs to bid on, he says. But he isn’t ready to panic yet.

“We’re optimistic that if the U.S. pain moves north it may not be as bad as we think,” Baker says. “Sure, some guys who used to bid hundreds of jobs a year might now be down to 10 or 20. But if they were only winning a couple before anyway, they’re not necessarily in trouble if they can still win the same number.”

In today’s straitened circumstances, owners and project managers have to do their homework and have financing and other elements firmly nailed down before going to tender, whereas when money was more readily available they could

For board chair Lee

Baker, being a part

of the TCA means

even more in tough

economic times

By ANDREw BROOKS2009 TCA board

chairman Lee Baker

4 | Builders' Digest Quarter 2 2009

look after some of those details later on in the project cycle. “The numbers of tenders may be down but they’re better qualified now,” says Baker. “It’s like we’re greenhousing our seedlings first, making sure they’re viable, where we used to throw seeds out randomly.”

INDuSTRIAL STRENgTHThe influx of public stimulus funding is benefitting a select number of trades, Baker says. “In the civil area there’s a lot of stimulus coming in, and also with some of the institutional work. There’s lots of new stuff on the boards, general contractors have announced new work and there seems to be a lot of confidence right now.”

Confidence aside, Baker supports TCA President John Mollenhauer’s view that now is the time for construc-tion businesses to stretch beyond the comfort zone.

“At the TCA annual general meeting in January, Geoff Smith [president of EllisDon] was a speaker, and that was his message too,” Baker says. “How do you survive a recession? Think outside the box; look for new kinds of work. That doesn’t mean going off on a wild tangent, like going from building bridges to building old-age homes. It’s just about changing what you normally do and adding something new, incrementally."

This is where the TCA really comes into its own as a member-driven organization that takes the notion of “members sup-porting members” very seriously, Baker

says. The TCA helps members look at new opportunities in numerous ways, notably via the seminar series it’s running this fall where major public-sector agencies are highlighting their construction activities for TCA members.

“Government tenders aren’t as large, people don’t do their homework, and they don’t see them as worth going after,” Baker says. Also discouraging potential bidders is the fact that public-sector spending has strict requirements when it comes to openness and fairness, and these tend to complicate and lengthen the process of qualifying to bid and winning work.

Still, Baker feels it’s worth the effort. “The more you prepare, the better off you’ll be as you go forward with these projects.”

The TCA can play a huge role in intro-ducing members to the opportunities that are out there. Baker points to the association’s huge range of services, such as job boards, courses and seminars on a wide range of topics, and resources like the “Construction Book” — TCA’s membership directory and industry buyer’s guide.

But for Baker, the real strength of TCA membership lies in the networking opportunities it brings.

“As a contractor or a trade looking for help, where do you turn? You look to your peers, and the TCA is simply the best way to do that. We’ve been there, we know how the industry works and we can connect you with everybody and anybody.

“It’s really true — it’s all about members supporting members.” |BD

Lee Baker at a TCA executive meeting in September

“

”

There’s lots of new stuff on the boards, general contractors have announced new work and there seems to be a lot of confidence right now

— Lee Baker, Senior Sales Representative, Tremco Canada


It’s hard to stay on top of everything in a huge and fast-paced industry like construction, but the

Toronto Construction Association has proven to be fast on its feet in helping members keep pace

By ANDREw BROOKS

VALuE-ADDED SERVICES

“THERE ARE OPPORTuNITIES IN EVERy ECONOMy.” The sentiment is familiar to anyone who has talked to Toronto Construc-tion Association (TCA) President John Mollenhauer about what construction companies should do to survive the downturn. As the head of an organ-ization whose mandate is “members supporting members,” John and the whole team at the TCA have adopted a highly proactive response to an ailing economy, enhancing the organization’s services to members and developing new ones to meet the new challenges that arise every day. The core goal is to make as much information and as many value-added services as possible available to the membership. That mission has only intensified as economic challenges mount and the association itself feels the same pressures its members do.

A gOOD SHEPHERD

IN BAD TIMES



“We’re committed to being among the best in the country in the core services we deliver to the industry,” Mollenhauer says. “Those include plans rooms, networking functions and social events, education pro-grams, topical seminars, legal and dispute resolution services, publications, govern-ment outreach, awareness campaigns and much more.” A key TCA mission is to help members find work, and to help them understand the prequalification, procure-ment and contract hoops they have to jump through to get it. Knowledge is power, and education is the key to knowledge.

“Our members continue to be focused on education,” Mollenhauer says. “Of course The Construction Institute of Canada is a primary provider, but we also offer a strong educational program directly through the TCA.” Focused on retraining and professional development, the TCA’s courses are typically sold out and member feedback is excellent.

There’s more to the TCA’s educa-tion services than the courses that keep members up to speed on new trends and

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Our members continue to be focused on education. Of course The Construction Institute of Canada is a primary provider, but we also offer a strong educational program directly through the TCA— John Mollenhauer,

President, Toronto Construction Association

TCA president and CEO John Mollenhauer


developments. The association finds it is able to react quickly to changes by offering seminars to members. “Whenever new legislation is passed, or a new or revised contract document is released,” says Mary Thorburn, Assistant Vice President, “we’ll offer a seminar on that topic, explaining how members will be affected. We get top-level content experts, like lawyers, to deliver the seminars so it’s a really effective way to help members stay on top of industry developments.”

There’s also a strong legal and documentation dimension to the construction industry, and the TCA offers comprehensive resources for members so they can understand everything there is to understand about the laws that govern construction, how contracts are structured, and new issues and trends. The association publishes a series of “Layman’s Guides,” which explains specialized topics in clear, non-specialist terms. The TCA is work-ing on a couple of new ones, including one guide that clarifies the sometimes controversial concept of “green building.”

The TCA also provides a broad range of counselling services, offering advice to members on matters related to contract interpretation, dispute resolution, the Construction Lien Act and alternative types of recourse for members struggling to get paid for work. The association regularly deals with construction buyers on behalf of its members to resolve issues, both for individual members and on an industry-wide basis. Examples include situa-tions where buyers impose excess accountability on the contractor when it properly belongs elsewhere.

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Polyanna Fok, Director of Membership (left), confers with TCA Assistant Vice President Mary Thorburn


“We act to correct those situations,” Mollenhauer says, “but of course we prefer to pre-empt them if we can. When reverse auction tendering was popular, we wanted to mitigate its negative consequences for our members, so we intervened with buyers to prevent them from happening in the first place.”

This year the TCA is beefing up this kind of ‘high-touch’ member service by revamping its long-standing alternative dispute resolution (ADR) practice. The new service will launch next year.

THE gRASS ROOTSTCA membership has grown steadily over the years to about 2,200 member compan-ies, but what’s remarkable is that more than a year into the most severe recession in decades, TCA members are just as convinced as ever of the value of being part of this association. “Most ICI con-struction industry businesses are down by a good percentage,” says TCA Executive Vice President Kim McKinney. “In spite of that, we can say that we have a strong membership that has remained stable.”

That stability is no accident. The TCA makes a point of being aware of member needs and challenges, and has made adaptability a way of life. “Obviously with the recession there are people who go out of business or reduce staff,” says Polyanna Fok, director of membership. “So we have worked very hard with new people coming in at member companies to make sure they understand what the TCA services are all about. Facility tours are part of the agenda, so that new mem-bers feel that the TCA is their facility. We respond to members’ questions, to help them understand why TCA membership is a good decision.”

When new members join the TCA, they’re automatically enrolled in the Can-adian Construction Association (CCA) and the Council of Ontario Construction Associations (COCA) as well. These

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“ ”We’re committed to being among the best in the

country in the core services we deliver to the industry— John Mollenhauer, President, Toronto Construction Association


Lee Baker and John Mollenhauer compare notes


organizations work with the federal and provincial governments, respectively, on important issues affecting construction, and the TCA provides active support in each sphere. The association works independently on the municipal level.

The downturn has also had an impact on the TCA’s social calendar, as

companies restrict employee attendance, but here again the organization has responded by adapting to circumstances and scaling back as required. Despite that, it has still managed to "do more with less" — the 2008 TCA Christmas lunch set a record with almost 2,500 attendees.

The TCA’s strong outreach to members

has been highly effective. In addition to more interest in the Buyers Guide and Membership Directory, there are more people becoming available to take part in organizing TCA events. And in some cases, Fok says, the interest is strong enough that members touch base just to see what’s coming up.

“The more the members become engaged, the more likely they are to remain members over the long term, because they really see that it’s paying high dividends,” Mollenhauer says. “It’s an extraordinary value, because we’ve been able to stay affordable while expanding the quality and breadth of what we provide.”

FAST FORwARDA huge part of TCA outreach is achieved through improved communication. E-Connect, for example, keeps members informed monthly about such things as upcoming membership events, free seminars, informative webinars and


Informal discussion at the close of a board meeting. Seated left to right: executive at large Bruno Antidormi, Director Mike Kern, Director Dave Kueneman, Director Ian Steer. Standing l to r: Chair Lee Baker, Director Craig Lesurf, Chair, Trade Contractors’ Division Albert Salvatore, President and CEO John Mollenhauer

(Left to right) TCA president and CEO John Mollenhauer, 2009 chairman Lee Baker, vice chairman and incoming chairman glenn Ackerley, and executive vice president Kim McKinney



John Mollenhauer and his Executive Assistant Evelyn Kilcullen prepare for the September board meeting

Kim McKinney at work

“ ”Most ICI construction industry businesses are down by a good percentage. In spite

of that, we can say that [TCA has] a strong membership that has remained stable— Kim McKinney, Executive Vice President, Toronto Construction Association

important industry news. Builders’ Digest, on the other hand, focuses on profiles and perspectives.

Normally referred to as the “Who’s Who” or the “Construction Book,” the TCA membership directory and industry buyers’ guide is shared across the associa-tion’s membership, with some 4,500 copies distributed. It is also sent to construction buyers, and serves to remind them that the TCA offers one of the most compre-hensive sources of construction products and services that they’ll find anywhere. All in all it adds up to some unbeatable exposure. And the TCA now updates the online version four times a year.

The TCA has embraced online educa-tion as well. It recently launched a webinar on its Electronic Plans Room to help members get the most out of the facility.

This used to be an on-site event, but now the instructor can conduct the seminar in his office, and the attendees don’t have to leave theirs. The seminar can be run for groups or individuals which makes it that much more convenient for members.

There’s a full roster of TCA committees already at work on various industry issues, but the association is in the process of launching a new one focused on best practices for small and mid-sized busi-nesses. The idea arose at the initiative of Joel Baker, a partner with SBLR LLP and a TCA board member, and will enable SMB owners to confidentially toss around ideas and initiatives that they might not be able to share with anyone else.

One major industry development that the TCA is watching is building information modelling (BIM). BIM is

the three-dimensional successor of com-puter-aided drafting (CAD), and uses 3-D building modelling software to produce a building information model that incorporates building geometry, spatial relationships, geographic information, and the quantities and properties of building components.

“We see our role as facilitating the learning of BIM,” says Kim McKinney, Executive Vice President. “It’ll be a long process, and require a lot of education. It’s a very new and different thing for people in the industry, but BIM training is already beginning to be required in some RFPs, so the industry has to get up to speed fast.”

The TCA’s ability to adapt quickly has been reinforced by ‘pushing’ responsibil-ity out to staff leaders in each of the areas


that the TCA covers. “There have been a lot of changes over time, but we’re now well positioned to weather the storm,” Mollenhauer says. “Now everyone’s responsible and accountable for their specific area, and we work really well as a team.”

Bringing in new staff members to occupy key positions has kept new ideas flowing into the organization, while the presence of industry veterans provides a bit of a reality check. “It’s a nice balance,” Mollenhauer says. “We stay fresh and we stay real at the same time.”

Like so many of its members, the TCA has had to reduce its staff complement to cope with the challenges of the recession. “We try to be a leader in that respect,” Mollenhauer says. “We did that last year before we were even affected by the recession, and we continue to streamline to provide a good service at affordable cost.” The TCA is “lean and mean,” he says, but its performance is as good as ever. In spite of the reductions, the association continues to add and

improve services to members.“The staff here have to wear a lot of

different hats,” says Evelyn Kilcullen, executive assistant to the president. “People have had to assume more roles than in the past, but you never hear a complaint. Whenever extra hands are needed on some project or event or in any way, you can count on everyone to help out.”

Staff strength enables the TCA to pro-vide a free affidavit service for members, and sign statutory declarations for them at no cost — a big advantage as lawyers’ fees for these services add up. There are four commissioners of oaths on staff, and Mollenhauer is a notary public.

The TCA has a large board of directors, headed up by Lee Baker, an industry veteran who fills the role very capably. Baker’s term is about to end, and Mollen-hauer says that the incoming chair, Glenn Ackerley, will continue the tradition of strong board leadership. Working with the board, the TCA’s 19 committees combine the strengths of association

staff with broad, expert representation from industry. Further assuring a bright future is the active participation of the 300 to 400 construction executives on the Young Construction Executives’ Commit-tee, all of them under 35 years of age.

Mollenhauer believes that the worst of the recession is arguably in the past. But the TCA still anticipates a couple of very difficult years ahead for the construction industry, years that will challenge the association’s members to find work that’s profitable and aligned with their experience and skills. “Where they have to adapt, we’re here to provide that continuing professional development, the training they need, the insight into qualification and contract criteria that they’ll have to have to stay ahead of the curve,” Mollenhauer says.

“Those that have to change to get work will need to be well prepared for the nuances of that new market. We want to be as thorough as we can in our role as a good shepherd.” |BD


TCA Executive Vice President Kim McKinney presents a seminar to members at the TCA


Toronto Construction Association’s Formal masquerade ball at The Liberty Grand

Saturday, February 13th, 2010

An EvEning of MErriMEntMardi Gras

PuBLIC wORKS AND gOVERNMENT SERVICES CANADAORgANIZATIONPublic Works and Government Services Canada (PWGSC) is a common service agency for the Government of Canada’s departments, agencies and boards. Under Canada’s Economic Action Plan (EAP), PWGSC promotes infra-structure projects, repairs and restores federal buildings and bridges and enhances the accessibility of buildings where federal services are provided. It also provides procurement, real prop-erty management, translation, banking and industrial security support to other government departments that receive funds through the EAP.

PWGSC is the largest owner and manager of office space in Canada, and as the central purchaser for the Government of Canada it purchases some $12 billion in goods and services each year.

THE PROJECTS PWGSC’s construction projects for existing and new facilities as well as heavy civil engineering (bridges, dams, etc.) vary from very small projects involving fit-ups and repairs to very large projects. The dollar value of PWGSC projects ranges from under $10,000 to tens of millions of dollars.

PROJECT FORMATPWGSC almost always uses an invita-tion to tender where the lowest bid is awarded the contract. Design-build and construction management (CM)

are used from time to time. CM may be used where fast-track project delivery is required on a series of projects, allowing start of construction prior to completion of full design. Design-build may be an option when the scope of work is very clear and can be defined by a performance specification.

DOCuMENTATIONPWGSC follows the Government of Canada standard form of construction contract. This contract is used by all departments when the estimated value is over $100,000. For projects with an estimated value below $100,000, PWGSC uses a slightly modified stan-dard form of contract. This is not a CCDC 2 document, but rather a Treasury-Board-approved standard contract. The modifications are that there is no requirement for bonding and no dictated insurance coverage (covering the contractor’s responsibil-ity to meet legal requirements).

General contractors are required to fill out bid and acceptance forms, identifying themselves, their price and their bid security.

PREQuALIFICATION PWGSC rarely prequalifies contractors or subcontractors. When prequalifica-tion is done, it is usually based on past experience on related projects. It is normally required for security reasons or on very specialized work such as heritage masonry or ironwork.

When prequalifying, PWGSC usually looks only at the general contractor.

On very specialized files, PWGSC may establish minimum criteria that gen-eral contractors must use to prequalify their subs. PWGSC does not seek contract security (i.e., Subguard) from subcontractors; this is left to general contractors to co-ordinate.

Architectural and engineering (A&E) services are procured openly. The North American Free Trade Agreement requires postings for services when the estimate is over $76,500. Standing offers are a key delivery methodology for architectural and engineering services.

PWGSC does not maintain a prequali-fied bidders list. A rotational sourcing system (called SELECT) is used for requirements under trade agree-ments (architectural and engineering under $76,500 and construction under $100,000). Firms can register online at any time to be added to this system. The system is rotational, but there is no equalization of the dollar amounts each A&E provider gets.

BONDINgConstruction firms must provide bid security for projects where the notice requires (for projects estimated over $100,000). Bid security can be either through bonds or a security deposit.

When bid security has been requested, the successful firm will be expected to provide contract security — either a performance bond and a labour and materials payment bond, each in an amount equal to not less than 50 per cent of the contract award

INFRASTRuCTuRE PROgRAMS

The heavy hitters providing major infrastructure work in and around the GTA give us an inside scoop on the details hopeful bidders will need to know

By ANDREw BROOKS

wORKINg THE DETAILS


amount — or a security deposit in the amount of 20 per cent of the contract award amount.

BIDDINgWhile no formal detailed analysis has been done to date, there are no indica-tions that there has been a significant change in the number of bidders due to the economic downturn. The numbers do vary significantly based on project location, type of work and industry availability. PWGSC always wants a good selection of firms bidding on its work.

PAyMENTThe majority of PWGSC projects use an architect or an engineer engaged from the private sector to review and recom-mend all progress payments submitted by general contractors.

SPECIAL CIRCuMSTANCESPWGSC uses standards and perform-ance requirements, as opposed to specifying specific types of equipment, in order to meet trade agreements and maintain a fair, open and transparent tendering process. Specific equipment will be identified in specifications if there are reasons only one product is acceptable, for example when intellec-tual property issues are in play, or when there is specific software in an existing piece of equipment, where proprietary rights exist.

A formal dispute process is included in the contract. Variations exist, but most disputes will follow a negotiation process through different levels, fol-lowed by mediation. Some go as far as binding arbitration. External mediators may be used as agreed to between the parties.

Most construction work where the contractor has access to federal government property will require a designated organization screening (DOS) of the firm and reliability checks of the employees having access to the site. Some projects will require higher levels of security depending on

the type of work and the end product being delivered.

PWGSC contracts do not include penalty clauses.

FORTHCOMINg wORKToronto-area projects include access-ibility upgrades, electrical work, roof repair and upgrades for heating, venti-lation and air conditioning systems in federal government buildings in the Toronto area. The PWGSC facility management provider, SNC Lavalin-Profac, will contract much of the work.

Any PWGSC projects will continue to be sourced through SELECT (a database of approved suppliers provid-ing construction, architectural and engineering services as well as related maintenance and consulting services) or GETS, and users can contact SNC Lavalin-Profac on their bid processes.

NOTESThe Business Access Canada website provides general information, and can be found at: www.contractsCanada.gc.ca/.

DEFENCE CONSTRuCTION CANADAORgANIZATIONDefence Construction Canada (DCC) solicits, awards and manages goods, construction and services contracts for projects on behalf of the Department of National Defence (DND). “Our goal is to maintain a practical and fair

working relationship with industry while ensuring secure, timely and cost-efficient procurement and contract management services for DND,” says Chris Davis, manager, contract services, Ontario Region.

THE PROJECTS Sixty-five per cent of DCC’s construc-tion work is related to infrastructure renewal and expansion. DCC handles a huge variety of projects, including sewers, dams, roads, runways, parking facilities, roofing, heritage structure rehabilitation, jetties, hangars, hospi-tals, housing — and they’ve even built a centrifuge. One of DCC’s largest projects is the $250-million overhaul of the Fleet Maintenance Facility (FMF) Cape Breton Shop at CFB Esquimalt. At the same time it also deals in pro-jects in the $10,000 to $50,000 range, such as kitchen renovations for DND housing facilities.

Under the Canada First Defence Strategy, DND is replacing or refur-bishing 25 per cent of its existing infrastructure over 10 years, and half of all infrastructure over the next 20 years. Davis says that DND construc-tion program spending has gradually increased to approximately $600 million annually and the department is increasingly turning to DCC to provide services beyond construction contract management.

Davis notes that a lot of construction


Chris Davis, Manager, Contract Services, Ontario Region gives an audience at the TCA an insider’s look at working with DCC


spending is “locked in” — in other words, it will survive a possible change in government. As an example he cites the construction of a large mainten-ance hangar at CFB Trenton for newly purchased C-17 Globemaster transport aircraft. The project runs well into the tens of millions of dollars, and the hangars will still be needed regardless of which party is in power in Ottawa.

PROJECT FORMATDCC manages procurement projects according to client requirements, whether quick-response tenders, tender board, design-build projects or source lists for professional services, to mention a few. Most construction projects are tendered as a lump sum or total tender price with the occasional project done through design-build.

DOCuMENTATIONDCC has its own set of Standard Con-struction Contract Documents. They are similar in some respects to the CCDC documents, but are specific to federal government requirements. The same form is used for regular tenders, tender boards and quick-response tenders.

PREQuALIFICATION For projects where prequalification is required, DCC evaluates firms for the experience and resources to complete the work. “We usually don’t focus entirely on financial capacity, other than past experience based on a general value of similar projects,” Davis says. “Some prequalifications are pass-fail, so having the minimum requirements and providing sup-porting documents is critical. Others may be based on rated criteria, so identifying experience and resources is important for us in evaluating a submission.”

Typically only general contractors are prequalified, but on some occa-sions sub-trades have been included in a prequalification. Architects and engineers are selected for source lists primarily on qualifications depending

on the nature of the requirement. A prequalified bidders list is only

used in the event of a quick-response tender for construction projects less than $100,000. Generally lists are refreshed every year. Among other tools, DCC uses SELECT, a PWGSC database list of registered suppliers, to access professional consultants for con-tracts up to $100,000. Opportunities are rotated among the participants.

BONDINgOn construction projects bid security and contract security are required, based on the advertised value of the project. Typically security is required on any project with an advertised value over $100,000. Bonding is just one type of security that is accepted.

DCC stipulates that contractors obtain commercial general liability insurance: either $5 million minimum or $1 million with a $4 million umbrella liability policy.

DCC bid and contract security requirements can vary depending on the type and value of the pro-ject. However, typically performance bonds, labour and material payment bonds, and bid bonds are the norm on projects that require security.

BIDDINgRegular tenders are used for more complex construction projects involv-ing multiple trades. The tender board approach is generally used for single-trade and less complex projects and quick response tenders are generally applied to small, simple projects, under $100,000 using approved QRT source lists for various trades.

The DCC monitors time to award on all of its projects against specified tar-gets for each project type. The target for a regular tender contract award is 35 days, for a tender board award 25 days, for a quick-response tender award 14 days, and for a design-build award 120 days.

The average number of bidders

per project is approximately four. It’s slightly lower for smaller projects under $500,000 and slightly higher on the larger projects. “Over the years we’ve seen fluctuation in the average number of bidders,” Davis says. “It seems to change with how busy indus-try is. The busier the industry, the fewer bids.” On average there is a 20 per cent increase in new contractors each year.

PAyMENTDCC does not actually issue pay-ment itself. It reviews and approves payment in the Government of Canada’s payment system, which has its own checks and balances.

There are no penalty clauses. DCC’s standard documents contain the provision for liquidated damages, and on some projects there are defined damages that will be identified in the project documents.

SPECIAL CIRCuMSTANCESDCC specifications focus on the per-formance of the required equipment or system, without identifying specific manufacturers or suppliers. However, it is acceptable to identify multiple manufacturers or suppliers. In some instances, there is a requirement to “sole source” some equipment or systems, as it must connect or work with an existing proprietary piece of equip-ment or system. In these cases, the sole source requirement is clearly identified.

Specific dispute resolution processes are not included in contracts but DCC is open to any and all forms of DR typ-ically accepted by the industry. In the past, DCC has successfully employed alternative dispute resolution mechan-isms including facilitated negotiation, mediation and non-binding and bind-ing arbitration.

As you might expect, security clear-ances are required on some DCC projects. DCC will sponsor firms that don’t have Designated Organization Screening (DOS) or a Facility Security Clearance (FSC) level SECRET so that



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the PWGSC’s Canadian and International Industrial Security Directorate (CIISD) can work on providing the clearance. Documentation and further information on obtaining DOS or FSC clearances for DCC projects is available on the DCC website at www.dcc-cdc.gc.ca.

“We’ve been actively promoting to industry to obtain these clearances,” Davis says. “This requirement has been increasing in the past year.” DCC doesn’t wait for bidders to obtain clearances, so Davis recommends obtaining them well in advance.

FORTHCOMINg wORKDCC expects to spend $500 million over the next five years on infrastructure upgrade programs for CFB Trenton alone, as part of the Canada First Defence Strategy plan to renew and rebuild much of the current defence infrastructure. Other bases in Ontario such as Petawawa, Borden and Kingston will also see an increase in larger projects as their infrastructure is upgraded.

In the coming 18 months, several large projects are anticipated for CFB Trenton. These include the mainten-ance hangar for the new C-17 Globemaster mentioned earlier, the construction of a new air mobility and training centre, the construction of a new electrical/mechanical engineering and transportation garage, the construction of a new refinishing facility for the Aerospace and Telecom-munications Engineering Support Squadron (ATESS), the construction of a training accommodation building, and the construction of a material distribution centre.

NOTESThe DCC website is at www.dcc-cdc.gc.ca. Firms can contact the DCC site office in their area, or go to any base where they’re interested in bidding on projects. Contact informa-tion is available on the DCC website, in the blue pages of the phone book or in online phone directories.

INFRASTRuCTuRE ONTARIOORgANIZATIONInfrastructure Ontario (IO) is a Crown agency of the Ontario government, reporting to the Minister of Energy and Infrastructure. It is responsible for renewing the province’s public assets, and is now examining the possibility of handling transportation and transit sector work in addi-tion to its regular schedule of healthcare, courthouse and detention facility projects.

THE PROJECTS IO projects range from $35 million to as much as $500 to $600 million in capital construction dollars. Some now on the horizon may go as high as $750 million.

“Most projects are in the $30 million to $500 million range,” says Derrick Toigo, vice president of project delivery. “There’s a lot in the $100 to $200 million range, and from $50 to $100 million.”

On transportation projects, the Ministry of Transportation will be co-sponsor with IO, which will utilize its expertise in developing the required information when the projects are put to market.

As this went to press, Infrastructure Ontario had 28 projects under construction.

PROJECT FORMATInfrastructure Ontario employs two project types: design-build and design-build-finance-maintain. On design-build projects IO issues an RFQ, and then evaluates and selects three proponent teams to participate in the RFP process.

“The designers for the proponents take the performance specifications we develop through our own planning and design compliance teams,” Toigo says. “They submit through



our RFP process, and engage with each proponent team to assist with compliance.”

The responses are evaluated based on a 50/50 weighting on technical and financial merits. The winning propon-ent carries on the design process and is responsible for operations.

Infrastructure Ontario also has a tranche of build-finance projects. These are essentially projects that IO receives after the design phase has been completed. IO takes them out to market again to obtain bids. The win-ning bidder will complete any minor design finalization that remains to be done, and finances the project for the term of construction.

Infrastructure Ontario does some project management through third parties, primarily as a result of the fact that it offers financing on small projects for municipalities. It also gets called in by third parties it has loaned money to, to help keep projects on track. “It’s primarily for municipalities so far,” Toigo says. “We’re considering doing this for the Ministry of Municipal Affairs and Housing too.”

DOCuMENTATIONInfrastructure Ontario has developed its own documents, including base contracts and project agreements, using elements of CCDC documenta-tion. Discussions with the construction industry have also guided develop-ment. “Our documentation deals with all the contractual elements you’d see in a CCDC document, but it’s much more detailed and, we think, fairly balanced between the needs of the developers and the province.”

RFQ documentation encompasses CCDC 11 but with enough additional detail that responses are “almost like a mini RFP,” Toigo says. The document looks at a proponent’s construction quality, but also at expertise in par-ticular types of development, ability to procure the required bonding, the key individuals involved and more.

RFP documentation contains some eight schedules that require informa-tion related to design, construction, financing and operations.

All documents are available at www.infrastructureontario.ca.

PREQuALIFICATION Prequalification is done project by project because every project is unique, and blanket prequalification isn’t feas-ible. It’s a formal two-part submission process. The first part covers standard information. The second covers the scope of the project, looks into the expertise of the development team and the constructor, and also covers financing. To qualify, applicants need to score above 70 per cent in each area.

When an RFQ goes out, Infrastruc-ture Ontario looks at the ability of the development team that heads up a con-sortium to see how they’ve managed projects of a similar size and complexity in the past. IO then checks out the con-tractor for the requisite skills. “We look at who they’ve identified as their subs, mainly mechanical and electrical,” Toigo says. “We don’t go into a massive list of subs, because ultimately the risk of developing a facility belongs with the project company. But we do like to make sure we get a good solid group of contractors working with us.”

IO keeps a vendor of record (VoR) list for other services, such as trans-action advisors, fairness monitors, and — in some cases — for consulting, scheduling management, etc. Listings are refreshed about every two years.

BONDINgInfrastructure Ontario requires proof that project financing is “robust.” This includes the ability to bond, bonding limits and what kind of bonds a proponent can put forward. On build-finance, IO requires 50/50 bonding. “We’re looking at different vehicles such as Subguard,” Toigo says.

If a build-finance project has pro-gressed to the point where the design is

virtually complete and it doesn’t make sense to revert it into a performance-based specification, IO takes the project to the market and the winning proponent will build and finance it. “It’s short term,” Toigo says. “It doesn’t have operational lifecycle tacked to it, and there’s one payment on substantial completion.”

As this went to press, IO was looking at seeking parental guarantees, where the parent company would guarantee five to 10 per cent of their work, much like a line of credit.

BIDDINgWith DBFM projects normally three proponents are selected. Where more than three are selected, the others are kept in reserve in case one of the three primary proponents drops out.

The three work with Infrastructure Ontario through an RFP ‘open period’ of about six months. During this time IO holds commercially confidential meetings with each proponent to help them comply with design, technical and financial requirements. Submis-sions are then evaluated against criteria identified in the RFP document.

Interest in bidding is strong, Toigo says. “We’ve had companies from the U.S. join consortia as constructors. We’ve also had developers from over-seas bid successfully. We have a solid mass of projects underway, and it’s getting more competitive now.”

PAyMENTInfrastructure Ontario makes use of third-party monitors to ensure that the RFP and RFQ processes, as well as pay-ments, are open, fair and transparent. In addition, major consultancies are engaged as transaction advisors to help develop RFP and RFQ documentation.

The build-finance model provides no payment until the project is sub-stantially complete. If the developer or contractor is responsible for a delay, the party that is lending them money will inflict liquidated damages.



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“We’re now very energy-conscious,” Toigo says. “As a result, on DBFM projects we have a ‘pain-share, gain-share’ mechanism: if the developer’s design goes below a certain level of energy efficiency, there’s a penalty on the monthly payment. There are also deductions for non-performance, availability failures, services failures, quality failures — all of which are predefined. A detailed payment mechanism assigns points deductions and monetary penalties for differ-ent events.”

SPECIAL CIRCuMSTANCESThe question of security clearances arises on projects for the Ministry of the Attorney General and the Ministry of Community Safety and Correctional Services. Usually the client ministry is given the names of people working on the facilities and provides the clearances.

IO doesn’t specify materials and products. “What will happen is that we identify performance requirements, depending on the facility and location,” Toigo says. “A hospi-tal intensive care unit may have some specific requirements, and in this case we’d be more prescriptive, but we wouldn’t get into make and manufacturer. We’d issue a requirement that a particular piece of equipment must be operational 24 by seven, must have clean power, or whatever the criteria are, and the designers would come up with a solution.”

For dispute resolution a Schedule 27 is incorporated into every project agreement. “It’s a very robust dispute resolu-tion mechanism, that the proponents have seen and agreed with,” Toigo says. “In many cases we use an escalation ladder with arbitration at the top.” To date the mechanism hasn’t had to be used.

FORTHCOMINg wORKA number of very large projects in the $500 to $750 mil-lion range are on the horizon or in the very early stages, including:• St. Josephs Hamilton Health West — a new campus

devoted to mental illness• HumberRiverRegionalHospital—averylargehospital

in northwest Toronto• Halton Healthcare Services — a massive acute care

hospital in north Oakville

In the $200 to $500 million range:• ThunderBayConsolidatedCourthouse• QuinteConsolidatedCourthouse• St. Josephs Mental Health — facilities in London

and St. ThomasIn addition to the Windsor-Essex Parkway and the

Highway 407 extension, Toigo says that all of the above projects should be out for bid late in the fourth quarter of this year or early 2010. IO transit work is still in its

infancy, but he says that some subway station work may go to Infrastructure Ontario depending on the outcome of discussions with the TTC.

NOTES“We have another tranche of health care, courthouses, detention and other facilities on the books now,” Toigo says. “We’re waiting for the Ministry of Energy and Infrastructure and others to assign them to us. We’ll be starting the processes next year.”

ONTARIO REALTy CORPORATION

ORgANIZATIONThe Ontario Realty Corporation provides customer-focused real estate services to the Ontario government, including strategic portfolio management, asset management, property and land management and capital projects. The ORC is accountable to the Ontario Minister of Energy and Infrastructure.

The ORC manages approximately 6,500 buildings and structures, over 100,000 acres of land and about 50 million square feet of space both owned and leased across the



province. The portfolio includes a wide variety of properties ranging from detention centres to office space, courthouses and heritage buildings.

THE PROJECTS ORC undertakes a broad array of construction projects, most of which are related to renovation, renewal and expansion of existing buildings, as well as some new building construction. ORC typically undertakes about 2,000 projects a year, and made over $400 million of project expenditures in 2008.

Ontario’s trade agreements require that ORC publicly tender services, consulting and construction related procurements with a procurement value in excess of $100,000. Mike Greidanus, Senior Vice President, project services, cites the 80/20 rule: 80 per cent of ORC projects come in at under $200,000 while the majority of spending is accounted for the larger projects that make up the other fifth.

“We do a wide variety of work,” Gre-idanus says. “For a client like Service Ontario, the work typically relates to rollouts of interiors in a retail setting. The Ministry of the Attorney General has a lot of specialized courts work,

and Ministry of Community Safety and Correctional Services projects relate to detention centres.” ORC also does remote projects, like building or upgrading fire stations in Ontario’s north for the Ministry of Natural Resources. But the bread and butter is the more industry-norm work on office space and data centres.

PROJECT FORMATORC’s primary method of construction procurement is stipulated-sum design-bid-build. It also uses the construction management and design-build models. Construction management is favoured where design and construction are happening concurrently and have to be kept moving. Greidanus says that the $100-million retrofit of the former Sears Canada building at 222 Jarvis St. is a good example, as the project involves a lot of base building infrastructure work and simultaneously designing and finalizing the space for the “tenants” — Ministry clients.

“We’ll do design-build more for where a project is relatively easy to design, something that’s commonly built in the marketplace like a ware-house or small office space, where we

can use a performance specification and the project can be turnkey when it’s completed,” Greidanus says.

DOCuMENTATIONORC has introduced a new project delivery model in collaboration with the industry, working with the Ontario General Contractors’ Association (OGCA), Consulting Engineers of Ontario (CEO), the Ontario Asso-ciation of Architects (OAA) and Association of Registered Interior Designers of Ontario (ARIDO). The objective is to align with industry standard practices wherever possible. An important part of the new delivery model has been new ORC construction and consulting contracts based on CCDC 2 - 2008 and OAA Document 600 - 2008 (“Ontario Association of Architects Standard Form of Contract for Architect’s Services”).

ORC uses a standard set of supple-mentary conditions for construction contractors that have been endorsed by the Ontario General Contractors’ Asso-ciation (OGCA). The supplementary conditions are published on the ORC website at www.ontariorealty.ca. At press time, ORC was running a multi-city road show throughout Ontario to introduce its new business model and go through its supplementary consulting contract and construction contract conditions for an audience of general contractors, trades contractors and construction associations.

PREQuALIFICATION In addition to public tenders, ORC also uses vendor of record and/or source lists in procuring both goods, services, consulting and construc-tion related procurements. Potential vendors can pre-qualify in order to be on these lists. ORC’s prequalifica-tion standards for construction are also posted at www.ontariorealty.ca. Prequalification results in qualifying firms being added to ORC’s bid list for future opportunities. The


Mike greidanus, Senior Vice President, Project Services, presents ORC’s new business model to a Toronto audience in September


list can be applied to at any time.Prequalification criteria include

demonstration of experience relevant to the work being sought, basic insur-ance, surety and financial information, health and safety policy information as well as the background, experience and expertise of the key contact who will be working with ORC.

ORC qualifies firms for specific geographic areas, types of work and values of work. “We ask contractors to select a specialty of the type of work that they want to do for us,” Greidanus says. “If you don’t want courts work, you leave the relevant box unchecked. If you only want office work, tick only that box.”

Prequalification has been going well, with lots of applicants and a high success rate. “We’re trying to make sure that we’re open for business with con-tractors and consultants, and the road shows have been a good orientation.”

Bids are procured project by project to the prequalified list. As selection criteria are customized to the project being undertaken, qualified bidders may be asked for additional qualifica-tions on subsequent bids.

For construction management work, the first step for the selected construction manager is an open prequalification for interested trade contractors that can then bid on subse-quent packages. ORC oversees this to ensure fairness and transparency.

For stipulated sum bids, ORC does not prequalify subcontractors to the general contractor or prime trades contractor being engaged. However, ORC will have open prequalifying of subcontractors (the ORC uses the term “trades contractor” to refer to subcon-tractors) sometime around November for bid opportunities on projects where no general contractor is required. The kinds of work covered will include HVAC, roofing, grounds work and electrical. The ORC’s website will lay out the conditions for responding.

“Doing all the prequalification even for project management companies is one big change at ORC,” Greidanus says. “Management companies have been asking about the amount of work we do where no general contractor is required. I don’t know the exact breakdown, but the nature of the work would suggest there’s a lot.”

ORC prequalifies architects and engineers in much the same way as con-tractors. The prequalification standards are posted at www.ontariorealty.ca. The resulting prequalified architects and engineers bid list is used for tendering work.

BONDINgBid bonding is determined on a case by case basis, with the decision typically made at the project level. The usual requirement is 50 per cent labour and material and 100 per cent perform-ance bonding.

BIDDINgGreidanus preferred not to give fig-ures, as the number of bidders on jobs varies greatly from city to city and in accordance with economic conditions.

PAyMENTTypically the prime consultants — those engaged to do the project — certify payment prior to making payment to contractors.

SPECIAL CIRCuMSTANCESWhen it comes to security clearances, ORC works with the client ministry on each project to obtain the required level. Since the Ontario Provincial Police (OPP) are an ORC client, on their projects the CPIC is the standard security clearance. The Ministry of the Attorney General usually has fairly strict clearance requirements.

“In general there is a base level of security clearance that the Ministry of Government Services is reviewing now,” Greidanus says. “We will comply with that as we get instruction from our client ministries.”

ORC doesn’t usually specify products and materials: with a preponderance of renovation work, compatibility with materials and systems already in place tends to determine what can and can’t be used.

For dispute resolution, ORC employs negotiation, OGCA-supported dispute resolution, mediation and litigation. ORC contract documents have provi-sions for arbitration. “Typically any dispute stops at my desk,” Greidanus says. “Most are resolved through col-laboration and conversation.” In a few cases ORC has brought in OGCA with very positive results.

FORTHCOMINg wORKAs this went to press, ORC was deter-mining whether to go construction management or lump-sum bid on a major retrofit and tenant improvement of an 11-storey commercial building at 77 Grenville St. in Toronto. The build-ing will be occupied by government and non-government tenants, and the work will be completed to a minimum LEED Silver standard.

In general, ORC has a ‘push’ model with project opportunities: once a firm prequalifies, notification of bid opportunities that meet the work specialization(s) it indicated in prequalifying will be directed to it.

NOTES While ORC relies on private-sector project management for most of its construction projects, it also maintains a small team of project management staff for the delivery of highly complex and sensitive projects.

THE TORONTO TRANSIT COMMISSION

ORgANIZATIONThe Toronto Transit Commission is owned and operated by the City of Toronto. It is the third largest public transit system in North America,



servicing 4.5 million people in the GTA. It is committed to a robust subway and light rail expansion plan, and expects to carry an additional 175 million riders by 2021.

THE PROJECTS TTC’s Materials and Procurement Department procures all engineering consultants and contractors for the cap-ital program, as well as all revenue and non revenue vehicles and major engin-eered equipment. Projects range from small renovation contracts to multimil-lion-dollar tunnel and station contracts.

The construction contract for a station modification can be up to two years, and cost $70 to $80 million, says Jim Lee, Chief, Project Procurement in the Materials and Procurement Department. An entirely new station, such as the TTC is building on the Toronto-York subway extension, can be $300 million or more, and take two and a half to three years to build. On the smaller end of the scale are bus hangars and resurfacing projects in the hun-dreds of thousands of dollars, and such items as building appraisal services, or pre-fab components for construction site offices, at $10,000 to $20,000.

PROJECT FORMATThe standard TTC model is lump-sum design-bid-build, but Lee says the TTC is “dabbling” in design-build and design-build-finance. It has had to do so as its funding relationship with Metrolinx becomes tighter, because Metrolinx is a design-build proponent. At press time, TTC had tried out design-build on roadway work in a somewhat modified form, and Lee says more can be expected in future.

“Design-build requires quality to be built in up-front,” Lee says. “I antici-pate that scope creep late in the project cycle could be a problem, as operations people add last-minute changes that aren’t necessarily required. So educa-tion will be a priority for us.”

On very large projects like the

building of the Sheppard subway line and the extension of the Spadina subway, the TTC sets up separate dedicated departments with a mix of TTC staff and hired project managers, consultants, etc. These departments have some discretion when it comes to things like prequalifying subcon-tractors (see below), but still operate within TTC materials and procure-ment procedures.

DOCuMENTATIONThe TTC has its own standard con-tract documents that were originally developed using CCDC documents as a base. It is currently reviewing all those master documents using the new CCDC 2 as the base. The TTC has formed a task force to compare its documents with CCDC 2 with a view to making TTC documents more contractor-friendly.

The TTC has its own prequalifica-tion and tender documents, which it continues to adapt based on project requirements. “We want to head in a more detailed direction in future,” Lee says. “Safety is likely to be one area that gets more coverage.”

Indemnifications and liabilities are a huge factor for the TTC and one point where they differ from the industry norm. It’s a very risk-averse organiza-tion, and Lee says that they are trying to assign risk more logically and not simply trying to transfer it outside the four walls, a practice that has scared bidders off in the past.

“I want our documents to reflect what’s needed and only enforce those things, instead of jamming in every imaginable requirement and then going easy on enforcing it,” Lee says. In other words, look for continued strictness in terms and conditions, but a fairer distribution of responsibility.

PREQuALIFICATION The TTC maintains a bidders’ list primarily for specific requirements and purchases of less than $60,000.

Companies are required to complete and submit a company questionnaire to be added to the list. However, one major exception is any require-ment under $60,000 for construction, construction services, engineering/architectural services, engineered equipment, revenue vehicles and non-revenue vehicles. These may be advertised publicly.

“We prequalify contractors generally for the larger projects,” Lee says. “We’re looking for contractors that can demonstrate through a list of submis-sions that they have the financial capacity to handle the work, sufficient resources to manage it, and can demonstrate successful completion of work of a similar size and nature. Lack of any of the above could adversely impact success.” Five or six samples of previous work of a similar size and nature will be enough – and in any case there isn’t room on the form for much more than that.

The TTC has prequalified sub-contractors on projects such as the Sheppard subway line, where a separ-ate group set up to manage the work prequalified some subs for dewatering, underground services, and major mechanical and electrical work. “This impacts the flexibility of the generals to work with people they have relationships with,” Lee says. “If they have problems with a sub it comes back on us, since we told them who to work with. I’d rather have the generals responsible for their subs.”

Nonetheless, a separate group is being established to handle the Spadina extension, and Lee says they’ll likely want to prequalify subs too.

As for prequalifying architects and/or engineers, “in a design-bid-build environment we retain the engineer-ing consultant,” Lee says. “We follow a quality-based selection process.”

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The possible use of Subguard came up in a recent bonding discussion, Lee says, but so far the TTC hasn’t used it.

BIDDINgThe number of bidders varies. For engineering consultancy bids there are routinely 12 to 15 submissions. For small general contracts there are usu-ally eight to 10, and for the very large projects three to five. “We always encour-age more participation,” Lee says.

PAyMENTPayment is based on monthly per-formance draws. “When you say ‘no payment until completion’ all you’ve done is pass the burden of financing on to the companies,” Lee says. Some-times that’s a good thing, sometimes not, he adds. “A lot prefer a neutral cash flow, getting paid as they do the work. The bonds are there to protect you when you pay those. If we didn’t do performance draws we might not have bonds at all.”

The TTC processes all payments on invoices from the contractors or consultants based on work performed and verified by staff.

SPECIAL CIRCuMSTANCESThe TTC has used CPIC security clearances for work on high-security buildings. It doesn’t ask for security clear-ances on everything but does reserve the right to do so.

The TTC employs a blend of pre-scriptive and performance equipment and materials specifications depending on project requirements. “We suggest suppliers for some products, and if we have a safety-critical application we’ll only accept certain proven products,” Lee says. “We can also sole source if there is a demonstrated benefit.”

The TTC has used dispute resolution in the past but that isn’t part of their standard contracts.

The TTC typically has liquidated damages.

FORTHCOMINg wORKAt press time Lee was working on a list of forthcoming projects to present to TCA members in the fall, but didn’t have anything available to discuss. “We have three or four construction groups working on packages, and we’ll have a list and anticipated tendering dates for the presentation.”

Lee did say that the TTC was prequalifying contractors for the Union Station renovation at press time. He anticipated prequalification for station work on the Spadina exten-sion in the spring, but stressed that the timing could easily change.

NOTES The TTC receives a number of tenders/proposals that are either not properly completed or missing mandatory submission information (these are usually submission requirements that are supposed to be submitted with the tender/proposal). Failure to prop-erly complete a tender/proposal or provide mandatory tender/proposal submission information can render a tender/proposal non-compliant and/or unacceptable.

As this went to press, the TTC was in the process of revamping its materials and procurement website at www2.ttc.ca/html/frameset.htm

wATERFRONT TORONTO

ORgANIZATIONIn 2000 the Government of Canada, the Province of Ontario, and the City of Toronto announced joint support for the creation of Waterfront Toronto to lead renewal of the city’s waterfront. Waterfront Toronto is governed by a Board of Directors appointed by the federal and provincial govern-ments and the City of Toronto. Its objectives are to develop accessible new waterfront communities, attract

knowledge-based industries to the Toronto Port Lands, engage the community in revitalization and develop strategic partnerships to attract private-sector investment.

THE PROJECTS Waterfront Toronto does a lot of the ‘detailing’ that needs to be done along the city’s waterfront, which means that it handles a lot of projects in the range of a few million dollars. At the other end of the scale are large projects that run up to $100 to $150 million.

“We work on public infrastructure — utilities, municipal services, public realm spaces and services like roads, sidewalks, lighting, etc.,” says David Kusturin, Vice President of program management. “Through what we call ‘eligible recipients’ we get into some other types of work.” Eligible recipients are other agencies that act as project managers. Waterfront Toronto funds and reviews the projects, but the eligible



recipients issue the tenders. Examples include the Toronto Transit Commis-sion’s expansion of Union Station, and Toronto Economic Development Corporation (TEDCO) work on the Corus Entertainment headquarters and Pinewood Toronto Studios.

The areas where Waterfront Toronto operates are split into different ‘pre-cincts,’ such as the East Bayfront, West Don Lands, Lower Don Lands, and Port Lands. Other work includes six parks and public realm projects, a further category that includes environ-mental assessments, an archaeological conservation and management strat-egy and a plan to support and facilitate marine uses and users.

PROJECT FORMAT“We have some strict federal, provincial and municipal procurement guide-lines,” Kusturin says. Any procurement worth over $1 million has to be publicly posted, but Waterfront Toronto may also post projects starting at $75,000 where construction or consulting is involved.

Until recently most projects were conducted on the lump-sum model. Waterfront Toronto is now branching into construction management, and awarded its first CM contract to Eastern Construction in the East Bayfront precinct in the summer of this year.

Design-build and design-build-finance are rarely used, although these models might be employed as required on specific projects. Kusturin says that projects such as the District Energy Centre in the West Don Lands could go in this direction as appropriate.

The consortium approach isn’t used, “although part of what we are doing is preparing the precincts for redevelop-ment,” Kusturin says. “We put in parks and roads so we can essentially sell the properties for condominium or com-mercial development.” At press time Waterfront Toronto was preparing to issue a potentially large RFP for its East Bayfront precinct to a number of

prequalified development companies. “They will in fact have to be financing and building those projects, as we don’t build. We prepare the land for the builders to come in and do that.”

DOCuMENTATIONWaterfront Toronto’s base contract, a CCDC 2 document with supplemen-taries, has only begun to be used. The agency has created a construction management agreement that serves as a master consulting agreement for CM services. From that starting point, Waterfront Toronto uses the CCDC 2 documentation to enter into lump-sum contracts for each component that the construction manager is building on its behalf.

“An example is Eastern Construc-tion, which is building the Canada Sugar Beach park in the East Bayfront,” says Kusturin. “We’re awarding that contract under a CCDC 2 lump sum agreement, but Eastern is providing construction management services under a CM agreement.”

Proposal and tender templates have been created by Waterfront Toronto’s own procurement staff. “We use speci-fications, drawings and so on that our consultants prepare for construction, but they’re attached to our own tender forms,” Kusturin says.

While supplementary documenta-tion covers topics such as insurance, indemnities and dispute resolution, some of the terms and conditions that are unique to Waterfront Toronto are fairly uniform across the full spectrum of what the agency does. “As a quasi-government owner it’s typical that we have provisions, terms and conditions that our federal, provincial and municipal funding owners require us to pass down to contractors,” says Kusturin. “We build these into the agreements we’re signing and they’re pretty standard.”

PREQuALIFICATION The prequalification process is varied.

Typically Waterfront Toronto prequali-fies for every project. “We’ll put out a public prequalification,” Kusturin says. “Essentially anyone’s invited to reply to that, but we look for companies that have the financial wherewithal, the staff, the local resources and knowledge and a background in delivering the type of work at the values that we’re providing.”

There are no pre-set prequalification thresholds. Every project has its own unique requirements, with significant differences based on project size. “For the East Bayfront, where Eastern is the construction manager, they’re doing the project prequalifications following our procurement rules – for example the requirement to post publicly any-thing over $1 million,” says Kusturin.

As a rule, Waterfront Toronto prequalifies general contractors only. “We don’t act as a constructor,” Kus-turin says. “We don’t participate in the project or manage on site or anything like that. We’re looking for construc-tion managers or general contractors to manage on our behalf.”

Kusturin says most of the architects and engineers Waterfront Toronto uses were on board before he assumed his current role a year ago, and that they were largely selected through competitions based on their design response to a certain problem or issue.

“We do have vendors of record for engineering and consulting services,” Kusturin says. “Every three years we ask for consultants to provide pricing and services to act as a vendor of record. Based on the responses we’ll select three or four consultants and go out to them on a competitive basis to get pricing and quotes. It’s easier than going out on a fully public basis for each and every project.” There aren’t a lot of architects used simply because Waterfront Toronto doesn’t do a lot of buildings.

BONDINgFor specific projects Waterfront Toronto requires a bid bond, but it’s



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linked to project risk and complexity and isn’t a general practice; however, 50 per cent performance and 50 per cent labour and materials bonds are standard.

Some larger contractors offer Subguard as an alternative to bonding. “It makes it easier for construction companies to replace a defaulted subtrade,” Kusturin says. “It’s more economical than labour and materials bonds and perform-ance bonds.” The only issue is that any subs enrolled need to be qualified, and this requirement may reduce the number of subtrades that can be prequalified.

BIDDINgOnce prequalification information has been reviewed Waterfront Toronto selects five or six bidders. “We generally don’t go too much beyond six,” Kusturin says. “Sometimes with public tenders we’ve gotten 10 or 15 but generally we try to prequalify five or six to make sure we’ll get at least three or four solid bids.”

Waterfront Toronto is generally successful in getting its preferred minimum of three bidders per project, but the number of bidders can vary. For some of the more specific or unique procurements there may be only one or two, and Waterfront Toronto may have to go ahead and award on that basis.

“If we’re going to short-list and go out to a prequalified list of bidders, we typically won’t get more than six because there are lots of firms out there that don’t want to compete with that many,” Kusturin says.

PAyMENTThe prime consultants on Waterfront Toronto projects do contract administration, which includes certifying payments. The agency does not use independent third parties for payment certification.

SPECIAL CIRCuMSTANCESDispute resolution requirements are covered in supple-mentary documentation. Escalation starts with the project manager, moves up to Kusturin and then to the CEO. After that, arbitration takes place under the Arbitration Act of Ontario.

Penalty clauses aren’t used. “We don’t have liquidated damages,” Kusturin says. “We’re not in an operating revenue position, so a delay wouldn’t tend to cost us. By the same token, we don’t look at bonusing either. We expect the contractor to work to the schedule they provide and we manage them to that.”

Kusturin says that security clearances don’t apply to Waterfront Toronto projects.

FORTHCOMINg wORKAt press time the tender for the TTC’s Union Station expan-sion was about to be issued, and Eastern Construction was

preparing to issue tenders for the balance of public-realm work for two parks in the East Bayfront precinct. Mill St. public realm projects and the Don River Park in the West Don Lands were slated to go to tender in November. The Toronto Community Housing Corporation plans an apart-ment complex in the West Don Lands, which should go to tender by next spring.

“Farther out we have about $700 million worth of projects,” Kusturin says. “Some of them we’re still doing the timing on.” The City is looking at developing a sports complex in the Port Lands, with construction due to start by the middle of 2010.

Toronto’s bid for the 2015 Pan Am Games is also a big factor, as the West Don Lands precinct will house the athletes’ village. “If the bid comes through we’ll be accelerating work on roads and new buildings over the next five years,” Kusturin says.

Other plans include various environmental assessments, and studies for the removal/repair of the Gardiner Express-way west of Jarvis St. |BD



MAyBE IT wAS INEVITABLE THAT INFRASTRuCTuRE stimulus spending would become a political football. All the ingredients are there: three levels of government eager to show they’re doing as much as possible to get the economy moving again, regional tensions, billions of dollars pouring into the economy through a diverse array of channels, and a mix of terms and conditions.

DOLLARS IN DISPuTE With billions of dollars up for grabs, some pushing and shoving in the queue has to be expected

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But it started amicably enough. When the federal government budget in January introduced around $12 billion in infrastructure spending — including a $4-billion Infrastructure Stimulus Fund (ISF), $2 billion for colleges and universities, and $1 billion for sustainable energy infrastructure — the Association of Municipalities of Ontario welcomed the investment as “an important boost to the economy and job creation.”

The terms of the ISF stipulated that projects had to be shovel-ready, in need of funding in order to get under way, and substantially complete by March 31, 2011. The federal government’s contribution was to be one-third of project cost, with provincial governments and municipal/regional governments each funding another third.

Originally the federal government said that if a project failed to be completed by the 2011 deadline, it would claw back its contribution. This condition was later relaxed by Federal Transport and Infrastructure Minister John Baird; speaking at the June meeting of the Federation of Canadian Municipalities (FCM), Baird withdrew the clawback and said federal funding would simply not be extended beyond the deadline on projects that were not completed on time.

The FCM welcomed the relaxation of the clawback as a sign of “co-operation and flexibility” and also welcomed the fact that projects could move ahead without additional federal approvals once funding was committed.

“The clawback would have been a killer,” says Lloyd Russell, Commissioner of Finance for York Region. “You can imagine getting a project 90 or 95 per cent completed by the deadline, and then having the federal government ask for its contribution back. So we were very pleased when Minister Baird made that announcement.”

So far so good. That’s why the complaint by several GTA regional and municipal governments in August that they were still waiting for funding commitments under the ISF rang a distinctly sour note. In a Toronto Star story dated August 14, a number of GTA regional and municipal governments said that they were still waiting for formal

contribution agreements from the Ontario provincial gov-ernment, which is responsible for distributing the federal funding, in addition to its own one-third contribution.

The Star story suggested that infrastructure projects were being held up because federal funds had not been handed over by the province, which is responsible for distributing the cash. The article said that York, Halton, Durham and Peel regions and the municipalities of Mississauga, Brampton, Markham, Richmond Hill, Oakville and Whitby were “in limbo” as they awaited funding to get their projects going.

The “in limbo” description draws a chuckle from Bruce Carr, Mississauga’s Director of Strategic Planning. “That isn’t the interview I gave,” Carr says. “We said that we were going ahead with our projects. We get directions from city council to take our funding partners at their word and get things moving.” Mississauga has a total slate of 132 projects, and when Builders’ Digest spoke to Carr upwards of 40 were under way.

PuTTINg IT ON PAPERThe real issue seems to have been the absence of the explicit funding commitments from the Ontario government. A passage in the Star story quotes Amy Tang, a spokesperson


Under the terms of the ISF funding, third-party staff hired by the city would be covered, while the costs of using the city’s own staff would not


for George Smitherman, Ontario’s Minister of Energy and Infrastructure, as saying that municipalities don’t need signed agreements to get projects rolling. “Municipalities are encour-aged to get started . . . and they will be reimbursed on invoice,” Tang said.

“When this started up, the Fed-eration of Canadian Municipalities misunderstood and thought they were supposed to get some kind of letter of commitment from the federal govern-ment and maybe the province too, before they could start,” says Michael Atkinson, President of the Canadian Construction Association (CCA). But at the same June FCM meeting where he rescinded the federal funding clawback, Minister Baird explained that projects could start immediately.

But the municipalities still wanted to be absolutely clear on the terms of the funding. “Cash on hand wasn’t the issue,” says Russell. “Our issue was that until the end of August we hadn’t seen the funding agreements, which include details around what costs are eligible, what costs aren’t, the timing of the funding, reporting requirements, and even some rules about issuing contracts and so on.”

Those agreements have come through now, Russell says. And it was a relief to find that the municipality can use its own procurement processes, without any changes. “Like most municipalities we have a pretty strict, competitive process,” Russell says.

“That was the biggest reason for the project delays and for not seeing a lot of activity. You don’t like to go out and start a process and then find later on that the rules are different.”

Russell says that one example is project staffing costs. Under the terms of the ISF funding, third-party staff hired by the city would be covered, while the costs of using the city’s own staff would not.

A spokesperson for Brampton also told Builders’ Digest that the city had received its funding commitments from the province at around the same time as Mississauga, and noted that the city had already started work on two major infrastructure projects under the ISF totalling nearly $16 million. “We have the commitments,” he said, “and the projects will be done before the 2011 deadline.”

The $4-billion ISF represents less than 10 per cent of the total federal funding being devoted to infrastructure since the launch of the $37-billion, seven-year Building Canada Fund in 2007. “These other programs by and large don’t require municipalities to provide matching funding,” Atkinson says. “The Gas Tax Fund is the perfect example. That’s a direct transfer to municipalities, and as of April 1 of this year the federal government’s commitment doubled from $1 to $2 billion. That’s forever; there’s no cap on it.”

Another spending initiative, the

Knowledge Infrastructure Program, which provides money to build and renovate college and university facilities, was originally designed to combine contributions from the federal government, the provincial government, the educational institu-tions themselves, and other partners. But Atkinson notes that the Ontario government announced that it would supply the portion assigned to the educational institutions.

“There are an awful lot of projects proceeding with funding from the federal and provincial government,” Atkinson says. “For someone to say money’s not getting out… well, maybe it’s slower than we would like to have seen. But for three levels of government coming together, this is light speed compared to what you usually see.”

Atkinson expects to see more projects coming to tender in the next couple of months. “The real heavy lifting has to be done by provinces and municipalities, which are the contracting agents,” he says.

“We have our agreements from the province,” Carr says. “We’re filling them in and our expectation is that when we sign off on those agreements and have them ratified by Council the money will start to flow. We’re spend-ing money, we’re creating jobs. That’s what this is all about.” |BD


The $4-billion ISF represents less than 10 per cent of the total federal funding being devoted to infrastructure since the launch of the $37-billion, seven-year Building Canada Fund in 2007


Toronto Construction AssociationPublic Sector Construction Project OpportunitiesFor further information please contact Barbara Mirsky at [email protected]

Federal Projects: Public Works & Government Services Canada

Tuesday, Nov. 3, 2009Location: TCASession: 8:30 a.m. to 10:30 a.m.

Colleges and Universities TBA

Municipalities TBA

Construct Canada Wednesday, Dec. 2 to Friday, Dec. 4, 2009

TCA Christmas Lunch Friday, Dec. 4, 2009Location: TCATickets on sale

TCA 142nd Annual Meeting Thursday, Jan. 28, 2010Location: Woodbine Race Track

TCA Gala Dance, Mardi Gras Saturday, Feb. 13, 2010Location: Liberty Grand Entertainment ComplexRegistration and sponsorship info to comeFee: $325

TCA’s 28th Annual Ski Day Friday , Feb. 26, 2010Location: Alpine Ski Club, Collingwood, Ont.Fee (estimated): TCA members $150; non-members $300.00

TCA’s Members’ Day XIV Wednesday, May 12, 2010Registration opens Dec. 1, 2009

For further information please contact Mary Thorburn or Mary McBride. Tel: 416-499-4000, Ext. 114/104 • Fax: 416-499-8752 • Email: [email protected] or [email protected]

Toronto Construction Association, 70 Leek Crescent, Richmond Hill, ON L4B 1H1

Young Construction Executives ClubYCEC Annual Pub Night Thursday, Nov. 5, 2009

Location: Madison Avenue Pub14 Madison Avenue, near Spadina and Bloor, Toronto

YCEC Food Drive Thursday, Nov. 26 to Thurs. Dec. 17, 2009

YCEC Family Skate Day & Hockey Game Powerade Centre, Brampton

Saturday, Jan. 23, 201012:00 p.m. to 1:10 p.m. Family Skate1:20 p.m. to 2:20 p.m. Hockey Game

For further information please contact Lenore Villeneuve at 416-499-4000 ext. 113 or email at [email protected] • www.tcaconnect.com

The Construction Institute of CanadaWorkshop: Understanding the Pitfalls of Tendering Oct. 26, 2009 to Nov. 9, 2009

Mondays 8:30 a.m. to 12:00 p.m.

Workshop: The Leadership Challenge Oct. 28, 2009 to Oct. 30, 20099:00 a.m. to 5:00 p.m.

Seminar: Construction Liens & Trusts Thursday, Nov. 19, 2009

Course: Managing Risk in These Tough Economic Times Jan. 11, 2010 to March 15, 2010

For further information please contact Roxanne Drisdelle at 416-499-4000 ext. 116 or email at [email protected] • www.tcic.ca

uPCOMINg EVENTS


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Permacon .....................................................Outside Back Coverwww.permacon.ca

Builders’Builders’ DigestToronto Construction Association’s Quarterly PerspectiveToronto Construction Association’s Quarterly Perspective Vol. 3 No.2 Quarter 2 2009

POI Business Interiors .....................................Inside Back Coverwww.poi.ca

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Toronto Hydro ............................................................................7www.torontohydro.com

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