Strategic Opportunities Committee - Communiqué 3

Positive Early Results from ORC’s Consultation with the Industry

According to a presentation at the Ontario General Contractors Association (OGCA) Symposium on April 11, 2008, consultation by the Ontario Realty Corporation (ORC) with the design and construction sector through the Strategic Opportunities Committee (SOC) is already generating positive results.

ORC is developing and implementing a new project services business model which it believes will result in better project outcomes and attract more interest from designers and builders in its projects by incorporating, wherever it can, elements that are more closely aligned with industry norms. Late last year ORC invited the industry to re-energize the SOC to facilitate industry input into its new model.

The Symposium provided an opportunity for ORC to present its vision for its new project services business model and to outline a number of important changes that it has already incorporated as a direct result of the SOC consultations. It also provided a forum to introduce the new leadership at ORC that is working though SOC to address concerns it has heard from the industry.

One early SOC result was ORC’s recent announcement of its intention to adopt the industry standard construction contract, CCDC 2, with a set of standard supplementary conditions to be developed in consultation with the industry. ORC Senior Vice President, Project Services Mike Greidanus reported to the Symposium that those consultations have quickly led to a draft of standard supplementary conditions which has been approval in principle by the OGCA Board. OGCA President Clive Thurston called the results “Phenomenal!” and went on to say “Recognizing that it is a dynamic document, I had absolutely no hesitation in taking it to our Board.”

Some details of the construction contract are still being worked out through the committee, after which the group’s attention will turn to a standard consultant contract. It is intended that it will be arrived at through a similar, collaborative process that will start by exploring the use of the Ontario Association of Architects (OAA) standard client/architect contract as its foundation. OAA President Sean O’Reilly has stated that “the progress made to date through the Strategic Opportunities Committee is very encouraging.” O’Reilly added, “It is refreshing to hear that ORC will be applying the same philosophy of standardization to the consultant agreement using the OAA’s Document 600 as a starting point.”

Another component of ORC’s new business model is the prequalification of general contractors and consultants onto a Vendor of Record (VOR) list. Greidanus outlined the online process that has been developed for prequalification, emphasizing that the process will be managed by ORC and that ORC will actually maintain the list. This initiative has also benefited from consultation through the SOC, for example by significantly reducing the amount of information which applicants must provide. Thurston noted that the ORC process generally follows the principles in the Guide to Prequalification of Contractors which is produced by the OGCA. The qualification process for consultants will be finalized next, and is expected to be very similar to that to be used for contractors.

ORC’s qualification process has a unique feature that has received very positive response from the industry. Typically, these lists of qualified businesses are closed once the initial process of qualifying is complete. ORC, however, intends to allow contractors and designers to apply at any time in the future to be added to its VOR list, a major benefit for new firms as well as for existing ones that would like to access a new market.

Among other changes listed by Greidanus were:

A re-engineered billing process to respond to complaints about delayed payments
Consistency across the province through the use of a single delivery model and the use of standardized processes and documents
Enhanced up-front planning on projects to provide greater certainty of budgets, schedules and other project outcomes, thereby minimizing disruptive changes during the project cycle

It was noted that an initiative has been put in place through SOC to help resolve issues on specific projects that contractors and designers are bringing to the attention of their respective associations.

The changes outlined in the ORC presentation drew positive response both during the presentation and at the ORC booth.

The SOC and ORC will be making a similar presentation during a workshop at the OAA’s annual conference on May 2, 2008. OAA Director of Policy Kristi Doyle reports “There is clearly a lot of interest in ORC and the progress being made at SOC – we already have over 60 people registered for this session.”

Work will continue on the detailed development of the new model, in consultation with the industry, over much of the balance of 2008.

The Ontario Realty Corporation is a crown corporation of the Government of Ontario and, as one of Canada’s largest real estate management companies, is a major customer of Ontario’s design and construction sector, initiating 2,000 to 2,500 projects annually worth approximately $350 million.

The Strategic Opportunities Committee (SOC) was initiated in 2004 and re-energized in 2008 at the invitation of ORC President and CEO David Glass to facilitate constructive consultation between ORC and the design and construction industry. Participants in this standing liaison committee include Consulting Engineers of Ontario, the Ontario General Contractors Association, the Ontario Association of Architects and the Association of Registered Interior Designers of Ontario, as well as ORC itself. The Committee currently has three working groups focusing on standard contracts; prequalification, evaluation and procurement; and, improvements to ORC’s project management outsourcing model.