How does the quality of documents actually affect the pricing?
In response to the question posed in the title of this article, I can sum up the entire editorial in just one word: completely.
I could have also used the words incredibly; definitely; absolutely; invariably; and vastly to also provide you with the causal link to the amount of time and effort that is placed into the information contained within project documents and the resultant price.
This is something that has not only been common knowledge in our contracting sphere, but something that at some point, every contractor has communicated directly to the owners.
The OGCA has been touting this interdependency for decades, and there has been a series of repeating ebbs and flows to the quality of the documentation provided. At times, there is a communal movement by the owners to better the process and then, and for no apparent reason, on mass, the owners revert back to lesser information.
Why? What would cause the owners to provide lesser information, knowing that by doing so, they are directly creating ambiguity and uncertainty, which equates to one word: risk?
And what do contractors do when confronted with risk? Why, they price accordingly based on the inherent level of said risk. Low risk equals a slight adjustment in costs. High risks translate into large presumptions, which necessitates increases in correlating costs.
I believe that, directly due to the pandemic, contractors are currently finding themselves in the latter category, and that owners are once again tabling projects with lesser information or information that is clearly “cut and pasted” from some previous project that has no place in the current package. The OGCA has been informed by some of our contractors that the current batch of tenders being tabled are amongst the worst they have seen for decades.
As you are all aware, the projects that OGCA contractors build are among the most complex and detailed-driven of all areas of construction, and therefore require the equivalent efforts being demonstrated by the owners to ensure that contractors have been afforded all details required to accurately bid.
I understand that bid packages that are 100 per cent complete will never truly occur since that would take into account potentially unforeseen variables from the onset, and by definition, that would negate the “unforeseen” aspect of those variables. But I do believe that contractors should be afforded more than a few proverbial scribbles on the back of a napkin and then be expected to accurately provide pricing with zero wiggle room for the contractor.
So what is the OGCA doing about this issue?
Well for one, the OGCA has actually never stopped dealing with this issue. Your association has constantly reminded construction owners that the inherent accuracy of pricing on a project is directly related to the detail contained within the project documents. And although our contractors are adaptable, not one of our contractors can create a “silk purse from a sow’s ear.”
Secondly, the OGCA, in conjunction with the Construction and Design Alliance of Ontario (CDAO), has commissioned a study that is being conducted by Ryerson University’s Institute for Infrastructure Innovation (RIII). The focus of the study is on the challenges the construction industry deals with in the form of cost overruns, schedule delays and litigation.
Ryerson will investigate the data, which was collected from various projects, to establish quantitative relationships between the upfront investment in pre-project planning and development, the quality of bid documents, and project performance indicators (e.g. change orders, cost overruns and schedule delays).
The data collection phase of the study is currently underway, and the OGCA welcomes any and all confidential project contributions that our members know of that would befit this endeavor. Ideally, this study will provide a cross-section of projects from the successful ones to the mediocre to the problem projects. I affectionately refer to this range as the “Good,” the “Bad,” and the “Ugly.” Click here for the English version of the survey. The survey is extended until July 31.
To date, this study has attracted some major participants from Ontario who have already provided sample projects. All contributors will remain anonymous to ensure that the data is seen through a clinical lens and not skewed due to any potential biases.
What do we hope to find? A direct causal and quantitative link to the amount of upfront investment into the quality of the documents being provided to the contractor and the outcome of said project.
Why do this, since I have already noted that this information is common knowledge in our contracting sphere?
Because it provides the entire construction industry, specifically the owners, with quantitative evidence to clearly demonstrate the synergistic effects that proper, upfront investment in pre-project planning and development in the quality of bid documents and the ultimate outcome of the project performance indicators. Additionally, the inverse will also be highlighted.
This study will then lead us to point three of what the OGCA is doing on this matter.
Ultimately, the industry will now have a comparative and quantitative study to utilize as evidence when approaching owners in our continuing discussions. The OGCA, along with the rest of the CDAO, will confront owners to communicate the findings and the appropriate actions to better some less than stellar situations.
The OGCA will continue to ensure that our voice is being heard and to get more owners to adopt better upfront investment in pre-project planning and development in the quality of the documents being issued for tenders.
Should you have any questions about the quality of documents or require assistance from the OGCA, please contact me directly at email@example.com or via phone at 905-671-3969.