The ideal construction tendering document: Simple and fair

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Ontario Construction Report staff writer

If you could sum up how to draw up the ideal tender documentation, the advice is to keep it simple and fair.

Clive Thurston, former president of the Ontario General Contractors’ Association (OGCA), and Howard Doucette, an estimator with SmartBuild Construction Solutions, outlined some specific ideas on achieving these standards at a Dec. 4 Buildings Show presentation: Tender Forms and The Tendering Process – What you need to know.

They offered examples of complex, confusing and unbalanced tender documentation that results in problems for both public authorities and contractors. For public agencies, these issues include fewer or no bids (or qualified bids) and higher prices. For contractors, failure to cover the details in the fine print can lead to extreme financial distress – even bankruptcy – when things go wrong.

Doucette observed some of the problems arise when “procurement specialists” take charge of the tender-writing process. These officials may be familiar with ordering office supplies and equipment, but don’t appreciate the specific laws regarding contracting that are unique to the Canadian construction industry, notably the 1981 R v Ron Engineering and Construction (Eastern) Ltd. Supreme court ruling that sets out specific rules for contract tendering.

Unclear and unnecessarily complex tendering documentation, based on incomplete or inaccurate drawings and data, will almost certainly lead to problems, says Doucette.

“You want to have crystal clear documents as much as possible,” he said. “So that you’re going to attract in a competitive environment, those people to the tendering process. So it’s less confusion less wasted time.

“What I have seen traditionally is that everyone is in a hurry. Everybody wants to go up to tender. And so the philosophy seems to be well, we’re 95% complete (and) we’ll just finish it off during the tendering process. If I can give you one word of caution, don’t do it.”

How do you achieve simplicity without wasting time and energy in preparing the documentation?

One approach is to start with the standard CCDC (Canadian Construction Documents Committee) contract documentation forms, Doucette and Thurston said. These documents cover the basics and are designed to be balanced and fair for both owners and contractors.

“I would recommend no addendum within three days of closing, unless it’s very minor. But definitely have a realistic cutoff date for data in the process because it just keeps going back and forth, back and forth, back and forth,” Doucette said.

He also, among other suggestions, recommended that tender authorities keep the numbering of contract documentations consistent, even if things change because of addendums. Otherwise, confusion can happen and mistakes can be made.

Issues like liquidated damagers and cash cost allowances can be troubling especially if there are provisions buried in the addendum that subcontractors, rushing to complete their own quotes, fail to see – leaving the general contractor on the hook if things go wrong.

Thurston put things simple: “Be very careful, because people get lazy. Contracting authorities create a set of supplementaries for one job and then simply transfer the copy to the next project – even though there are fundamental differences between the two jobs.”

He described research undertaken by the Construction and Design Alliance of Ontario (CDAO) that indicates improvements in pre-bid and bid documentation can result in dramatic cost savings once the project is completed.

“The big problem we have to remember is that if you don’t spend the upfront time and money on your project, which is less than 1 per cent of the lifecycle (cost) of your building or structure, you’re going to have problems,” Thurston said. “One of the things that came out in our study was that the $10 item that doesn’t get dealt with at the time of bidding will cost you $100,000.”

‘And some owners are happy to pay that for some reason.  Does it not make sense?  Get the drawings and specifications right before moving forward.”

Thurston said the OGCA will be hosting a half day session about procurement on Jan. 19, 2022.    The discussion will make clear the issues and challenges relating to bidding, tendering and procurement policies in Canada and Ontario.

“It’s a problem we believe covers just about everything, which is why it’s four hours.”  Attendance can be in person or online.

For more information, contact Thurston at clive@thurstoncs.com.

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