City of Ottawa faces “new risks” from Ontario Construction Act’s implementation, chief procurement officer reports

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Ottawa Construction News staff writer

The City of Ottawa’s chief procurement officer says the city faces new risks because of impending “prompt payment and adjudication regimes” under the new Ontario Construction Act.

Will McDonald wrote in a report to City Council in May that his department has needed to “conduct extensive research in order to identify risks to the city and collaborate with various city departments to bring relevant procedures into compliance.”

“Mandatory changes with respect to payment holdbacks were identified and addressed, and Supply Services continues to coordinate with Legal Services and Infrastructure Services to determine what additional changes would advantage the city,” McDonald wrote.

“The imposition of financial penalties will increase the city’s risk profile and will therefore increase the importance of the city’s change management in respect of this new legislation.”

McDonald also reported on the progress of the city’s Vendor Performance Management (VPM) system, which started in 2015.

Under the program, formal performance evaluations have been conducted for  construction projects valued over $100,000 and professional engineering services contracts valued at over $15,000.

By the end of the fourth quarter of 2018, McDonald reported:

  •  2,143 projects having been opened for evaluation
  • An average vendor score of 80 per cent, with 1,449 final evaluations completed;
  • Over 97 per cent of projects having received a score that is satisfactory or greater;
  • Only one per cent of project scores having been appealed;
  • An average of five projects evaluated per vendor;
  • Consistent positive feedback from industry on the resulting improvements in communication and consistency, and
  • Improved contract administration and project management practices.

“The difference in the number of projects opened for evaluation and the number of completed projects with final evaluations is due to the fact that many projects opened for evaluation span multiple years,” McDonald wrote. “Moreover, the final evaluation is only completed after an internal review process to ensure accuracy and consistency in evaluations and a vendor appeal period.”

He reported his department continued to consult with the various industry associations in 2018 regarding the implementation of VPM scores in contract awards. “Feedback provided by both internal staff and the vendor community has been positive and as a result, Supply has begun using VPM scores in its contract award decisions,” McDonald wrote.

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