Question 1

"Coping With COVID-19" video - Contract Consideration Series

Accepted Answer

(22m) Brian Weeks reviews options for owners and contractors during the COVID-19 pandemic, based on what is allowed under the MMCD standard language, and depending on the stage of the project: active tender, pre-award, or after construction has started.

Watch this and other Contract Consideration videos on MMCD Association's YouTube Channel.

Question 2

What can I do if the bidder adjusts the Schedule of Quantities in the tender?

Accepted Answer

QUESTION

I just opened a tender and [in] one of the submissions [the bidder] redeveloped their own schedule of quantities and submitted it. The regenerated Schedule of Quantities has no titles or identifiers on it at all, except for it was included in the sealed envelope. Some of the descriptions have been abbreviated. What should I do?

COMMENT

MMCD cannot offer legal advice. However, there are resources to help in interpreting MMCD documents and processes.

Para 7.2 Page 7 of 13 Preparation and Award Checklist talks about the appendices, including the Schedule of Quantities and Prices.

In addition https://www.mmcd.net/resources/video-resources/ contains the Contract Considerations video series. "The Importance of the Agreement" and other videos may give some background to the issues.

Question 3

Developing specifications for different jurisdictions: Do you recommend that we develop our own supplementary specifications as a crown corporation?

Accepted Answer

QUESTION

We are looking to adopt the MMCD documents for civil works projects related to our developments [in] BC. Since we work in many different jurisdictions, is it recommended that we develop our own supplementary specifications as other fixed owners (e.g., municipalities) do?

COMMENT

There is potential for each local government to have locally based supplementary specifications that reflect their individual preference for infrastructure details like street lighting, sidewalk/bikeway configuration, etc. As a result, MMCD would recommend that you request a list of compatible supplementaries (if any) from each jurisdiction, before issuing tenders for public infrastructure. The basic MMCD specifications and standard drawings will be a good basis for the core requirements of a contract. Adding local supplementaries to a local contract will ensure compatibility.

Question 4

Can a project be completed without a Contract Administrator?

Accepted Answer

QUESTION

On a project under $200,000, can a project be completed without a contract administrator?

COMMENT

The owner can appoint a Contract Administrator from their staff, but since the CA is in an inherent

However, because the CA is in a decision-making role, one should be appointed, and they should consult the GCs for the duties and procedures that are embedded in MMCD contracts.

Question 5

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 6

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 7

What happens when a Contractor breaches the contract?

Accepted Answer

Delay, workmanship, may be covered in General Conditions clauses, such as: GC 4.13 Rejected Work; GC 13.2 Delay by Contractor; GC 15.3 Termination; GC 23.1 Reimbursement for Wrongful Act or Neglect and others.

It is important to document all communications.

This situation may require legal advice...but check the GCs for sections relevant to the alleged breach

Question 8

Quality Assurance & Quality Control: Does the contractor need to provide testing to confirm they have met the applicable standard or does the owner have to pay for this under General Condition 4.12?

Accepted Answer

QUESTION

I understand is compaction is covered under sections 31 23 01 and 31 24 13 and 33 11 01 1.0 & 1.1 for water main installations. Compaction needs to be to 95% Modified Proctor.

COMMENT

Check out the “Contract Considerations” video “Quality Assurance and Quality Control Testing” on the MMCD website mmcd.net.

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

The sole bid received is over the approved budget. Can the Owner negotiate with the bidder?

Accepted Answer

QUESTION

The client received only one bid in response to the tender that is over the approved budget for the project.

COMMENT

Where there is only one compliant bid, the issue of violating conditions of Contract A with other bidders does not exist. The GCs allow the owner to reject all bids, which they probably should do if they don’t have the funds to proceed.

Then if the municipal bylaws permit negotiation without competition, the Owner can proceed to adjust the design and requirements to negotiate a price both can live with. Once a deal is reached, the documents are adjusted to suit and Contract B commences just as it would if there had been a normal process. I don’t think there is any violation of MMCD GCs or ITs if it is done this way. More likely the problem will be purchasing rules and restrictions.