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My organization has strongly discouraged the purchase of American products whenever possible. Several direct awards have been questioned because it was with a non Canadian company. I don’t think it would be unreasonable for Canada to implement a similar policy as Buy American to help boost and protect the Canadian economy. But in the meantime without those policies in place it is important to follow trade agreements because without rules there’s no respect or structure to the procurement processes and the rules are how we keep things fair and transparent when spending tax payers’ dollars.
You offer a lot of insight into the complexity of the future of procurement. Like many fields, this on is transforming significantly as well. I think your suggests to fortify procurement processes with risk assessments and diversity of supply sources is a good strategy and its building off something that is already being done more thoroughly. The age of AI is also upon us and it will be interesting to see how it will get integrated into procurement as with such things, it is not if but when.
Budget pressure is a huge issue and is going to continue being one for sure. Hopefully public sector procurement is going to be able to adjust to these challenges. I think we have already started seeing a rise in mitigative methods. When procurement professionals start adopting out-come based procurements, it is allowing the vendor to tell us how they can get things done as subject matter experts and the hope would be that they can save us money why doing it their more efficient way.
If the past half decade has taught me anything, it is that the future challenges of procurement are going to be supply chain issues due to international political unrest and disasters that have an impact on the whole economic world. Covid caused major disruptions in the supply chain of essential products and inflated the cost of many other items as well. Public sector access to those goods got harder and more pricy and some areas of goods still have not recovered to this day. The current global unrest is going to continue to cause supply chain issues because of availability, access, alliances, and social value pressures that are going to change the standard or traditions of public procurement.
I agree, the sub-contractor had the option to refuse to do the work if the risks were so high, and the general contractor is supremely negligent not taking the advice of an expert in that particular field as well as putting his entire work site at risk.
Instructor Note
Company culture regarding Safety and how it is dealt with is a long standing issue in the Construction world. Historically, it has a bad record of pushing through problems to save money or achieve schedule objectives. This case demonstrates how the potential implications of that approach cost far more in the end. At least nobody died.
If you examine the Toyota Production System ( TPS) and Kaizen you will find that ANY worker can stop production if there is a safety or quality concern.A key lesson from this case is that a subcontractor is unlikely to be able to escape liability for work that causes damage, even if the subcontractor very clearly brings the risks of that damage to the attention of the general contractor.
• Who do you think was liable?
They are both liable, because while the general contractor chose to ignore the advice/concerns from Vasco, Vasco still chose to proceed with the work as directed to do it by the GC.
• Should the subcontractor, Vasco, have been held responsible for the fire damage, when he had performed in accordance with the general contractor’s instructions?
I think Vasco is partially responsible because he was well within his right to refuse the work for safety concerns or implement his own mitigations against the GC’s wishes, but he chose to proceed under such dangerous circumstances.
• 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?
The GC being in charge of the work site, is liable for anything that happens on this job site. If anyone was hurt, he knowingly did not take precautions to protect his employees.Incorporating KPIs into the contract for management purposes is smart. Perhaps each room/unit is numbered/labeled and requires a specific amount of carpet which is estimated from the beginning of the contract and then that estimation is compared directly to the invoices for that room or something similar.
When we layout recommendations like this, it all seems so easy to prevent these kinds of mistakes. I cannot say I would think of the importance of the format of an invoice when I am writing a tender, but I am sure thinking about it now. These are very good recommendations.
I definitely agree that a contract manager should be closely involved from beginning to end on a project of this size to make sure everything is following the specifications laid out in the RFP.
I would consider this whole case to be a cautionary tale about there being too many different groups involved in the procurement process. My unit runs tenders and puts contracts in place, but we do not manage contracts, and often the people who pay the invoices aren’t involved in the project either.Instructor Note
You have hit upon a fundamental problem in many organizations.
Some call it a “silo” mentality or “tossing it over the fence” for someone else to deal with it.
This case involves an “abdication” of responsibility by the OCHC where basic due diligence was not conducted.
Management who pay invoices blindly without having some sort of “grounded” confirmation are misunderstanding the purpose of their job.Contract owners have no control over the actions of outside parties like vendors, but they do have control over how they conduct themselves and their business. It is the contract managers responsibility to keep in the know about the progress of the contracts they are managing. Below are my three recommendations for an owner who wishes to avoid this type of situation.
1. The tender should have included the floor plans as apart of the appendices which would allow accurate estimations for the vendor when budgeting the amount of carpet and waste.
2. The tender requirements could also expect vender to provide their measurements and cut plan for the work.
3. The owner should require a full breakdown of materials, labour, etc on each of the invoices and be able to easily compare those numbers to the cut plan.I had the same thoughts about either cancelation and retender or re-evaluate. I wonder how E.G. Spence will behave if the results of the re-evaluation are the same. Will it even be worth it for them to go to court? Other than Mantario looking very untrustworthy, as long as they redo the evaluations with the correct criteria and yield the same results, I don’t know what E.G. Spence is eligible for.
Instructor Note
You cannot control what E.G Spence will, or will not do in a re-issued competition.
However, you can control what you, as a public sector representative, should do.
Run a fair, transparent RFP process consistent with your stated Evaluation Criteria.
If that is done, there is no reason for any to go to court.I agree that if this complaint is taken to court that at the very least E.G. Spence should be compensated for their legal costs, but I wonder what should be done to prevent court action and still make E.G. Spence feel like justice was had. The case did say that they wanted to keep it out of court if they could.
I agree that ignoring the evaluation process outlined in the RFP does not protect the integrity of the procurement process and that Mantario Housing should re-evaluated the proposals using the correct formula. Apart of me wonders how soon they realized they use a wrong formula. Mantario Housing should have extended the tender and posted an addendum with the correction.
Instructor Note
I would suggest that Mantario and possibly the Bidders realized they had the wrong formula on November 30- 2015 at the Mandatory Site Visit.
Mandatory, means everyone was there hearing the same information. The post Site Visit Addendum should of addressed the subject right away.
Aside from much of the curious math involved, there are a bunch of variables including economy of scale pricing.This type of error negatively impacts the trust in public procurement processes and it is pertinent to make corrections quickly and transparently. In this case, they must re-evaluate the submissions using the criteria set out in the tender and provide the applicable results to any interested parties. Since the results will not change the outcome of the tendering process, E.G. Spence might not have much ground to be compensated, but if they submitted a bid payment perhaps they could be reimbursed. For truly transparent purposes the government could cancel and rerun the whole tender, but given the circumstances of this tender, that might be overkill.
Instructor Note
RFP process not a Tender so cancelling and re-issuing with much more clarity is an option.
Only a Contract A process brings an obligation to award.
So perhaps not overkill at all, but quite possibly the correct way to resolve the issue.I agree that consulting is a good use of the vested outsourcing principle. My organization did a tender for consulting services and the deliverables were too vague and we kept needing extensions because the board that was supposed to be the contact for the vendor were rarely available to meet. I can’t help but feel that the project would have went better and faster had the government team and the vendor team worked directly together and all the thoughts could flow more freely between them, instead of this contract being a side project off of a board’s desk.
