Ontario Construction Report staff writer
The Ontario General Contractors Association (OGCA) has issued a letter urging its members not to accept contract pre-qualification conditions requiring the use of third-party verification companies.
The third-party services verify that safety and other regulatory documentation is in place, and construction project owners (including public agencies) which contract with these businesses will generally not accept or invite contractors and sub-trades to bid on work unless they use the services and the correct documentation is in place, according to these services.
See our earlier story on this topic.
“We do not support the requirement being imposed by owners that bidders be pre-qualified on the basis of membership in, or agreement with, these third party companies,” OGCA president Clive Thurston wrote in an Oct. 31 memo to members and stakeholders. “This new requirement on the industry does not, in our opinion, provide added value proportionate to its costs. Moreover, we believe that Ontario’s culture of safety”, of “internal responsibility” and focus on due diligence best promotes the conduct we expect from everyone involved in the construction industry.”
The verification services have expanded from their US home bases, especially within the petrochemical and heavy industry sectors, to Canadian markets. One of the largest, ISNetworld, plans to open a Toronto office in January. The company has won contracts with the Regional Municipality of York and Ontario Power Generation, among others, and is seeking to expand its business In Ontario, Quebec and Atlantic Canada.
The verification services consolidate and validate health, safety and regulatory compliance documentation, removing the administrative and verification challenges from owners, In return, contractors and suppliers purportedly gain access to business opportunities, ensure their compliance with a myriad of rules and regulations, and have a one-stop system to manage their compliance requirements.
However, several members have complained to the OGCA and others about the third party services cost and their impact on administrative costs and client relationships.
In the letter to members, Thurston says that the association supports “a strong auditing system for companies and their safety programs.”
“That is why, we, the IHSA and others invest in and promote training and educational programs such as CoR, that are not just classroom-based but actually reach out to sites,” Thurston wrote. “our on-site audit and verification system s are actually implemented in the field. CoR accreditation, which is a nationally recognized standard, confirms programs and policies are in place and that they are fully implemented. The IHSA accredits that firms have achieved a high level of performance and continue to perform. Infrastructure Ontario, TTC, and Metrolinx, among many others, use COR to pre-qualify their construction procurement.”
Thurston said the third-party services, on the other hand, do not provide “added value to procurement, construction or health and safety as the services they provide are very limited.”
“These companies generally confirm that the contractor has submitted documentation of policies and processes that have been put into place, but not that the contractor has achieved a high standard of health and safety performance or that the written processes and procedures have been implemented.”