November 12, 2012

Naming of subtrades — good or bad?

VINCE VERSACE

managing editor

The naming of subtrades in the bidding process could improve transparency but tackling bid shopping requires a larger effort, a recent wide-ranging discussion by Canadian Construction Association (CCA) directors revealed.

“This is not just a GC (general contractor problem), it is a construction industry problem,” said Les LaRocque, CCA trade contractors council chair, during an open forum discussion at the association’s recent board meeting in Montreal.

The trades’ council is currently developing a CCA policy regarding the naming of subtrades through the development of a best practice policy that the association could use to lobby the federal government.

The policy states that “CCA supports the principle of bidders naming major subcontractors and suppliers in their bids”.

The trades’ council has established a taskforce to explore how the policy should be applied and to develop a discussion paper.

Once the paper is finalized, it will be reviewed by a joint taskforce comprised of members of CCA’s trade contractors, general contractors, manufacturers, suppliers and services and civil infrastructure councils. The joint taskforce will attempt to achieve consensus on how this policy should be applied and address issues such as “the definition of major subtrade, dealing with ‘own forces’ and dealing with ‘own estimate’”, noted a council report.

The naming of subtrades and tackling bid shopping in Canadian construction has been a decades-long issue without a bonafide cure-all solution, many industry stakeholders have stated.

Some general contractors mentioned to the Daily Commercial News, in the past, that the naming of subtrades to prevent bid shopping could hinder a GC’s ability to carry out proper due diligence and ensure subtrades have met the terms of a bid.

On the other hand, some trade contractors have previously told the Daily Commercial News that the naming of trades does not only reduce bid shopping, it can help work get awarded earlier, reduce scheduling conflicts and allows for proper preconstruction planning.

John Schubert, CCA chair, initiated an open discussion by the association’s entire board of directors during its recent main meeting. He hoped the discussion would bring in perspectives from all facets of the industry and the construction bidding cycle. He noted that tackling the bid shopping issue can be considered an education issue, to a degree, for the industry to clear up.

During the Montreal discussion, one general contractor firmly stated that what a GC really has to do “is a draw line” and simply not accept bids beyond a stated deadline. Another general contractor said that implementing a system or policy around the naming of subtrades would not be met with opposition but it likely would not stop bid shopping.

Another director noted that “you cannot legislate morality” and that mandating a solution to the problem might not work until general and trade contractors “decide to solve it themselves.”

There should be no reason to accept multiple bids from a subtrade, said one trade contractor who added that the trades have to do the same with their suppliers. All members of the bidding chain have to get through their trust issues in order to truly address the bid shopping problem.

“We can build the most difficult job and schedule it properly but we cannot schedule how to close a bid,” he said.

The CCA trade contractors council noted that many owners across Canada already require the naming of subtrades. Implementation of the policy by the federal government would ensure “it is attuned to the industry’s expectations,” explained the council.

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