August 8, 2012

CCA weighs in on federal accountability efforts

PATRICIA WILLIAMS

dcn staff writer

The Canadian Construction Association (CCA) is engaged in ongoing dialogue with Public Works and Government Services Canada (PWGSC) as the department implements plans to strengthen accountability in procurement and real property transactions.

“The government is quite open to continuing discussions with us,” said association president Michael Atkinson.

“What’s important from CCA’s perspective is that everybody understands how this works and that we work out any remaining concerns that we have.”

Public Works announced recently that it was taking further action to strengthen accountability and crack down on firms convicted of certain criminal charges that seek to do business with the department.

It is extending the list of offences that render companies and individual ineligible to bid on contracts to include: money laundering; participation in activities of criminal organizations; income and excise tax evasion; bribing a foreign public official; and drug trafficking.

Existing offences include bid-rigging or other anti-competitive activity.

In addition, both new and existing offences will apply to property transactions, such as leasing agreements, letting of space, and acquisition and disposal of Crown-owned properties.

These measures will also allow the department to terminate future contracts and leases with companies or individuals that are convicted before the end of their contract or lease.

“It’s quite frankly difficult to argue with the intent,” said Atkinson, whose association was apprised of the department’s plans at its annual Meech Lake meeting with federal contracting agencies in April.

“When you look at the list of criminal offences, you couldn’t imagine that a government organization would want to contract with an entity that had been convicted of any of these offences.”

From the CCA’s perspective, Atkinson said it is important to note that the new measures also apply to directors of companies.

He said the CCA’s initial concern when it first learned of the department’s plans was to make sure no additional administrative burdens were placed on law-abiding contractors.”

He said the proposed measures “would not appear to give any ammunition to such concerns provided any attestation or declaration required by the bidder during the bidding stage as to not having been convicted of any of the listed criminal offences is part of the tender form itself and not a separate document that might get misplaced and not filed with the tender leading to likely disqualification.”

The association also didn’t want to see prime contractors put in a position of being required to enforce measures down the construction chain.

Atkinson said the CCA has been reassured that the new measures will apply only to prime contractors and not subcontractors.

Nevertheless, there are some outstanding concerns that need to be addressed.

Atkinson said these include the fact that the measures apply only to firms convicted of offences within Canada.

Firms convicted of offences outside the country would still be eligible to bid on PWGSC contracts.

Public Works is looking into this, he said.

On another front, CCA has expressed concern regarding PWGSC’s discretionary right to terminate a contract where a conviction occurs during the life of a contract insofar as it may impact existing subcontractors and their rights and the effect on any surety performance and/or payment bonds in place.

From a contractual perspective, certain PWGSC contract provisions will have to be altered, to take into account the new measures.

Atkinson said the CCA is also anxious to learn whether the measures will apply to contracts awarded by Defence Construction Canada (DCC).

“My guess is that they will, given that DCC reports to the minister of public works,” he said.

John Gamble, president of the Association of Consulting Engineering Companies-Canada, said that while his organization had not been consulted about the measures, he thinks they would support the intent in principle.

However, he is in the midst of a speaking tour in Australia and New Zealand, and said that he needs to study the details more closely when he arrives back in Ottawa to ensure there are no unintended consequences.

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