Monday, 4 July 2016

Membership Report - Specifier: June 2016

As we continue to promote CSC, the need for value in the construction industry is greater than ever. Since our last report in May, the Vancouver Chapter membership stands at 154.

For More Information on Membership:
Please contact Mario Maggio
Tel: 778-986-6058

Sunday, 3 July 2016

CSC Construction Tour - Specifer: June 2016

The annual CSC Construction tour in May was a big success!

We met for lunch at the Dublin Crossings Restaurant and then on to explore the Marine Gateway Project. This is a new concept of combining retail and residential in one location. The entire project is built on a geothermal plant which allows buyers to predict and then lock into energy prices for the next 30 years. In cooperation with BC Hydro, tomorrow’s energy bill will be the same as today. The entire project sold out in record time.

Several of the restaurant sites were selected after all residential sites were sold and residents were able to participate in requesting which restaurants to add. Sky trains arrive and depart to the city regularly so the need for a vehicle is drastically reduced. The concept is to be energy responsible and have a better quality of life. Less glass and more thermally efficient panels may lead the way to better building practices in BC.

Thank you to our hosts from Perkins & Will Architecture: Ryan Bragg, Development Lead and Joshua Rudd, Intermediate Designer.

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Saturday, 2 July 2016

Sufficiency of Notice: What Types of Details Need to be Included in a Notice of Dispute? - Specifier: June 2016

By Jared Epp, Robertson Stromberg Barristers and Solicitors

Building contracts, like CCDC contracts, frequently require parties who disagree over things like extras to submit particulars of their dispute to an engineer for determination. The findings of the engineer can then be challenged by either party in arbitration. The detail that must be included in these dispute notes was recently discussed by the Ontario Court of Appeal in Ross-Clair v. Canada (Attorney-General).

The Facts

In this case, a general contractor (“Ross-Clair”) was hired by the federal government to build management offices at the Millhaven Institution, which is a maximum security prison located in Bath, Ontario. The parties’ contract set out detailed requirements in terms of how Ross-Clair was to submit claims for extras:
35.3 When the contractor has given a notice referred to in GC 35.2, the contractor shall give the Engineer a written claim for extra expense or loss or damage within thirty (30) days of the date that a Final Certificate of Completion referred to in GC 44.1 is issued and not afterwards.
35.4 A written claim referred to in GC 35.3 shall contain a sufficient description of the facts and circumstances of the occurrence that is the subject of the claim to enable the Engineer to determine whether or not the claim is justified and the contractor shall supply such further and other information for that purpose as the Engineer requires from time to time.
If either the Owner or Ross-Clair disagreed with the findings of the Engineer, they could elect to have the issue determined through binding arbitration. However, arbitration was only available if and after the Engineer made a finding.

A number of issues arose during construction, most of which centered on Ross-Clair’s inability to meet the scheduled completion date, which was January 24, 2009. A number of letters were exchanged between the parties on this issue. These letters later formed the foundation for Ross-Clair’s claim for extras and provide context to the dispute.
  1. December 5, 2008 Ross-Clair informs the Engineer that an extension is needed to complete due to delays caused by the owner and that Ross-Clair has incurred additional costs of $1,437,976. Ross-Clair indicates it will provide a breakdown of these costs in the future. 
  2. December 16, 2008 the Engineer advises Ross-Clair that it needs more information before it can process a claim for extras. 
  3. February 27, 2009 the Owner reminds Ross-Clair that it has failed to complete the project on time. 
  4. March 2, 2009 Ross-Clair informs the Owner that Ross-Clair is entitled to an extension due to owner caused delay. RossClair also attaches a document listing the sub-contractors it owes money to for the project. These costs total $1,437,976. 
  5. April and May 2009 both the Owner and Engineer request that Ross-Clair provide additional documentation in support of its extras claim. 
  6. October 6, 2009 the Owner grants Ross-Clair an extension to complete without prejudice to the right to object to the extra costs Ross-Clair is claiming. 
  7. March 31, 2011 Ross-Clair claims additional costs of $766,700. 
  8. April 2, 2011 the Owner advises Ross-Clair that its letters did not contain enough information for the Owner to be able to process the claim for extras. 
  9. February 10, 2012 the Engineer certifies the project as being complete. 
  10. May 28, 2013 Ross-Clair provides the Owner with a detailed report breaking down its claim for extras.

Ultimately, the Owner refused to pay Ross-Clair’s claim for extras. However, the Owner also instructed the Engineer not to make a finding in response to Ross-Clair’s May 2013 report, thereby depriving Ross-Clair of the ability to seek arbitration. Ross-Clair then sought a court order requiring the Engineer to rule on its claim for extras.

The Results

In considering this issue, the Court discussed whether or not the letters prepared by Ross-Clair gave the Engineer sufficient information about the claim for extras. At the outset, the Court noted that the detailed report submitted by Ross-Clair in May 2013 could not be considered because it was delivered, contrary to GC 35.3, more than 30 days after the Final Certificate of Completion was issued. This meant that the details of Ross-Clair’s claim were limited to what it set out in its 2008 and 2009 letters.

In considering whether or not these letters had enough detail to satisfy the notice requirements in the parties’ contract, the Court stressed the fact that the contract needed to be interpreted as a whole. This meant that the provisions in the contract, which regulated how extra work would be priced (ex. costs of labour, materials, costs to hire sub-trades, over-head mark-up costs) needed to be outlined and detailed in the claim for extras, as without it the Engineer would not have the information needed to make a meaningful decision.

The court was also very concerned with the fact that Ross-Clair had not responded to the Owner or the Engineer’s request for more information until May 30, 2013, which was more than 12 months after the project was completed. Given these circumstances, Ross-Clair was not allowed to advance its claim for extras.


The decision reached in Ross-Clair is significant for a number of reasons including:

  1. It reiterates the importance of ensuring that the strict notice provisions, in terms of dispute notes, be followed. Had RossClair provided its detailed report for extras within 30 days of completion, the court might have required the Engineer to rule on whether or not these extra costs were legitimate; 
  2. It confirms that “one-liner, emailed” notices of dispute are often not good enough. Rather, contractors must, and can be expected to, take care to alert the owner as to when extra costs have been incurred as well as to provide the owner with meaningful information as to what these extra costs consist of. For example, if a contract states that extras will be paid on a cost-plus basis, it may not be enough for a contractor to say it is been delayed and it has suffered a certain amount of damages. Rather, detailed breakdowns of labour and material costs, as well as a specific explanation as to why these costs were incurred, should be provided in the initial dispute note; and 
  3. It highlights the importance, particularly for an owner, of having a diligent engineer on site. Had the Engineer not told Ross-Clair that it needed more details to process its claim, the court may have had more sympathy for Ross-Clair’s plight.

Ultimately, Ross-Clair serves as a reminder to contractors that they need to take care in completing notices of dispute, and also reminds engineers and project managers that they can demand information that they need to fairly evaluate requests for additional payment both in terms of whether or not the extras are legitimate and what the cost of the extras might be.

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Friday, 1 July 2016

Words from the Chair - Specifier: June 2016

June is here and the CSC chapter is preparing for our annual SpecGolf tournament coming up on July 14th. The new time and venue is in response to the tough time the chapter has getting everyone out in September. We’re hoping that there aren’t too many people away on vacation. If you like the date or have any feedback, please let me know. We are currently still trying to gather feedback for the program report, so if you or someone you know wants to get involved and present, please bring your ideas forward. We’ve also been notified that Simon Wong will the recipient of the CSC Vancouver Chapter Bursary award this year. Every year the chapter awards $750 to a BCIT student, the awards ceremony took place on June 22nd, 2016

For those that didn’t get to make it out to Halifax for CSC National Conference this year, you missed out, the Halifax chapter sure knows how to plan a great event. I’ve never seen so much lobster stacked on plates as there was at the fun night. Our Director (Kim Tompkins) was the best dressed pirate and also got inducted in the College of Fellows. This is only awarded to those have made outstanding contributions to CSC (job well done Kim, you deserve it!).

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For more issues, visit our website or visit our archive for past issues.

Saturday, 21 May 2016

Membership Report - Specifier: April 2016

As we continue to promote CSC, the need for value in the construction industry is greater than ever. Since our last report in March, the Vancouver Chapter has picked up some momentum of interest and has increased by ten new members which bring our membership to 172.

Please help us to WELCOME 10 new members:


Mr. Laurence Matzek
Director of RoofStar Guarantee Program
RCABC Guarantee Corp.

Mr. Neil Hastie
Regional Manager,
Pacific National Concrete Accessories

Mr. Michael Venne
Commercial Consultant
Beaulieu Canada

Mr. Arthur Tseng
Bing Thom Architects

Mr. Jeffery Leech
Canadian Stone Industries

Mr. Daryl Muz
Architectural Specifications Mgr– AB & BC
PPG Architectural Coatings

Mr. Roland Jung
ABBARCH Architecture Inc.

Ms. Jaclyn Louie
Architect & Design Representative
Bay Resource Group

Ms. Megan Chalmers
Architect AIBC, AIA Intl.
ZGF Cotter

Mr. David W. Rock, CCCA
Construction Manager
EllisDon Corporation

For More Information on Membership:
Please contact Mario Maggio
Tel: 778-986-6058

Download the entire issue for this article and more.
For more issues, visit our website or visit our archive for past issues.

Thursday, 19 May 2016

Be Careful What You Wish For: When a Breach of 'Contract A' May not be Worth Contesting - Specifier: April 2016

The Alberta Court of Queen’s Bench has recently issued yet another Contract A/Contract B decision, but this one has an interesting twist to it. In Elan Construction Limited v. South Fish Creek Recreational Association (2015 ABQB 330), the Court confirmed, if not strengthened, what we already knew about the bidding process – that the Owner must evaluate all bids fairly, consistently and in accordance with the stated evaluation criteria and the reasonable expectations of bidders, and that exclusion clauses will not save the Owner when they have clearly departed from these obligations. However, despite successfully showing that the Owner breached these obligations for Contract A, the Contractor in this case learned that sometimes a win is not always a win.

What happened?

In 2010, South Fish Creek Recreational Association (“Fish Creek”), a collective group of non-profit sports and community associations, decided to move forward with a project to add 2 additional ice surfaces and a multi-purpose room to an existing recreation facility. The budget was approximately $19 million, and the Consultant (Quinn Young Architects) prepared an Invitation to Bid and Instructions to Bidders for the project. Only pre-qualified bidders were invited to bid, which included, among others, Elan Construction Limited (“Elan”) and Chandos Construction Ltd. (“Chandos”).

To alleviate Fish Creek’s concerns about roping itself into a project using a contractor with a shoddy reputation, the Consultant outlined four criteria in the Instructions that would form the basis of the bid evaluation: price, completion date, experience and references. Each category was assigned a specific number of points for evaluation purposes.

Ultimately, the project was awarded to Chandos, and Elan voiced its protest, claiming that the project was awarded based on criteria not disclosed in this evaluation matrix. As a result, Fish Creek found themselves heading to the courthouse for an alleged breach of Contract A.

The Court agreed with Elan, finding that Fish Creek did, in fact, significantly depart from the evaluation criteria outlined in the Instructions, specifically:

On completion date:

  • While the Invitation bolded August 1, 2011 as the desired substantial completion date, the Consultant internally split the points in this section between substantial completion date and date for completion of deficiencies. Then, he created a complex formula for awarding these points. He first excluded several bidders from the completion date analysis (one for being an ‘outlier’ from the rest of the dates, and others for unexplained reasons), and used the remaining dates to create an average completion date, which was used as a baseline for awarding points to the remaining bidders. The same analysis was applied to the points for the deficiencies completion date. None of this, the Court explained, was communicated to the potential bidders, and the Court held that the combination of all these actions actually worked against Elan, who reasonably assumed that the highest points would be awarded to those who could commit or come closest to the August 1 date.
On experience:
  • In awarding points, Fish Creek placed considerable weight specifically on arena building and LEED experience, though neither of these were referenced in the bid documents. 
  • Following submission of the bids, Fish Creek decided to conduct interviews with Elan and Chandos, though this requirement was not disclosed in the bid documents either. Adding further insult to injury, Elan was informed that the interview must take place on August 18, despite the fact that Elan’s site superintendent and project manager were unable to attend on those dates. 
  • And, just prior to the interview, Chandos substituted the site superintendent shown in its bid with a ‘ringer’ in the arena building department, and as anticipated, his references and qualifications proved quite charming to Fish Creek during the interview process. Given that amendments to the bids were only allowed prior to the bid closing date, the Court found this substitution to be a significant breach that could not be passed off as an ‘informality’ waived by the exclusion clauses in the bid documents.
Naturally, Fish Creek argued that their exclusion and privilege clauses in the bid documents were wide enough to provide a full defence to any breaches claimed by Elan, particularly because they required Elan to “waive any right to contest any legal proceedings regarding the decision of the Owner to award points under the criteria noted below.” However, the Court disagreed, and re-affirmed that such clauses do not detract from the Owner’s obligation to treat bidders fairly and to disclose all criteria that will be used to evaluate the bids.

As a result, the Court confirmed that Fish Creek did, in fact, breach Contract A. And, the surrounding facts clearly supported Elan’s claim that, but for Fish Creek’s breaches, Elan would have been awarded the contract for the project.

Before you pop the champagne…

Let’s hope that Elan read the Court’s decision from back to front, as it would have saved them from the inevitable letdown in the damages analysis undertaken by the Court. Anyone who has spent $100 at the fair throwing baseballs at milk jugs, only to be presented with a one-eyed stuffed bear as the prize, will have a taste of Elan’s bitter disappointment in this department.

Elan presented the Court with a ‘lost profit’ damage calculation using their historical figures, which supported a 5% profit margin on similar projects. Their lost profit on the project, they argued, was approximately $700,000.

But the Court reminded them that a damage award must place them in the same position as if the breach had not occurred. And what position would that be? Well: 
  • One of Elan’s listed subcontractors had actually underestimated the scope of work required, and on the evidence presented, the Court found that Elan would have been forced to absorb at least some of the cost associated with this error. 
  • Both Elan and Chandos had listed the same masonry and paving subcontractors in their bids. Chandos testified that it incurred additional cost on the project to replace both of these subcontractors (the former because they were deemed ‘too high risk’ to contract with, and the latter because they fell into receivership). The Court was persuaded that Elan could not have escaped these additional costs either. 
  • Chandos suffered severe losses due to unexpected weather conditions, as 2010 just happened to be an unusually cold and early winter in Calgary. Based on the evidence presented, the Court found that Elan would also have incurred these inevitable costs.
  • Finally, there were major delays on the project due to various unanticipated design issues, all of which proved costly for Chandos. Once again, the Court found no reason why Elan would have escaped similar costs of this nature. 
All things considered, Chandos provided evidence showing that it had actually suffered a substantial loss on the project, and the Court found that Elan, too, would have incurred a substantial loss as opposed to a profit had they been awarded the contract instead. So, while Elan celebrated its successful breach of Contract A claim, the celebration quickly turned sour when the Court awarded them nominal damages of $1,000. 

What can we learn from this?

Consultants should keep this case in mind when preparing bid documents and evaluating submitted bids. Specifying rigid evaluation measurements may prove dangerous, as the Courts will scrutinize these criteria closely to ensure the ‘integrity of the bidding process’ is upheld at all times. 

And while its unsettling to believe that you were treated unfairly during a bidding process, Contractors should put careful thought into the hypothetical outcome of the project had it been rightfully awarded to them. In other words, be careful what you wish for – you just might get it.

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For more issues, visit our website or visit our archive for past issues.

Tuesday, 17 May 2016

Words from the Chair - Specifier: April 2016

As I sit in my hotel room here in Drummondville, QC, I can’t help but miss the warmer weather to be had back home. I see snow piles remaining from a couple days ago, while at home we see tulips everywhere.

We are a little more than 1 month away from a departure flight to Halifax and I must say this is a trip I’m looking forward to. I’ve never been to Halifax, but I’ve heard this Chapter really knows how to throw a party. The Vancouver Chapter are looking forward to conference this year because we get a chance to host the Hospitality Suite on Thursday May 26th. Let’s show the National crowd what to expect for next year in Kelowna.

Please join us next month (May 12th) for our annual site tour taking place at the Marine Gateway project. This mixed use project is located on the new skytrain line to make for easy access. We will have lunch at the Dublin Crossing Pub (466 Marine Dr, Vancouver). After lunch Ryan Bragg (Lead Architect) and Joshua Rudd will take us on a tour of the project while explaining the project history and process.

On another note, registration is now available on our website for the annual Spec Golf tournament. We have changed date and venue this year. The tournament will be held on July 14th at Fort Langley Golf Course. Please register soon; this is a great chance to bring a customer out for a day of golf and network amongst your peers during the dinner and prizes night.

Download the entire issue for this article and more.
For more issues, visit our website or visit our archive for past issues.