Wednesday, April 17, 2024

So What About Those Non-Standard Contract Clauses: Who Cares?

With funding from Alberta Economic Development to support small to medium size contractors to improve their understanding of risks in commercial contracts, Alberta Construction Association (ACA) in partnership with Edmonton Construction Association (ECA) hosted two more workshops on Oct 4th and Oct 12th.  Why TWO more? The first sold out in the first few weeks requiring a second session!

Utilizing the “Non-Standard Commercial Contract Risk Allocation” report created by Mike Nicolson, Vice President, EllisDon where he identified onerous clauses frequently present in commercial contracts issued by public owners in Alberta, the groups discussed six of these clauses and then submitted a bid where they analyzed the effects of such clauses on their bid price.  Despite working with competing companies to create a bid, the competitive nature of the industry came out with a goal to win!  Even with that desire to win, there were large spreads between the bids representing their unique analysis of risk and mitigation strategies.

What resonated loud and clear during the day’s activities is that if you don’t even know risks exist, because you haven’t read and/or understand the documents, you can’t be prepared with mitigating strategies.

Resonating participant thoughts:

  • Gained perspectives from others’ views on clauses
  • Communication with each other for a collaborative approach to clauses is the way to go
  • We all work towards a common goal – this is why understanding non-standard contract clauses can improve a project’s success
  • A lot of risk can be mitigated prior to entering into a contract by actually reading and discussing the terms of the agreement

So why should you care about those non-standard contract clauses?

 Because as one trade contractor stated the next day following the session:

“Learned a lot yesterday.  Put some of that learning into action even today!”

Without understanding, you can’t create effective action.

The next Workshop will be held on October 23, 2018 in Red Deer.