November 26, 2012

Infrastructure Ontario adopts project bundling framework

After a series of meetings with key stakeholders from the design and construction sectors, Infrastructure Ontario (IO) has adopted a six-point framework for the bundling of projects.

“This (bundling) has been a sore point for a number of years,” said Clive Thurston, president of the Ontario General Contractors Association (OGCA). “We never really knew what the criteria were, other than to meet certain financial thresholds.”

The framework document was developed as a result of meetings held over a six-month period between IO and a task force chaired by Barry Steinberg, vice-chair of the Construction and Design Alliance of Ontario (CDAO). It was manned by volunteers from the alliance.

The task force was set up after IO convened a meeting with industry stakeholders to discuss issues related to bundling, which has been used on such projects as redevelopment of a series of highway service centres as well as construction of new Ontario Provincial Police detachments in 16 communities.

OGCA, which represents more than 200 general contractors across the province, was actively involved in the meetings. It was represented on the task force by Paul Raboud, vice-chair of Bird Construction.

“The problem with bundling is that it puts projects out of the reach of smaller contractors because they can’t get the financing or the bonding necessary to go after the work,” said Thurston, whose organization is a member of the CDAO.

“That means only the largest companies can go after these (bundled) jobs.”

The recently developed framework has been approved by members of the CDAO, which represents 10 industry associations, as well as other stakeholders.

The document stipulates that IO will employ measures to protect local and other segments of the design and construction sectors, including small and medium-sized firms, when considering bundling of projects.

The government agency could, for example, require proponents responding to request for proposals to set out a strategy for use of local resources “and make that strategy a factor in the selection of the successful proponent.”

IO also could include key performance indicators or other metrics in the contract with the successful proponent to ensure adherence to the strategy that had been proposed.

In addition, the agency could monitor the performance of the successful proponent using key performance indicators or other metrics “and if necessary, take the necessary steps to enforce adherence to the strategy for use of local resources.”

The framework also provides for ongoing dialogue with key stakeholders, giving the industry an opportunity to provide input when bundling is being considered on a project.

When a decision is made to bundle a project, IO has agreed to co-ordinate communication of that decision with the industry through key stakeholders.

“IO has made a commitment to keep the industry in the loop,” Thurston said. “They’ve made a commitment to ongoing consultations and further collaboration with the industry. We think that is a positive step forward.”

That view was reinforced by Kristi Doyle, executive director of the Ontario Association of Architects, also a member of the CDAO. Bundling has been a “huge” issue, given the potential to deprive smaller architectural firms of “bread and butter” projects.

Doyle said construction of the police facilities across the province, a project undertaken by a consortium on a design-build-finance-maintain basis, is a prime example. Typically, those types of facilities would be designed locally.

“This (development of the framework) is a step in the right direction of making the process more open and transparent,” she said. “In the end, we might not always agree with a decision (to bundle a project), but at least now there is a process and an opportunity to provide input before a final decision is made.”

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