What Municipalities and School Boards Should Look for When Hiring General Contractors for Construction Projects

Powering Community Improvement

When you’re looking at submitted bids from general contractors, the temptation is to automatically go for the lowest price. After all, your taxpayers trust you to use their money wisely.

General contractors collect bids from a variety of trade contractors to perform work in everything from masonry to electrical, plumbing and formwork. The prices for the various sub-trade aspects of the project all form parts of the general contractor’s costs. The natural bias is to keep costs as low as possible in order to win the bid.

But the lowest price does not always mean the best value. As many organizations have learned, the lowest price can come with delays, cost overruns, and even safety issues.

• The TTC Spadina extension is going to be late, and taxpayers will end up paying millions more to get it done.
• Calgary’s West LRT final cost was double the original budget.
• A concrete formwork collapse at the Muskrat Falls hydro project in Labrador led to injuries, delays and a public inquiry.

In fact, cost overruns on large projects are a global epidemic, according to recent research, with as many as nine out of ten going over budget.

“While you are accountable to your constituents and taxpayers for responsible spending, you will pay more if it’s not done right the first time,” says Jeff Koller, Executive Director of the Electrical Contractors Association of Ontario.

Here’s a look as some key requirements to add to your procurement process to ensure a successful outcome.

1. An Excellent Safety Record

Accidents cause costly delays and can leave a bad impression in the minds of the public. Any injury (especially fatal ones) are instant fuel for the media, and often necessitate public inquiries. A new construction project should cause excitement and engender hope for the future, not leave questions in the minds of taxpayers about the quality of public oversight.

The ECAO-IBEW team and other unionized contractors had 23% fewer job site injuries, according to an extensive study of more than 40,000 construction firms across Ontario.

Check with the Workplace Safety and Insurance Board about contractor safety records.

2. Quality Workmanship

Proper workmanship pays off in a number of ways.

Firstly, it avoids costs for fixing shoddy workmanship. This can end up costing more than investing in proper workmanship from the outset.

Secondly, it prevents future injuries to the public and to workers who are maintaining and upgrading systems in the future.

Writing in a requirement for code compliance will help protect you from substandard providers.

3. Qualified Electricians with Superior Training

One electrician is the same as the next, right? Unfortunately not.

While all certified electricians go through the apprenticeship process that includes hands-on training and classroom time, only IBEW electricians have access to the specialized upgrade training available at permanent training halls. The IBEW is extremely selective about the apprentices it accepts, and they are more actively mentored throughout their early learning years.

ECAO members are also the only contractors have access to GROUND™ I, a proactive health and safety program based on the new COR™ standards.

Certification is the law. Make sure your procurement policies include a requirement that all electricians are fully certified with the Ontario College of Trades. It’s your responsibility to ensure any general contractors you hire are abiding by the law.

4. Proper Apprenticeship Ratios

Apprentices are the future of our skilled trades. But some contractors use them as cheap disposable labour, and have no intention of mentoring them through to achieving full journeyperson status.

The Ontario College of Trades requires a ratio of one journeyperson to one apprentice on work sites, until you reach a threshold number of journeypersons (you can use the calculator on this page to find your company’s ratio). This ensures apprentices get proper supervision, and work safely and to expected standards.

Ensure your process requires the correct ratios, and ask for proof from all bidders.

5. References You Can Contact

A list of successful project completions must include client names, email addresses and phone numbers. Ensure contacts are bona fide by checking them on municipal or school board websites.

When you call the references, have a list of questions prepared in advance and keep records of answers.

6. Workers Who Will Support Your Community

Many contractors will need to bring in workers from outside the community for large scale projects.

Will these workers be staying in your community’s hotels, eating in your restaurants, and shopping in your stores? Or, will they be bussed in for the start of the work day, and bussed out again as soon as the whistle blows?

Ensure that the construction project pays off for your local businesses by requiring that workers be housed in your community.

7. A Paper Trail That Ensures You’re Not Supporting the Underground Economy

The underground construction economy was worth over $15 billion in lost earnings in Ontario in 2015. These earnings are effectively stolen from the coffers of municipalities and school boards.

To help guard against this, ask your general contractors to supply a prequalified list of subcontractors with their bid.

Check into the necessary CPP and other income tax deductions for payroll for contractors and subcontractors, and compare against the number of employees.

8. A Penalty Clause For Delays and Cost Overruns

Ensure that contractors who deliberately underbid – and then claim additional costs – pay a financial penalty or just don’t get paid.

Many large infrastructure projects, like Ottawa’s LRT expansion, are now including clauses like this.

Look Beyond Cost and Find the Value

When the lowest price bid looks like a bargain, ask where the savings are coming from. This will protect your community from disaster projects that go over expected costs.

You’ll avoid legal entanglements, media spectacles, and ensure you get a new facility that will make your community proud.

Looking to hire a contractor click here. Learn more about IBEW click here.