March 24, 2009

Ontario General Contractors Association

Onerous bid terms becoming more prevalent, OGCA says

PATRICIA WILLIAMS

staff writer

Onerous bid terms and clauses increasingly are rearing their ugly heads in construction circles — to the mystification of the Ontario General Contractors Association (OGCA).

“For some reason, we’re seeing an unexpected surge in difficult contracts and bidding methods,” says president Clive Thurston. “We’re at a loss to explain why this is happening.”

The association recently issued a bulletin titled “Industry facing unprecedented implementation of onerous bid terms and clauses.”

In an interview, Thurston said OGCA has received more than two dozen complaints from members since Christmas on bidding-related issues.

In the last few weeks, he said, general contractors have qualified tenders on a hospital project in Toronto as well as two projects in York Region as a result of onerous bid terms or clauses.

There are a variety of reasons for qualifying bids, Thurston said. These include issues related to indemnification, bonding or risk transfer.

On two projects, bonding recently was declined because of onerous contract language.

In another case, Thurston said, a municipality demanded that 25 pages of supplementary pricing data be submitted at the time of closing a lump-sum tender.

The city refused to use the standard two-part closing.

“Sometimes, owners want additional material such as the names of subs, alternate prices or unit prices at the time of closing,” Thurston said. “The problem is that subtrade prices generally don’t come in until just before closing.

“That makes it difficult for the general contractor to obtain that information quickly or accurately.”

In that particular case, several bidders did not complete the required forms.

Thurston said the situation has been exacerbated by the fact that some owners are refusing to consult with OGCA on sticky tendering issues. This is in marked contrast, he said, to the spirit of “co-operation and consultation” that has prevailed in recent years.

“We don’t really understand what is driving these buyers of construction to take this attitude,” Thurston said. “We want to resolve these issues amicably and in the best interests of everyone but we can’t do that if people won’t meet with us.”

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