Forum Replies Created
-
Posts
-
Manal you are very right about the constant war in the middle east driving up fuel cost. I usually do a lot of Air Charter tenders but with the rising fuel prices I noticed operators are not bidding on certain charters because if we are looking for the lowest cost, some operators find it a constraint on their financials therefore fewer aircraft are available for air charter tenders.
In short, the “Lowest Price” model is backfiring because it asks operators to gamble on their own survival. With jet fuel prices being so volatile due to Middle East instability, many operators would rather decline a bid than risk a contract that becomes a financial loss.
I believe the use of Artificial Intelligence (AI) in procurement have its challenges currently and years to come. While it is a transforming tool from a manual, administrative process into a highly data-driven and strategic function. The consideration of fairness and accountability is critical. To reduce biases organization must ensure AI systems do not disadvantage small suppliers or underrepresented groups. Who may not be able submit a well put together proposal as the bidders who are exposed to the AI tools.
Certainly high-risk decisions especially in public tender evaluations must remain subject to human judgment and clear governance structures to ensure accountability and fairness to all.
Three recommendations I would make to an owner who wishes to prevent over-billing:
1. Verification Controls: Instead of blindly approving invoices managers should check the math and ensure every invoice be accompanied by substantiating data (e.g., specific room measurements, sketches, or photos) before it hits the accounts payable desk.
2. Conduct Random Compliance Audit: Due to the fact that both parties ignored the contract terms. This suggests that the people executing the work didn’t understand or care about the legal requirements. At least two months into the contract, the procurement department should audit the files to ensure floor plans are being sent and invoices are formatted correctly. It is much easier to fix an error in process in month two than to let it slide and become a bigger issue in 5 years.
3. Create a Issue escalation log: Argos claimed they over-billed because OCHC didn’t provide floor plans, yet they never complained about it in writing. This “silent non-compliance” created an opening for fraud. Owner should ensure that any deviation from the agreed process should be documented for reference.
To avoid a situation like the OCHC v. Argos case, an owner needs to focus on closing the gap between what is written in the contract and what happens on the job site.
Agree with your point to mitigate the damage too Mantario Housing should as the error was realized correct the issue via addendum, or when the tender is closed they should have conducted a debriefing and admitted to the error. If the winner changes they could negotiate a settlement or conduct a reevaluation.
Instructor Note
I am inserting this comment into several posts to emphasize careful use of terminology.
Using the term Tender while conducting a RFP process can create a legal pathway to Contract A repercussions.
It happens easily so use caution. Debriefs are not where you want to resolve something like this as they have a different purpose.
Conducting a re-evaluation consistent with the RFP language and recognizing the principle of “duty of fairness” is critical as a public Buyer and organization.
Ironically, that “duty” obligation was itself, part of a Contract A landmark court decision that forms foundation of procurement law in Canada.Both the bidder and Mantario must follow the RFP rules, by using 900 units for evaluation instead of the 475 units dictated by the inspection frequency, Mantario was in breached the duty of fairness.
The likely consequence Since E.G. Spence filed a complaint under the Canadian Free Trade Agreement (CFTA) could be to:
1. Cancellation of Award: If the re-evaluation changes the winner, the tribunal may recommend terminating the contract with Parkway and awarding it to the correct winner
2. Re-evaluation: The tribunal may order Mantario to re-evaluate all bids using the correct 475-unit count
Good point Canadian procurement law, procurement rules are designed to protect the integrity of the marketplace. Failure to evaluate proposals according to the disclosed terms is a breach of “Contract A”. The consequences should be of great significance.
Instructor Note
The procurement was a RFP- Contract B not a Tender – Contract A circumstance.
With that stated, the comment about “failure to evaluate proposals etc. does have ethical / legal implications anyway.
The consequences typically are relative to the circumstances and intent involved.3. Should the general contractor have been liable, when Vasco was the expert in welding, and Vasco’s actions were the actual cause of the fire?
Yes, I believe the majority of the blame should rests on the GC as he GC explicitly ignored the expert’s safety advice. By declining to remove the shelf angles and instead providing a “piece of plywood” and a laborer, the GC created a false sense of security and directed the specific negligent act.
While Vasco was the expert in welding, the GC was the expert in site management. The GC’s failure was not in the welding technique itself, but in the failure to manage the hazardous environment surrounding the welding.2. Should the subcontractor, Vasco, have been held responsible for the fire damage, when he had performed in accordance with the general contractor’s instructions?
Vasco had a “duty of care” to the property and the public. In the eyes of the law, a warning is not an exoneration. If a professional knows a method is fundamentally unsafe as Vasco clearly did he has a legal obligation to refuse to perform it. Even though he was directed by his superior.
Instructor Note
This is well stated and very true. Over and above liability, “Everyone goes home alive” is meant to be the prime mandate for all workplaces.
Having said that, workers have to have protections against “doing the right thing” and not being punished for refusing to perform work.
That is a company culture subject that involves BOTH the Prime and the Sub-Contractor.I agree that both General Contractor and the subcontractor is liable for the outcome. However, I believe the General Contractor should be at least 80% liable. Hence, while the GC was the primary driver of the negligent, Vasco’s hands-on involvement made him partially responsible for the physical outcome.
Instructor Note
You may have a future as a Court Justice. Context is very important and court discussions increasingly factor in things like “power imbalance”.
See below.In a subsequent Court of Appeal ruling, Jelco Construction Limited v. Vasco (Euca Welding), 2010 ONCA 444, the apportionment of liability was adjusted to 75 percent to Jelco and 25 percent to Vasco. In the Court of Appeal’s view, the trial Judge had failed to give effect to the “power imbalance” that existed between the two parties, which “tipped the scale of responsibility” toward the general contractor.
I find your writing style very persuasive and precise, easy to read and understand. Love your evaluation on what Mantario should consider for the RFP. This is a strong paper.
Very true about the baseline still has to be very clear and precise especially in healthcare. as we don’t want the focus to be on getting the incentives while there is a breakdown with the outcome and deliverables.
I find that Janitorial contracts are not properly drafted. I believe these contracts mainly focus on getting the cheapest labour cost and not the best vendor performance. We see this on a day to day. These contractors cannot be found if you have an emergency situation during the working day. Even though we pay these contractors for their services they only do the bare minimum. Unfortunately, in my opinion and based on what I observe the workers do more cleaning and tiding up in the office for ourselves than what the contracted contractor does. I strongly believe that vested outsourcing would be a better way to procure these kind of contracts to get better performance and services.
