Question 1

In order to comply with GC 10.3.1, how should a Contractor deal with submitting Force Account reports to the CA when there is a delay in gathering billing from suppliers?

Accepted Answer

QUESTION

GC 10.3.1 requires the Contractor to submit FORCE ACCOUNT reports to the CA before the end of the next Day. Sometimes this just isn’t enough time to gather billing from a third party. There are times when we simply can’t get an invoice from larger suppliers for 30 days. We have done extra work by force account and because it was not submitted in time, we weren’t paid. Although the CA acknowledges that the work was done, they can rely on GC 10.3.1. Surely this action isn’t fair.

Do you have any comments on the submission time and consequently the CA not needing to approve payment or should we just decline the work?

COMMENT

GC 10.1.1 (3) sets out the Contractor’s entitlement to material cost and references invoice transportation and haulage costs.

One might suggest to the CA that a reliable estimate of material costs, etc, based on supplier quotations, and later adjusted by final invoice amount, might be adopted to overcome the invoice delay. Or, the supplier might be willing to change their billing practice to issue an invoice on order.

Question 2

How should Owners define their evaluation process for the Appendices in the Form of Tender (Part B)  in the Instructions to Tenderers Part 1?

Accepted Answer

QUESTION

I have a question about the Appendices in the Form of Tender (Part B) of the integrated contract document. The Instructions to tenderers, Part 2, don’t specify an evaluation process for these appendices, and I couldn’t find any related information in the user guide. How should owners define their evaluation process for these appendices, in the ITT, part 1?

COMMENT

The MMCD User Guide pg 09 of 33 deals with the Appendices

MMCD User Guide Section 2 Page 9 of 33

Caution: In practice, many Owners have let this requirement slide with respect to Appendices 3, 4 and 5, without changing the wording of IT 5.3.

This is a dangerous practice as it not only eliminates the potential of comparing information among Tenderers but also leaves the Owner open to lawsuits from Tenderers who completed them, if the Owner awards to a Tenderer who did not.

.2. If Owners are not interested in reviewing individual Appendices, the relevant sub-clause(s) should be removed using IT-4.

On the other hand, Owners who have been lax about enforcing submission of all Appendices should be cautious about an abrupt reversion to a “hard line” as this could cause elimination of desirable tenders. When Owners are in this situation, it would be appropriate to caution Tenderers using IT-4 that, contrary to past practice, the Owner will strictly check for all mandatory Tender submission requirements such as Appendices and the like.

Suggestion : The instruction might read ”Tenderers are reminded that completion of all required information on the Form Of Tender, including the Appendices is mandatory. Tenders lacking all required information will be rejected as incomplete”

Instructions to Tenderers - Part II

5.3 A Tender must include the following Appendices:

You might want to consider Inserting in IT-4 something like the following

Question 3

Is there a specific MMCD subcontract document template?

Accepted Answer

QUESTION

I am trying to find out some information on creating subcontracts with MMCD. We have some contracts in-place where we are designated the prime contractor under an MMCD contract, but are looking at issuing some subcontracts under the same contract. Is there a specific MMCD subcontract document, or is it best to go from there and issue a CCA-1 and stipulate the original contract documents to apply the MMCD specifications to their scope of work?

COMMENT

MMCD does not have a subcontract template. The CCA-1 contract sounds like a good idea.

Question 4

If the Contractor cannot provide the name of a specific subcontractor but lists the work item as being subcontracted out and providing a “to be determined” would this make the tender non-compliant?

Accepted Answer

QUESTION

If the Contractor cannot provide the name of a specific subcontractor but lists the work item as being subcontracted out and providing a “to be determined” would this make the tender non-compliant?

COMMENT

One of the unstated purposes of requiring subs to be listed was to protect subcontractor bidders protection against bid shopping by the general after award. Without those subs being listed, there is no way for the Owner to enable this protection.

Question 5

If the Contractor does not specifically list any Subtrades, is the tender non-compliant?

Accepted Answer

QUESTION

The purpose of IT 5.8 is so that the Owner has the right to refuse the use of a specific subcontractor.

COMMENT

There is no IT 5.8 in our documents, so we cannot comment on it.

It was expected that if Appendix 5 to the tender was not included then the tender would be non-compliant and the Owner would not be able to accept it. Form of Tender 4.1 confirms the bidder has included all appendices, so if they are not included the tender is incomplete.

Question 6

Although specifically required by the Owner, the tenderer does not include any Subcontractor as the Contractor will be self performing the tasks. Is the tender deemed non-compliant?

Accepted Answer

QUESTION

The Owner specifically asks for the listing of survey, water pipe installation, and landscaping Subcontractors for a tender on Appendix 5 . The tenderer does not include any Subcontractor as they will be self performing theses tasks. Is the tender deemed non-compliant?

COMMENT

It is OK for the Appendix to indicate that the Contractor would do all work components without subcontractors but then the Owner has the ability to enforce that through GC4.11.2. It is not OK for the bidder to leave the appendix blank or add words to the effect "we have not decided yet" or "will be advised later" etc. It was intended that the owner would have information on the subcontractors to use for tender evaluation under IT15.1 and the opportunity to reject subcontractors under IT16. If the Owner has asked for the names of subs for certain parts of the work, then the bidder must provide those or specifically indicate the general contractor will do those portions.

Question 7

What options are available to an Owner for negotiating unit prices?

Accepted Answer

QUESTION:

I have a question about how the COVID-19 pandemic may affect material and labour costs of MMCD items – we’ve noticed that some of these items in the tenders we have received during the pandemic have increased in costs by almost double, particularly on materials and related components. On one of our tenders, we are inquiring with the lowest tenderer to provide some background to their pricing for us to determine if increase costs are an effect of the pandemic, or other factors.

The question I have is: what options do we have for negotiating unit prices? I know that we can negotiate quantities, since those are based on estimates, but can you advise on the practice of negotiating actual unit rates and what best practices are, from the MMCDA’s perspective?

COMMENT:

Unless the Owner wishes to modify the standard Instructions to Tenderers, there is no ability to negotiate prices or quantities prior to award. Tender law typically does not permit this - that is the realm of Requests for Proposals. However, Owners have the ability to structure their call by modifying the Instructions to Tenderers in any way they wish.

After Award: Perhaps one idea would be to provide a Supplementary GC which gave the CA the right to require proof of costs "on demand” and/or some kind of price adjustment mechanism if it is somehow proven that there is some price gouging built in. It is not clear whether this is significantly different from bid unbalancing and MMCD currently provides protection against this only when quantities overrun. Possibly normal "competitive pricing" through tendering does not adequately protect the owner from a rogue bidder.

In addition, we have a new “Contract consideration” video available on Covid 19 at https://www.mmcd.net/resources/video-resources/

Question 8

Is a broadly worded privilege clause appropriate in Additional Instructions to Tenderers?

Accepted Answer

QUESTION

I am contemplating the following Additional Instruction To Tenderers and am looking for constructive feedback on whether it is appropriate and if there is any legal precedent for such discretion.

Basis of Contract Award & Acceptance

The Owner reserves the right to award the Contract based on the above pre-requisites and to reject without further consideration, any tender which in its opinion, does not meet the criteria it considers essential for this project.

The tenderer, by submitting a tender, waives any claim or recovery for loss of profits or any prospective damages whatsoever if no Contract is entered into with the tenderer. In no event, shall the Owner be liable for the Tenderer’s cost of preparing and submitting a tender, which shall be done by the Tenderer at its sole risk.

COMMENT

This looks like a “broadly worded privilege clause”, a concept which the MMCDA has discussed and rejected, because we anticipate that this will deter bidders.

However, there is support for s a request for proposals, so that Owners can have flexibility to reject and likely negotiate. MMCD is investigating a RFP template.

Question 9

All tenders received were over budget. Can the project be retendered without alteration to the original tender package?

Accepted Answer

QUESTION

I am looking for guidance on the legalities of retendering a construction project that was previously tendered but all tenders were rejected as the costs were significantly more than the Engineer’s cost estimate and therefore over the allocated budget.

COMMENT

The GCs allow the owner to reject all bids, which they probably should do if they don’t have the funds to proceed.

Question 10

There has been a preliminary deficiency holdback list with values sent out and it exceeds the final progress payment. What can a Contractor do?

Accepted Answer

QUESTION

I am the Contractor. Substantial Completion is not met. There has been a preliminary deficiency holdback list with values sent out and it exceeds the final progress payment. What can a Contractor do? And what can the Contract Administrator do?

COMMENT

GC 18.6 sets out the process for Substantial Performance. GC 18.4.2 provides for a 200% holdback when considering Substantial Performance, until the deficiency is remedies. If the values established are in dispute, then refer to Disputes, section 17.0 of the GCS.