BCAA-Industry Alert: Procurement Fairness Clause Removed From Many Taxpayer-Funded Construction Projects

BCCA warns the public and contractors of unacceptable levels of risk following the explicit removal of “Contract A” by many public owners. This has not been seen in Alberta, yet, but if you bidding projects in Brtsh Columbia, be aware, and keep an eye peeled for this migrating into our province.

The BC Construction Association (BCCA) has issued a province-wide industry alert following the confirmation of cases of removal of “Contract A” from the procurement process by a growing list of public owners, including some municipalities, school districts, universities, and crown corporations. In the absence of “Contract A”, general contractors and trade contractors should not assume that they will be treated fairly and probably have no legal recourse for being treated unfairly.

In Canadian contract law, “Contract A” ensures fairness, openness and transparency between the owner and each compliant bidder who responds to a procurement call. “Contract A” typically includes terms and conditions such as deadlines, evaluation criteria, privilege clauses and often the requirement for bid security. It serves to protect the legitimate expectations and interests of all parties.

“The removal of “Contract A” is the most significant violation of public sector procurement processes that the construction industry has seen to date. It is a serious concern for industry associations and should be of equal concern to BC taxpayers,” says BCCA President Chris Atchison. “When a public sector owner willfully removes an obligation to act fairly in its dealings with you at the start of a project, you have to ask yourself: do you really want to bid on that project and work with that government entity?“

The absence of “Contract A” undermines the integrity of the procurement process, and may result in:

“Contract A” is a legal convention that was created in 1981 by the Supreme Court of Canada in The Queen (Ont.) v. Ron Engineering. This landmark decision is the cornerstone for fair, open and transparent procurement, providing a mechanism to protect both owners and bidders from unfair practices. It forms the basis of an understanding that all owners have a duty of fairness towards compliant bidders. Through the use of the “Contract A” bidding contract, Ron Engineering has brought certainty to the procurement process.

“Those who actually do the work in the construction industry cannot proceed on the assumption that it is ‘business as usual’, given the deliberate removal of ‘Contract A’ by certain public owners,” says Michael Demers, legal counsel for BCCA. “Before Ron Engineering, procurement was the wild west, where bidders were subject to the misconduct of unscrupulous owners, and owners did not know where they stood legally with bidders. After 40 years of relative clarity in procurement rules, and a legal basis to ensure both owners and bidders followed the rules, it appears some public owners want to take us all back to the old days where they can’t be held to account for their wrongdoings. It’s a sad day for an industry that is already under so much pressure to perform for the benefit of British Columbians.”

BCCA recommends construction firms proceed with extreme caution in the face of the unprecedented implications of the removal of “Contract A”. Contractors are advised to:

“When public sector owners remove “Contract A”, they break the covenant of trust, integrity and transparency that it represents,” says Atchison. “Public sector owners must be held to a higher standard in procurement. We urge public owners to commit to fairness by maintaining “Contract A”. When it comes to the construction projects British Columbians rely on, it’s in the public interest.”

There are over $160B in construction projects currently underway in British Columbia, with another $170B scheduled. Construction contributes 10.3% of BC’s GDP and is the
#1 employer in the province’s goods sector with a workforce of approximately 229,000.

To access the full Industry Alert on “Contract A” removal, visit: https://bit.ly/4eqvXfm

To signal a case of “Contract A” removal by a public owner, access BCCA’s Public Sector Transparency Tip Line at https://bit.ly/BCCATipLine

A webinar on the implications of the removal of “Contract A” will be presented on June 25th, at 10 a.m. To register visit: https://bit.ly/ContractAWebinar

BCCA issues this Industry Alert, in partnership with the Regional Construction Associations, as a service to its members and to industry at large to help educate them on the risks associated with changes in procurement. It is not intended to provide legal advice. All opinions stated in this Industry Alert are those of the BCCA and reflect the publicly stated policies of BCCA.

For more detail and some examples, please see: https://pgaa.ca/wp-content/uploads/2024/06/BCAA-IndustryAlert-Removal-of-Contract-A-2024-06-18.pdf