Clarity is Key!

Firstly, on behalf of the OGCA, I would like to extend to all of our members a very Happy New Year! I personally hope that 2022 brings each and every one of our members much health, happiness and prosperity!

A new year brings new possibilities and everyone hopes for a positive change.

Although the year has advanced, some of the provisions that the OGCA has seen in tender and contract language has not. Instead, what the OGCA members have provided to us over the course of the last two years has been language that truly is onerous, one-sided and at time, completely dictatorial!

So, as a contractor, you may be asking: “What has the OGCA done to combat these questionable contract provisions?”

Firstly, the OGCA has continued to push back on the buyers of construction that maintain positions that are fixed and attempt to download risks onto our members. This has been accomplished when our members provide us with language that they find questionable or problematic in tenders. The OGCA then responds accordingly and provides a letter to the buyer of construction highlighting the vexatious language, but also provides possible suggested language to facilitate better terms and conditions for our contactors. These letters have been very effective in changing the tone and content in tenders and ultimately benefiting all those bidding said project.

Secondly, the OGCA has launched a number of media campaigns on specific procurement topics that adversely affect our contractors and that are in dire need of updating. One such topic is the reduction of validity periods in tenders back to the historically accepted 30 day period. This campaign included all buyers of construction in Ontario and was included in multiple media publications, coupled with a direct letter writing component. The goal was to highlight how the pandemic has affected the overall supply chain and the messaging communicated that all subtrades and suppliers were now only holding their pricing to the general contractors for no more than 30 days. As of late, that aspect has been updated to reflect that the supply chain validity period is as short as 48 hours.

This brings us to the third component and this new initiative was directly brought about because the OGCA Board of Directors believes that our members need to more fulsomely understand the questionable language being included in tenders, as well as the potential harm this language could instill. It is a new section in the OGCA Newsletter as well as on the OGCA Website. The section will be called Clarity in Contracts.

The purpose of the new section is three-fold.

First, to highlight onerous or problematic language in tenders and contracts of which our members need to be made aware. Some members review contracts briefly without taking a very deep dive into all of the complexities that language may carry. This new section is intended to highlight the language that contractors should take more time and care to review and comprehend completely prior to accepting, or in most cases, refuting. It is always easier to negotiate these terms prior to signing any contract, since once the ink is dry, the agreed to terms and provisions govern the final outcomes.

Second is to educate our members as to why they need to track this type of language in contract documents. An explanation as to what the language really means or the intent behind the language is necessary to truly internalize how said provisions affect you directly as a contractor, but also how it governs your relationship with the buyer of construction.

To facilitate this understanding, the OGCA will parlay its relationship with our APP members toward providing all of the requisite legal, insurance, bonding, and/or other perspectives necessary to communicate the importance of said language directly and professionally to our members.

Third, and most important, is to communicate the potential pitfalls if this onerous language is not being addressed and simply accepted outright by the contractor. Everything in a contract has meaning, and knowing not only the basis for having that language in a contract, but the possible negative repercussions of not amending said language is key to making an informed decision. Information is power and providing our members with comprehensive and concise information is imperative when discussing contract documents.

Attached in our newsletter you will find this new section and the very first article is on “Indemnities and Limitations of Liability.” This article is courtesy of McMillan LLP and this will be the first in the series. The goal is for each newsletter to feature either a new subject to table or expand on an existing topic broached. The hope is to keep the terms and provisions timely and front of mind for all of our members when they review their tender and/or contracts.

And finally, this section is at the pleasure of the members, which means that you have direct input into what topics we address. Is there something that you would like clarity or a deeper understanding of? If you do, odds are that multiple contractors feel the same. Therefore, no topic or subject is a bad one. Instead, we ask that our members submit topics directly to me to help seed and facilitate further dialogue and comprehension on contract related terms.

This section, as is the OGCA, is here to serve you, our members, and make us all better together in one united voice for the industry.

Should any of our members have any topics they would like further explanation on or if you require any other type of assistance from the OGCA, please contact me directly at giovanni@ogca.ca or via phone at 905.671.3969.