January 2012
In every construction organization, be it large or small, a policy should be established regarding accurate and complete documentation on every project from the pre bid stage of estimating to final project completion. Documentation can take many forms and ideally serves to substantiate what occurred during the life of the project. Revay and Associates is often asked about the nature and extent of documentation that should be kept. Recently Revay was retained by the Ontario General Contractors Association (OGCA) and Ontario Road Builders Association (ORBA) to develop a one day training course on the subject of construction documentation, of which elements are presented in this Revay Report. This course has been accredited by the Canadian Construction Association (CCA) for attendees applying for a Gold Seal Certificate (GSC) designation.
This Revay Report is divided into two parts; the first deals with the importance of project documentation, and the second provides insight into the types of documents that make up a comprehensive project record.
Some of the topics found in the Revay Report include:
Importance of Project Documentation
- Good Project Management
- Contract Close-Out
- Support of Construction Claims
- Record Keeping Protocol
- Types of Project Documentation
To download the Revay Report, click here.
December 21, 2011
Bill Gillan participated in the 'Is the Modified CCDC2 Lumpsum Contract Out of Control?' panel discussion on December 1, 2011 at the Annual Construct Canada Show. He was later featured in the Daily Commercial News and Construction Record, by Patricia Williams on December 21, 2011.
Canadian Construction Documents Committee contracts
Why some construction contractors refuse to bid on government projects
PATRICIA WILLIAMS
A couple of years ago, Bill Gillan of Revay and Associates Ltd. received a call from a senior engineer in a government organization that undertakes tens of millions of dollars of construction work annually. The agency was having problems getting A-list contractors to bid its projects.
“He said, ‘we'd like to have a meeting to discuss that,' ” Gillan recalled. “I said, ‘I don't think we need a meeting; I've read enough of your contracts to understand why the A-listers are not bidding .' Their contracts were just fraught with (onerous) language.”
Gillan, vice-president, central region at Revay, a project management and construction claims services firm, made the comments during a roundtable discussion at Construct Canada on whether the modified CCDC2 lump-sum contract is in fact out of control.
The majority of current construction projects delivered using this standard form of contract document, between an owner and a prime contractor, are subject to significant modifications, a flyer for the session said.
The supplementary general conditions used to modify the general conditions of the CCDC2 document are often longer than the 30 pages of the contract itself.
Gillan, who has assisted facility owners, contractors, subcontractors and their legal counsel in quantifying claims and resolving disputes on a wide range of projects, said the CCDC2 contract itself is a ”well-written document that is remarkably free of the usual legal jargon you see in a lot of contracts.
“In my opinion, it is a fair and balanced document that provides a good framework for the allocation of risk and the management of construction projects,” he said.
“Moreover, I have yet to encounter a situation where construction professionals acting reasonably cannot resolve a dispute, just with recourse to the standard form of contract.”
Yet, many owners feel compelled to amend contracts through the extensive use of supplementary conditions, Gillan said, noting that owners tend to be risk-adverse. But such supplementary conditions are generally viewed in the industry as being disadvantageous to contractors.
“Accordingly, they tend to upset the balance that is inherent in the standard contract,” he said. “And typically, more often than not, they will result in increased friction on a project, probably deterioration in the working relationships and very often, disputes.” In addition, Gillan said, there are “very often” some unintended consequences. These could include reluctance on the part of contractors to bid projects “where the risks are more than the firm wishes to assume.
“In another scenario, contractors may read the contract, understand the risks and decide to incorporate a premium in their bid (to cover the added risks). What happens is that the owner ends up paying for the risks anyway.”
In some situations, Gillan said, general contractors may protect themselves by electing to pass on the cost of those risks to their subcontractors, which “inevitably leads to poorer working relationships on the project and often to multiple claims from trade contractors.” Gillan was part of a panel that also included contractor Anders Persson, senior vice-president and general manager of Aecon Buildings and construction lawyer Glenn Ackerley, a partner in WeirFoulds.
“The situation is way out of control,” said Persson, who cited a number of examples of “crazy” supplementary conditions that he has seen incorporated into contracts.
He said reasons run the gamut from a “risk transfer no matter what” attitude on the part of some owners, the need for cost-certainty-driven solutions to get budgets approved, and a lack of understanding of construction on the part of personnel accustomed to procuring commodities.
There has also been some “leak-through” from the public-private partnerships sector of the industry in terms of some “harsh” supplementary conditions, Persson said, noting that sector's ability to better absorb risk on projects.
Ackerley, whose clients include public and private owners, contractors, subtrades, suppliers and consultants, said, in some cases, owners believe standard contract forms “are lacking in some ways, that there are gaps in the terms and conditions.
“I think to a large extent what is happening with supplementary conditions is that owners are coming up with more and more ways to get around the kinds of problems they have been running into on projects,” he said.
But Ackerley said there is a feeling in the industry “that the pendulum has swung too far, that the terms and conditions added to, or changed by the supplementary conditions to the standard contract form are too onerous.”
Other panelists were architect David Driscoll, a principal in Parkin Architects Ltd. and Franklin Holtforster, president and CEO of MHPM Project Managers Inc.
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Ontario Building Envelope Coucil (OBEC) elects Sandra Burnell as its 2011 - 2012 President, effective November 2nd.
