ACA Applauds Alberta Infrastructure response to industry concerns regarding change orders and mark-ups

As noted in our invited article from Alberta Infrastructure Minister Bhullar, Alberta Infrastructure has numerous project opportunities in the short and long term.   ACA applauds the Minister and Department for their commitment to work with industry to re-engineer contracting policies and procedures and modernize government’s procurement process.  As part of this process, ACA Chairman Scott Matheson is leading a significant industry effort to review contracts with Alberta Infrastructure.

While this work will be underway for some time, ACA applauds Infrastructure for moving forward this Fall to address some longstanding ACA recommendations.  Changes adopted by Infrastructure align with industry standard practices and are a model for owners that strive to remain preferred clients.

In particular, ACA acknowledges key changes:

 Section 01_26_63B Change Order Procedures:

Additions to Direct Costs (under Definition 2.3 page 1):

  • Operation and maintenance of site offices as a Direct Cost
  • Administration at a site office as a Direct Cost
  • additional bonding and insurance cost as a Direct Cost

Increase to Labour Burden 3.6.2.2 (page 3) to 45% of Direct Labour Cost

Section 00_72_00B General Conditions of Contract

Increases in percent mark-ups in 2.5 Valuation of Changes (page 9 of 22):

.4 On extra work authorized by the Province, and to be paid for under method 2.5.1.1, the allowance for overhead and profit shall be based on the following schedule:

.1 For work performed by Contractor’s own forces, including work performed to accommodate work performed by Subcontractors, the Contractor shall be entitled to a mark-up of 15% on its actual Direct Costs related to the change in the work for overhead costs and profit.

.2 For work performed by Subcontractors, including work performed to accommodate work performed by Sub-subcontractor:

.1 Each Subcontractor shall be entitled to a mark-up of 15% on actual Direct Costs related to the change in the work for overhead and profit.

.2 Contractor shall be entitled to 10% on the Subcontractors’ total price to cover their Administrative Fee and profit.

.3 For work performed by Sub-subcontractors:

.1 Each Sub-subcontractor shall be entitled to a mark-up of 15% on actual Direct Costs related to the change in the work for overhead and profit.

.2 Subcontractor shall be entitled to 10 % on the Sub-subcontractors’ total price to cover their Administrative Fee and profit.

.3 Contractor shall be entitled to 10 % on the Subcontractor’s above total price to cover their Administrative Fee and profit.

Message from the Minister to ACA Members

bhullarSince becoming the Minister of Infrastructure just a few short months ago, I’ve learned a great deal about the construction industry and the importance of the relationship between government and industry.

I’d like to thank your organization for being willing to take the time to meet with Deputy Minister Barry Day and myself to discuss the issues and opportunities we’re all facing. We appreciated the frank and honest feedback and agree there is room to improve how we work together and I’d like to reiterate the value industry brings to the table.

We’re in the process of redirecting the focus of our organization. Based on feedback I have received from your members, work has already started to re-engineer our contracting policies and procedures. This is an important step to standardizing government contracts that will modernize government’s procurement process.

There will be more changes coming to ensure more effective monitoring, faster decision-making and above all, increased accountability. These changes will start early in the New Year as we focus on the business of the Ministry – delivering physical infrastructure.

And with the biggest capital build of schools in Canadian history – 230 – there’s a lot of work to be done in Alberta. Some RFPs have gone out and more are coming for Phases 2 and 3 of the schools plan. But it doesn’t end with schools.  Albertans also need infrastructure like a continuing care facility in Parsons Creek and a provincial facility in High River.  You can find out more about our upcoming opportunities through the Government of Alberta’s Purchasing Connection (http://www.purchasingconnection.ca/.

These are only a few examples of the work that’s going on in our great province and I look forward to continuing to work with the construction industry to deliver these important projects to Albertans.

–Manmeet S. Bhullar,
Minister of Alberta Infrastructure

OHS Code Review Under Way for Safety WCB Committee

The ACA Safety WCB Committee is currently working its way through the OHS Code review process.  Thanks to your input we are able to look at a number of issues that concern us and will be pushing ahead to create a position on the overall changes and how to work with the government on this important file.

High on the list of concerns within our industry is the Silica monitoring and it will be an issue we will continue to advocate for our members. We will continue to push for changes within the new code as well as trying to get clarity on a number of rewritten sections. ACA will share with members our final submission in January 2015.