No. 19/005 – November 12, 2019

Background: 

On October 21, 2019 CEO informed InnServices of its concerns with multiple clauses contained in RFP No. P-19-CWW251- Engineering Services for Sewage Pumping Station # 4 Upgrades. InnServices issued a subsequent addendum that addressed CEO’s concerns pertaining to the Section 8.01 Supplier Indemnity clause.  The revised language includes terms for negligence-based indemnification. While CEO recognizes and appreciates this revision, InnServices did not address the other issues brought to its attention.

CEO’s Position:

CEO has identified the following additional clauses of concern that have not been addressed:  

• 2.01 Lack of Reciprocal Indemnity

CEO highlights that this clause does not provide for reciprocal indemnity from InnServices to the Consultant. CEO expressed that such expectations were not reasonable and did not reflect a balanced approach to indemnification that should be applied to public infrastructure projects in Ontario, therefore CEO recommended that this clause be removed.

• 3.05 Responsibility of Supplier 

This clause establishes the Consultant’s liability for the conduct of its directors, officers, employees, agents, partners, affiliates, volunteers and subcontractors without limiting the liability to negligent acts or omission. CEO informed InnServices that Consultants cannot be appropriately insured and bear the liability for “…all damages, costs, expenses, losses, claims or actions arising from any breach of the Contract resulting from the actions of the above-mentioned individuals and entities” unless these provisions are the result of negligent errors or omissions. CEO proposed that the clause be amended so as to facilitate the Consultant’s ability to secure the required insurance.

• 4.02 Deliverables Warranty
  

CEO informed InnServices that this clause was more applicable to an equipment/material supply contract and not appropriate for a Professional Services contract. CEO recommended that this clause be removed. CEO also noted that any clauses addressing deliverables for professional services should not be subject to revision of work based on a broad “opinion” of InnServices. CEO further recommended that the following language be inserted into clauses that address deliverables and potential rectification: “Any rectification notice must have reasonable request for corrections referencing the original scope of work, the Contract, Industry Standards, and/or Requirements of Law”.   

• 6.05 Injunctive and Other Relief
  

It is CEO’s position that it is unreasonable and unacceptable for Consultants to abide by InnServices’ ability to arbitrarily “obtain” injunctive relief without any proof of damage. CEO recommended that this clause be amended to state that “…InnServices is entitled to seek injunctive relief…” upon the basis of proven damage.

Conclusion:

Members who have bid on Request for Proposal No. P-19-CWW251- Engineering Services for Sewage Pumping Station # 4 Upgrades should be aware that while InnServices has updated its indemnification clause with negligence-based language, there are still several areas of concern in the contract.

CEO encourages member firms to refer to the commentary above when bidding on current and future projects with InnServices and continues to recommend a thorough review of all RFP and contract documents.

Should you have any questions about this bulletin, our Rapid Response Service or any other industry issue, please contact David Zurawel at [email protected] or 416.620.1400 ext. 222 or Catherine Morrison, (416) 620.1400 Ext. 226 or via email [email protected].

No. 19/006 – November 11, 2019

 Issue:

Consulting Engineers of Ontario (CEO) is advising members to use caution and consult their insurance and legal counsel before submitting project proposals to the Town of Bradford West Gwillimbury. CEO recently proposed amendments for the Town’s Request for Proposal No. P-19-64- Professional Engineering Consulting Services for the Bradford Water Pollution Control Plant Reviews and Upgrades Project. The Town has yet to respond to our concerns. Consequently, member firms considering future RFP submissions are advised that some terms and conditions will be very difficult, if not impossible, to adequately insure through our industry’s insurance providers.

CEO Position:

CEO strongly believes that having fair, insurable agreements attracts more positive interest from the consulting engineering industry and leads to better project outcomes for clients.  

Provisions in the Town’s RFP create five significant areas of caution for Consultants:

• Section 4.02 Deliverables Warranty appears to be applicable to an equipment/material supply contract, as such its inclusion in a Professional Services contract is not appropriate as it contains language that exceeds a reasonable Standard of Care.
  
  

CEO informed the Town that provisions such as “shall be free from defects in material, workmanship and design” go beyond a Consultant’s standard of care. CEO also noted that this language, and the inclusion of “Warranty” in the title of the clause imply an unattainable standard of perfection and recommended it be removed. CEO also informed the town that clauses addressing deliverables for professional services should not be subject to revision of work based on a broad “opinion”.  CEO recommended that the following alternative language be used to address deliverables: “Any rectification notice must have reasonable request for corrections referencing the original scope of work, the Contract, Industry Standards, and/or Requirements of Law”.   

• Section 6.05 Injunctive and Other Relief allows the Town to arbitrability obtain injunctive relief
  
  

CEO believes strongly that the requirement for the Consultant to abide by the ability for the Town to arbitrarily “obtain” injunctive relief without any substantial evidence of damage is unreasonable and unacceptable. CEO recommended that the clause be amended to state that owners are entitled to seek injunctive relief upon the basis of proven damage.

• Section 8.01 Consultant Indemnity establishes a one-sided indemnity and is not limited to a Consultant’s negligence acts, errors, and omissions.
  
  

As written, this indemnification clause does not require the Town to provide any obligation of indemnification for any acts that would cause harm/damage to the Consultant. CEO also informed the Town that requiring Consultants to indemnify and hold harmless the “Indemnified parties from and against any and all [Claims]” is a problematic requirement when not expressly tied to a Consultant’s negligence.

• Section 8.01 Consultant Indemnity requires Consultants to indemnify vaguely defined parties who may not be under the care and control of Consultants.
  
  

CEO informed that Town that the inclusion of indemnified parties such as “independent contractors” is not reasonable as Consultants cannot be expected to assume any liability for any damages or delays caused by parties outside of their control or responsibility. CEO also noted that the provision “or otherwise in connection with, the Contract” further aggravates this condition by creating a vaguely defined liability that would include parties that are outside of the Consultant’s control or responsibility. CEO proposed that the Town omit both of the aforementioned terms so as to establish a reasonable limitation of liability for the Consultant. 

• Section 8.01 Consultant Indemnity subjects Consultants to undue penalties for unreasonable damages.
  
  

The clause creates an expectation that Consultants “…indemnify and hold harmless the Indemnified Parties for any incidental, indirect, special or consequential damages…”. CEO advised the Town that these types of damages are very often difficult to accurately quantify, and as such are prone to create a liability to be borne by the Consultant that is disproportionate to the risk inherent to the services they are contracted to provide. 

Conclusion:

CEO encourages members to make project decisions on a case-by-case basis, having carefully reviewed the terms and conditions and considered the merits of individual assignments.  Consult with your insurance and legal counsel before accepting any questionable agreement terms; and should you experience difficulty, contact CEO and make use of our contract Rapid Response Service.  CEO staff will work with you to assess the problem and where possible develop an industry position addressing your concerns that we will use to advocate on your behalf to try and achieve necessary change.

Should you have any questions about this advisory, our Rapid Response Service or any other industry issue, please contact David Zurawel at [email protected] or (416) 620.1400 ext. 222 or Catherine Morrison at [email protected] or (416) 620-1400 ext. 226.

No. 19/008 – November 8, 2019

Issue

On October 1^st, 2019 the prompt payment and adjudication provisions of Ontario’s Construction Act (“the Act”) came into effect. The Ontario Dispute Adjudication for Construction Contracts (“ODACC”), also known as the Authorized Nominating Authority (“ANA”) under the Act, has published its pre-designed adjudication processes, timelines and fees as this final phase of the Act comes into force. CEO is encouraging member firms to carefully read the summary below on the adjudication processes and the related timelines and fees.  Full details on the adjudication regime are available on the ODACC website. CEO is strongly urging member firms to familiarize themselves with the details of the adjudication process and to understand the obligations that now exist under the new law.

Adjudication

The adjudication process is intended to resolve construction disputes outside of the courts or alternative dispute resolution processes in a timely fashion, as the project is being completed, and to keep money flowing through the construction pyramid. It provides for the Adjudicator to render a determination a maximum of 30-days after receiving the documents of the party referring the matter to adjudication, unless both parties agree to an extension. The scope of issues that can be adjudicated are limited to; valuation of services, payment (including changes orders or proposed change orders), notices of non-payment, claims for set-off (against liens or trusts), payment or non-payment of holdback, and other disputes to which parties agree.

While the Adjudicator has the discretion to conduct adjudications in the manner he or she determines is appropriate for the circumstances, the ODACC has prepared the following four pre-designed Adjudication Processes to:

• allow Parties to have a sense of the anticipated cost to adjudicate their dispute;
• allow Parties to have some input into the Adjudicator’s decision regarding the design of the appropriate process;
• help Adjudicators to ensure that the cost of the process is proportionate to the amount in dispute; and
• minimize disputes between Parties and the Adjudicator that could arise over fees.
  
  
• Pre-Designed Adjudication Process #1 (Two-Page Written Adjudication):
  
  

Adjudication in writing only, with the submissions of Parties’ arguments and photographs limited to two (2) pages per Party (not including a copy of the construction contract and disputed invoice, both of which must be submitted); and the adjudicator’s determination is expected to be approximately one to two (1-2) pages.

• Pre-Designed Adjudication Process #2 (Five-Page Written Adjudication):
  
  

Adjudication in writing only, with the submissions of Parties’ arguments and photographs limited to five (5) pages per Party (not including a copy of the construction contract and disputed invoice, both of which must be submitted); and the adjudicator’s determination is expected to be approximately one to two (1-2) pages.

• Pre-Designed Adjudication Process #3 (Five-Page Written Adjudication plus Ten Pages of Documents):
  
  

Adjudication in writing only, with the submissions of Parties’ arguments and photographs limited to five (5) pages per Party (not including a copy of the construction contract and disputed invoice, both of which must be submitted); Each Party may submit additional documents, parts of documents and witness statements to a maximum of ten (10) pages; and the adjudicator’s determination is expected to be approximately five (5) pages.

• Pre-Designed Adjudication Process #4 (Oral Webcast Adjudication, Ten Page Submissions and Documents):
  
  

Submission of Parties’ arguments and photographs is limited to ten (10) pages per Party (not including a copy of the construction contract and disputed invoice, both of which must be submitted); Each Party may submit additional documents, parts of documents, and witness statements to a maximum of 25 pages (in total); Each Party has half an hour to make an oral presentation; Presentation can be conducted by videoconference or teleconference (but will not be in person); and Determination is expected to be approximately five (5) pages.

An important aspect of these pre-designed processes is that they all allow for submission of disputed contracts and invoices. This puts an increased significance on the wording and language used in parties’ contracts and invoices at all levels of a project. CEO is encouraging member firms to work with project clients to have included in their contracts the terms and conditions necessary to accommodate the processes and timelines required to facilitate the proper execution of their professional services according to the new system.  Equally important, CEO is encouraging member firms, if they have not already done so, to review and modify their internal document management and information systems.  The nature and tight timelines of the adjudication process will require firms to modify current protocols so that project-relevant information such as proposals, agreements, drawings, invoices, emails, notes and memos can be produced and shared in a timely fashion.  A firm’s success at adjudication will chiefly be driven by having on-hand fact-based evidence.

Timelines

The ODACC has also published several suggested adjudication timelines based on the Act. All four pre-designed adjudication processes have the same first four suggested steps (with some slight deviations depending on the selected process). Each timeline begins with the appointment of an adjudicator:

• Day 1: The adjudicator is selected by the parties or appointed by ODACC.
  
  
• Day 5: Claimant sets out its position, provides a copy of the construction contract and disputed invoice, and supplies any documents that it intends to rely on
  
  
• Day 7: The adjudicator determines the balance of the adjudication process and communicates that to the parties, including the respondent’s deadline to respond to the claimant’s submission
  
  
• Day 12: The respondent submits a response

Following these first stages of each adjudications process, the remaining steps are suggested as follows (determined by the nature of the pre-designed processes):

• Pre-designed Adjudication Processes 1-3 all require an adjudicator’s Draft Determination to be provided to ODACC on Day 20.
  
  
• Pre-designed Adjudication Processes 4 requires an oral hearing on Day 18 followed by the adjudicator’s Draft Determination to be provided to ODACC on Day 25.
  
  

Unless an extension is granted, having been agreed to by the parties to the adjudication, the entire adjudication process for all pre-designed options state that a decision will be released by ODACC 35 days after an adjudicator is appointed pursuant to the requirements in the Act. Please visit the ODACC website for additional timeline details.  

Fees

The adjudication process comes with associated Adjudication Fees that may be agreed upon by the Claimants, Respondents and Adjudicator. In the event that the Parties and Adjudicator are not able to agree upon the fee, the ODACC has set the following Adjudication Fee structure: 

Adjudication Fee, if Parties and Adjudicator Do Not Agree on the Adjudication Fee

Please see the ODACC website for additional information on Adjudication Fees, Adjudication Referral Fees, Certification Fees, and Adjudicator Appointment Fees. 

What this means for CEO Members

The adjudication process is expected to help resolve disputes for any construction procurements that commenced as of October 1, 2019. Now that different adjudication processes have been clearly established, CEO expects to see an eventual increase in disputes using this system as parties learn to apply and respond to the new rules. CEO members should prepare and familiarize themselves with the adjudication processes, timelines, and fees.

Conclusion

For more information on Adjudication Processes, Timelines and Fees, please visit the ODACC website at www.odacc.ca. Should you have any questions about this bulletin, please contact David Zurawel at [email protected] or 416.620.1400 ext. 222 or Catherine Morrison, (416) 620.1400 Ext. 226 or via email [email protected].

No. 19/005 – September 26, 2019

Issue:

It has been brought to CEO’s attention that some municipalities are using outdated versions of the MEA/CEO Client/Engineer Agreement for Professional Consulting Services (“MEA/CEO Agreement”), or are altering the copyrighted document and/or falsely presenting their own terms and conditions as the MEA/CEO Agreement. These alternate versions of the Agreement are in violation of copyright and can contain uninsurable and unacceptable terms and conditions. CEO is advising member firms to use caution and carefully review anything that appears to be the MEA/CEO Agreement that is contained in municipal assignment documents.

CEO Position:

It is CEO’s position that municipalities should not be procuring professional services under the guise of the MEA/CEO Agreement if the terms and conditions have been altered. Member firms should not accept any terms and conditions or sign any municipal contracts presented as the MEA/CEO Agreement before reviewing the language against the official document.

CEO has updated the MEA/CEO Agreement to a fillable field format that enables consultants and municipalities to customize the agreement for individual projects and to easily make necessary changes through supplementary conditions. To view the up to date Agreement, please click here. Please note that CEO will be updating the MEA/CEO Agreement to conform with the upcoming changes to the Construction Act.

Conclusion:

While the misuse and misrepresentation of the MEA/CEO Standard Agreement in municipal assignment documents may not be widespread, CEO is notifying member firms to be cautious as they could potentially be accepting unreasonable and/or uninsurable terms and conditions.  Should you encounter an altered version of the MEA/CEO Standard Agreement, CEO is encouraging member firms to contact their insurance provider, legal counsel and us to make use of our contract Rapid Response Service.

Should you have any questions about this advisory, the MEA/CEO Standard Agreement or any other industry issue, please contact David Zurawel at [email protected] or (416) 620.1400 ext. 222 or Catherine Morrison at [email protected] or (416) 620-1400 ext. 226.

No. 19/006 – September 19, 2019

Issue:

Since 2015, CEO has identified the Certificate of Recognition (COR™) as an emerging issue requiring the attention of the Consulting Engineering industry. Public sector clients are increasingly expecting Consultants and professional service providers to be COR™ registered or certified as a requirement to qualify for their project assignments. While COR™ was initially developed for contractors and subcontractors, the market is evolving to use COR™ as a risk management tool to vet proponents based on their commitment to a quality occupational health and safety management system. The philosophy behind the requirement of COR™ for Consultants bidding on public work is continuing to spread throughout provincial and municipal procurement systems across the province.

Most notably, Infrastructure Ontario, Metrolinx, the City of Toronto, Toronto Transit Corporation, City of Brampton, and Town of Milton all have COR™ requirements for professional services proponents. The number of participating public sector clients is expected to continue to grow.

Background:

Introduced to Ontario in 2011, COR™ became a requirement for contractors and sub-contractors working on provincial government and agency projects. As a health and safety management system, COR™ is aimed to reduce the human and financial costs associated with workplace incidents and injuries and provides a foundation to develop, monitor, and advance a firm’s health and safety as well as mitigate risk.

As COR™ continues to integrate into the Ontario marketplace, there has been a clear desire from public clients to have both their Contractors and Consultants aligned with the same safety culture, and as such they have decided to make COR™ registration and/or certification a requirement for Consultants within their RFPs.

Conclusion:

Member firms can expect to see an increased requirement to be COR™ registered and/or certified in more public sector RFPs. Consulting Engineers need to consider and anticipate the growing public sector client requirement to be COR™ certified/registered. Please see the attached background document for more detailed information on COR™ in the Consulting Engineering industry.

For information on your role as Consultant and the COR™ certification process please contact David Zurawel at 416-620-1400 ext. 222 or Catherine Morrison at 416-620-1400 ext. 226.

No. 19/003 – September 10, 2019

Background: 

On August 23, 2019 CEO informed the City of Ottawa of our industry’s concerns with the Indemnification clause, and other clauses related to standard of care for Consultants, within its RFP for a Solid Waste Master Plan (RFP No. 19419-91843-P01). The City promptly responded to CEO offering to issue an Addendum permitting respondents to propose amendments to the City’s General Terms and Conditions for consideration during the Negotiations stage of the evaluation process.

Currently, the City is reviewing the in-depth comments and feedback provided by CEO member firms. CEO appreciates the City’s flexibility and willingness to negotiate important conditions such as those within this RFP.

CEO’s Position:

CEO has highlighted the following issues of concern in the identified clauses:  

• 5.2. Indemnification

It is CEO’s position that this clause compromised the Professional Liability insurance coverage that CEO member firms are required to carry. The clause as presently written compromises CEO members’ ability to obtain appropriate coverage. CEO proposed that the City amend its current indemnification clause to reflect negligence-based indemnification.

• 2.2.4. Conduct of Work
  

Section 2.2.4 under Conduct of Work required that the Consultant’s work “…be free from any defect in manufacture, material and workmanship”. CEO noted that this provision created an unattainable standard of perfection for Consultants to achieve. Further, CEO proposed that the City strike the “warranty” provision in this clause. CEO informed the City that Professional Liability policies expressly exclude warranties for professional services as their inclusion creates an unrealistic and unachievable standard. 

• 2.22.1. Staff and Methods
  

Section 2.22.1 under Staff and Methods required Consultants to “perform the Work to a professional standard in accordance with current “best practices”. CEO informed the City that the term “current best practices” is relative, subjective, vague and should be altered to read as “current industry standard practices” to accurately capture the professional standard to which Consultants are accountable.

• 7.0. Quality Control of Services and Deliverables
  

It is CEO’s position that Section 7.0 Quality Control of Services and Deliverables also elevated a Consultant’s standard of care by requiring “high quality deliverables”. CEO recommended that the City removes the term “high”. Further, CEO also held the position that the “the expectation is that all deliverables, including drafts, are to be free of errors, contradictions and spelling mistakes” is broad and a potential risk for undue liability. CEO recommended that this provision be qualified by negligence.

Conclusion:

Members who have bid on Request for Proposal No. 19419-91843-P01- Solid Waste Master Plan should be aware that the City will be open to negotiations at the evaluation stage of this bid document. CEO encourages member firms to refer to the commentary above when negotiating with the City of Ottawa and continues to recommend a thorough review of all RFP and contract documents by member firms for their projects, even in instances where there are multiple projects with the same client.   

Should you have any questions about this bulletin, our Rapid Response Service or any other industry issue, please contact David Zurawel at [email protected] or 416.620.1400 ext. 222 or Catherine Morrison, (416) 620.1400 Ext. 226 or via email [email protected].

No. 19/004 – August 1, 2019

ISSUE

On July 18th 2019, the Ministry of the Attorney General announced the appointment of ADR Chambers Inc. to act as the Authorized Nominating Authority (ANA or the “Authority”) to administer Ontario’s adjudication regime under the Construction Act. The Authority will oversee the adjudication process for construction disputes, including the training and qualification of adjudicators. This appointment brings Ontario one step closer to the full implementation of the Act. This is expected to take place on October 1, 2019 with the proclamation of the regulations enabling the new prompt payment and adjudication regimes.

ADR Chambers Inc. delivers alternative dispute resolution services across a broad range of sectors and industries. Based on the provisions of the Construction Act, the Authority will be responsible for, among other things:

• Creating a website to enable parties to learn about adjudication and access services
• Providing a public registry of adjudicators
• Developing and overseeing training programs for adjudicators
• Qualifying individuals who meet the prescribed requirements as adjudicators
• Maintaining a fee schedule, a code of conduct, and a complaints procedure
• If requested by the parties, appointing an adjudicator to a dispute from a roster which it will maintain
• Publishing educational materials regarding the adjudication process and an annual report

The Authority will operate independently of government and will be self-funded. Preparations are currently underway for regular operations and an adjudication website is being developed that will include information about the Authority’s process for qualifying as an adjudicator.

WHAT THIS MEANS FOR CEO MEMBERS

The long-awaited appointment of the ANA clears the way for the government to proceed with its proclamation of regulations to bring in to force Ontario’s prompt payment and adjudication regimes on October 1, 2019. However, with just two months remaining before this deadline, much work remains to be done.

Before the first adjudication can take place the ANA must first establish, publish and recruit adjudicator candidates from qualifications criteria. The intake process and architecture needs to be created and operationalized, facilitating their selection, training and certification. Only once this is in place and properly functioning can a functional and accountable roster of available adjudicators be made available to the public. Supporting this is the need for an enforceable code of conduct and oversight process.

Last, but certainly not least, the ANA must develop fees for adjudication services. Much speculation remains about what adjudication fees will be and how they will be established. Certainly, the spirit of the law is a motivated by the principle of dispute resolution addressed in real time, reasonably, as projects continue. The emphasis is on avoiding the lengthy and costly process of going to court. With that in mind, general consensus among industry stakeholders is that adjudicators will operate under a reasonable daily fee. The question that remains is what that fee will be and what process will be used to establish that fee. It is not unreasonable for Ontario’s infrastructure sector to expect the ANA to hold meaningful public consultations on how that fee will be set.

A lot remains to be achieved in a short span of time. While adjudication notices are not expected to start flowing immediately following the October 1st implementation date of the new regime, it is not unreasonable for the infrastructure sector to expect that this system would be in place and functional in time for the enabling regulations to come in to force. CEO is continuing to actively pursue information on this issue and where possible shape the creation and implementation of as efficient and effective an alternative dispute resolution system as possible.

CONCLUSION

Should you have any questions about this bulletin, please contact David Zurawel at [email protected] or 416.620.1400 ext. 222 or Catherine Morrison, (416) 620.1400 Ext. 226 or via email [email protected]

No. 19/004 – August 29, 2019

Issue:

Consulting Engineers of Ontario (CEO) is advising members to use caution and consult their insurance and legal counsel before submitting project proposals to the United Counties of Prescott Russell. CEO recently proposed amendments for Prescott Russell’s Request for Proposal No. PW2019-25 to improve Section A. Information for Bidders, Section 15. Liability Insurance, Section B. General Conditions, Section 13. Representations, Warranties and Conditions, and Section C. Project Information and Terms of Reference, Section 6. Health and Safety and Section 8. Liquidated Damages/Penalties. Prescott Russell acknowledged CEO’s comments but has not modified its terms and conditions. Consequently, member firms considering future RFP submissions are advised that some terms and conditions will be very difficult, if not impossible, to adequately insure through our industry’s insurance providers.

CEO Position:

CEO strongly believes that having fair, insurable agreements attracts more positive interest from the consulting engineering industry and leads to better project outcomes for clients.  

The provisions in Prescott Russell’s RFP creates six significant problems for CEO members:

• Section A. Information for Bidders, Section 15. Liability Insurance contains several insurance extensions that are unreasonable to require from Consultants.
  

The requested Commercial General Liability insurance extensions under Sub-Section I include the “Removal or weakening of support of any property, building, or land, whether such support is natural or otherwise”, “use of explosives for blasting”, and “vibration from pile driving, or caisson work…”. CEO noted that it is unreasonable to require Consultants to obtain extensions that are intended and only available to contractors who have exposure to these particular risks. These provisions are not typically found in a Consultant’s Commercial General Liability policy, and CEO requested that they be removed.   

• Section 15, Sub-Section III regarding Professional Liability Insurance states that “…the Corporation shall be added as an additional Insured…”.

In this context, the Corporation (also known as Prescott Russell) would be considered a third party, and a Consultant’s professional liability policy will not cover third parties, as such CEO requested that this provision should be removed.

• Section 15, Sub-Section g. of the clause includes “fines” as an item for which the Consultant must indemnify the United Counties. 

A Consultant’s Professional Liability insurance will not provide insurance for broad and undefined items such as “fines”. CEO recommended that this term be removed.

• Section B. General Conditions, Section 13. Representations, Warranties and Conditions creates an obligation for the Consultant’s work to “…be free of defects in workmanship and materials…”.
  

This requirement goes beyond a Consultant’s reasonable standard of care. The language used and the inclusion of “Warranties” in the title of the clause imply an unattainable standard of perfection for the Consultant to achieve. Further, the clause inappropriately required that the Consultant’s services must be performed in a “professional and worker like manner by personnel”. CEO noted that this statement is highly subjective and as such it is not reasonable to require Consultants be contractually obligated to such a condition. CEO recommended that Prescott Russell replace its clause with language that appropriately captured the Consultant’s Standard of Care.

• Section C. Project Information and Terms of Reference, Section 6. Health and Safety contains provisions that do not apply to Consultants.

CEO supports Work Place Health and Safety however, it is our firm belief that these responsibilities should be assumed by the appropriate party as stipulated by current statute.  Ontario’s Occupational Health and Safety Act states that such responsibilities are to be assumed by the party exercising care and control over the project. It also states that no party can contract out of or contractually assume these responsibilities.  CEO has proposed that the United Counties replace its current Health and Safety clause.

• Section 8. Liquidated Damages/Penalties subjects Consultants to undue penalties for unreasonable damages.

CEO informed Prescott Russell that liquidated damages are an inappropriate instrument to be applied to professional services. By not linking these particular damages to a Consultant’s negligence, Consultants could be subject to undue and uninsured penalties for unreasonable damages. This clause is uninsurable, creates punitive measures for delays and was recommended to be removed.

Conclusion:

CEO encourages members to make project decisions on a case-by-case basis, having considered the merits of individual assignments.  Consult with your insurance and legal counsel before accepting any questionable agreement terms; and should you experience difficulty, contact CEO and make use of our contract Rapid Response Service.  CEO staff will work with you to assess the problem and where possible develop an industry position addressing your concerns that we will use to advocate on your behalf to try and achieve necessary change.

Should you have any questions about this advisory, our Rapid Response Service or any other industry issue, please contact David Zurawel at [email protected] or (416) 620.1400 ext. 222 or Catherine Morrison at [email protected] or (416) 620-1400 ext. 226.

No. 19/002 – June 11, 2019

Issue Background: 

CEO is pleased to announce that York Region has made an amendment to RFP No. P-19-99- Site Coordination and Inspection Services for Highway 27 CPR Bridge Replacement and Road Widening from Martin Grove Road to Rutherford Road based on recommendations proposed by our Rapid Response Team.

On May 30, 2019 CEO brought to the Region’s attention our industry’s concerns with the Record of Engineer clause. The Region promptly responded providing an extension on the RFP’s closing date to allow for a review of the issue and our proposed solution. On June 6^th, the Region published an Addendum incorporating our proposed amendments, fully addressing CEO’s concerns. CEO appreciates the Region’s prompt action.  

York Region’s Amendments:

On June 6^th, York Region’s Director, Procurement Office, Jerry Paglia informed CEO that the following clause under Section 6.3.4 would be replaced:

Record of Engineer

The Site Coordinator shall provide written and sealed confirmation that the Construction Project has been completed in accordance with the Project Plans.

CEO highlighted the following concerns with the clause:

• The use of an engineer’s seal is governed by Professional Engineers Ontario under the Professional Engineers Act. CEO explained that a client request for a document to be sealed is not sufficient reason for doing so. It is the nature of the work and the nature of the document that determines whether the seal must be used.
  
  
• CEO noted that even with a full-time inspector on site, it is not possible for Consultants to see every element of a Construction phase. Additionally, the language appeared to create a guarantee of services and work which is outside of the care and control of Consultants.
  
  
• CEO also pointed out to the Region that the requirement, as originally worded, transferred a considerable amount of liability to Consultants and was inconsistent with the purpose of a Quality Assurance inspection.  The implied guarantee would compromise a Consultant’s professional liability coverage and therefore represented an uninsurable risk.
  
  

In accordance with CEO’s recommendations, the Region replaced the language in the RFP as follows:

Record of Engineer

 The Record of Engineer shall be a Professional Engineer who shall, upon completion of construction, provide written and signed confirmation that the Construction Project has been completed in general conformance with the Project Plans and approved amendments.

Municipalities like York Region that have actively worked with the industry to achieve mutually beneficial terms are catalysts for positive change in a market that is becoming increasingly challenging to navigate. CEO’s efforts to develop balanced and reasonable professional services agreements becomes most effective when working with productive actors, such as York Region. CEO and its member firms appreciate the steps taken by York Region to address our concerns and improve this RFP.

Should you have any questions or concerns regarding this communiqué or this particular RFP please contact David Zurawel, (416) 620.1400 Ext. 222 or via email [email protected] or Catherine Morrison, (416) 620.1400 Ext. 226 or via email [email protected].

No. 19/002 – April 24, 2019

Issue:

CEO is bringing to members attention the Town of Collingwood’s Request for Proposal No. FIN 2019-019P- Engineering Services to complete an Amendment to the Class Environmental Assessment for the Expansion of the R.A. Barker Water Treatment Plant. While this RFP has closed, CEO’s Rapid Response service has brought to the Town’s attention some particular issues of concern.

Background:

In its letter issued to the Town on April 10th, 2019, CEO highlighted some concern with Section 37. Injunctive and Other Relief and Section 45. Supplier Indemnity within the RFP.

In their response, Town staff informed CEO that this specific bid document is a non-binding negotiable RFP which allows for a period of negotiation prior to award of the contract. During negotiations, the highest ranked bidder can negotiate and discuss the clauses of concern.

CEO’s Position:

CEO has highlighted the following issues of concern in the identified clauses:

Section 37. Injunctive and Other Relief

It is CEO’s position that the requirement for the Consultant to abide by the Town’s ability to arbitrarily “obtain” injunctive relief without any proof of damage is unreasonable and unacceptable. CEO requested that this clause be amended to state that “…the Town is entitled to seek injunctive relief…” upon the basis of proven damage.

Section 45. Supplier Indemnity

It is CEO’s position that the broad nature of this clause creates a challenge to the professional liability insurance coverage that CEO member firms are required to carry.

The current clause includes a list of indemnified parties including “independent contractors” who, in many circumstances, may not be under the control of the Consultant. In addition, the term “or otherwise in connection with, the Contract” creates a vaguely defined liability that could include parties that are not under the Consultant’s control or responsibility. CEO recommended that the Town omits both of the aforementioned terms in order to accurately capture the parties of whom Consultants are responsible over as per their insurance policies.

The clause also required Consultants to “…indemnify and hold harmless the Indemnified Parties for any incidental, indirect, special or consequential damages…”. CEO informed the Town that damages such as these, including consequential damages, very often cannot be accurately quantified, and are disproportionate to the liability of the Consultant.

CEO proposed that the Town replace its current indemnification provisions with the clause found in the current version of the MEA/CEO Client/Engineer Agreement for Professional Consulting Services.

Conclusion:

Members who have bid on RFP No. FIN 2019-019P- Engineering Services to complete an Amendment to the Class Environmental Assessment for the Expansion of the R.A. Barker Water Treatment Plant should be aware that the Town will be open to negotiations going forward on this specific bid document. CEO encourages members to refer to the commentary above when negotiating with the Town of Collingwood and continues to advise all members to thoroughly review all RFP and contract documents for their projects, even in instances where there are multiple projects with the same client.

Should you have any questions about this bulletin, our Rapid Response Service or any other industry issue, please contact David Zurawel at [email protected] or 416.620.1400 ext. 222 or Catherine Morrison, (416) 620.1400 Ext. 226 or via email [email protected].

No. 19/001 – January 25^th, 2019

Issue Background:  

CEO is pleased to announce that the Municipality of Chatham-Kent has revised their standard Request for Proposals document based on CEO’s recommendations.

CEO, supported by its Rapid Response Team, wrote to the Municipality on November 8^th, 2018 detailing our concerns and subsequently issued an advisory to members on January 21^st, 2019. The Municipality responded to CEO on January 22^nd, 2019 advising that they have reviewed and updated their standard RFP document to incorporate our recommended amendments. CEO appreciates the Municipality’s prompt action.   

The Municipality of Chatham-Kent’s Revisions:

On January 22^nd, the Municipality of Chatham-Kent’s Solicitor, David Taylor, wrote that the Municipality has removed specific CGL (Commercial General Liability) terms, revised language regarding lapsing insurance policies, and modified the previous indemnity wording in their standard RFP contract, as per CEO’s recommendations.

The Municipality updated its standard RFP document to specifically address CEO’s following concerns:

• Section 6.8.1, Sub-Section b., included a detailed list of specific items for which the Municipality is requiring the Consultant to provide insurance.

• Section 6.8.4 of the clause stated “The policies shall be endorsed to provide that the policy or policies will not be altered, cancelled or allowed to lapse” however, insurers will not provide notice of policies that are altered or allowed to lapse.
  
  
• The obligations imposed by Section 6.9 Indemnification further compromised professional liability insurance coverage.

Municipalities such as Chatham-Kent that actively work with the industry to achieve mutually beneficial terms are catalysts for change in a market that is becoming increasingly difficult to navigate. CEO’s efforts to develop balanced and reasonable professional services agreements becomes most effective when working with productive actors, such as the Municipality of Chatham-Kent.

Should you have any questions or concerns regarding this communiqué or this particular RFP please contact David Zurawel, (416) 620.1400 Ext. 222 or via email [email protected] or Catherine Morrison, (416) 620.1400 Ext. 226 or via email [email protected].

On Thursday November 15th, Finance Minister Vic Fedeli rose in the Legislature to deliver the Ontario PC government’s first Fall Economic Statement (FES). This highly anticipated event is second only to the provincial budget in terms of the attention paid to the Minister and the Ministry of Finance every year. The budget and the FES are the two pivotal points to providing a window into the province’s finances and how funding decisions are often made.

Read more.

Issue: Doug Ford, Ontario’s 26^th Premier, was sworn in along with his cabinet at Queen’s Park today by Lieutenant Governor of Ontario, Elizabeth Dowdeswell.

Consisting of 21 ministers, 7 women and 14 men, the Ford cabinet is 25% smaller than the 28 member executive council of Kathleen Wynne.  The new cabinet reflects a good cross section of Ontario, representing urban and rural constituencies from all regions of the province.

Read more.

ISSUE: Consulting Engineers of Ontario (CEO) is advising members to use caution and consult with their insurance partners and legal counsel before submitting an application to Infrastructure Ontario’s (IO) Request for Proposals RFP No. 18-013: Vendor of Record (VoR) for Engineering (Civil; Mechanical; Electrical; Structural) and Technical (Environmental and Building Sciences) Services Annual Refresh.
Members need to be aware that enrollment in the VoR involves two different sets of indemnification terms and conditions. This raises problems for member’s ability to obtain adequate professional liability insurance for assignments that will come from being on this roster.

The first set of terms and conditions are part of the Master Agreement between the Agency and the “Qualified Engineer”.

Read more.

Issue: Consulting Engineers of Ontario (CEO) is advising members to use caution and consult their insurance and legal counsel before submitting project proposals to the City of Hamilton, specifically with regards to their standard indemnification clause.   CEO has discussed the issue of indemnification in the past through a number of meetings with procurement, risk management and legal staff at the City with some acknowledgement on their side that they would entertain some modifications to the clause. 

Recently through our Rapid Response Service, we enquired about the indemnification clause for RFP No. C3-10-17 – Consultant Required for Twenty Road East and Upper Red Hill Valley Parkway Extensions Municipal Class Environmental Assessment Phases 3 and 4 – Section 37. Indemnification.  We were informed by the City that they will not be amending the referenced clause.  City staff indicated that “Future considerations may (City emphasis) be made at a later date to amend this clause in some way …”.  CEO is notifying member firms considering submitting proposals to the City of Hamilton to ensure that they  carefully review the RFP documents for this clause and to beadvised that Section 37. Indemnification is very problematic for our industry insurance providers to fully insure. 

CEO Position: CEO is of the strong opinion that fair and insurable agreements attract greater and more positive interest from the consulting engineering industry and result in better project results for clients. The clause in this RFP creates four substantial problems for consultants. 

   1. Imposes an obligation for the consultant to defend the client. 

Professional liability insurance carriers will not defend an entity other than the insured engineering firm.

   2. Creates an expectation that the consultant will assume “fines”, “penalties” and other sanctions. 

Consultant professional liability insurance policies serve to cover compensatory damages arising from the consultant’s negligence; this does not include fines, penalties and fees etc.

    3. Demands that “damages (including indirect, special, remote, and/or consequential damages)” be assumed by the consultant. 

 This is not reasonable as such damages cannot be accurately quantified and are often disproportionate to the liability of the consultant, if they are at all attributable.  Due to these factors professional liability insurance coverage may not apply.

    4. Requires coverage for questionable parties, namely “affiliates”, a term more appropriately applied to commercial entities, and “representatives”, an undefined term.

It is CEO’s position that for a consultant to be held accountable under any agreement, sound negligence-based criteria must exist.  Our members’ professional liability policies exclude claims arising out of liability assumed under contract unless the liability would have existed in the absence of the contract, e.g. negligence.  Acceptance of liability beyond that required by law is the acceptance of liability beyond that for which members are insured. 

We remind members that our recommended industry standard indemnification clause, as developed with MEA, can be found in the current version of the MEA/CEO/Client/Engineer Agreement for Professional Consulting Services, 2017 that is located on our website here.

Read more.

ISSUE: Consulting Engineers of Ontario (CEO) is advising members to use caution and consult their insurance and legal counsel before submitting project proposals to Norfolk County. Despite making efforts to engage county officials to amend the indemnity clause in the above referenced RFP, staff have issued CEO a blunt refusal. Member firms considering submitting responses to the County’s call for proposals for RFP No. PW-E-17-78 are advised that Section 4.3 - Indemnity is uninsurable through our industry’s insurance providers.

CEO POSITION: CEO strongly believes that having fair, insurable agreements attracts more positive interest from the consulting engineering industry and leads to better project outcomes for clients. The clause in this RFP creates three significant problems for our members.

The clause: 1. Imposes an obligation for the consultant to provide coverage for questionable parties, namely “…agents and other representatives…”. As these are undefined terms, such individuals are not subject to any sort of indemnification by the engineering firm’s insurance.

2. Creates an obligation for the consultant to assume costs including “expenses (including legal, expert and consultants fees…” and other sanctions. Members’ professional liability insurance policies serve only to cover compensatory damages arising from the consultant’s negligence; this does not include fines, penalties and fees etc.

3. Requires that the consultant assume “demands … in any way based upon, occasioned by or attributable to anything done or omitted to be done by the Proponent, … or otherwise in connection with, the Contract. The Proponent further agrees to indemnify and hold harmless the Indemnified Parties for any incidental, indirect, special or consequential damages, or any loss of use, revenue or profit, by any person, entity or organization, including, without limitation, Norfolk County, claimed or resulting from such Claims. The obligations contained in this paragraph shall survive the termination or expiry of the Contract”. Such obligations are not reasonable as they are overly broad, not limited to negligence and expressly include consequential damages. Such damages cannot be accurately quantified and are often disproportionate to the liability of the consultant, if they are at all attributable. Due to these factors, our members’ professional liability insurance coverage would not apply.

Click here to read more.

Bill 148, the Fair Workplaces, Better Jobs Act, 2017, passed Third Reading in the Ontario Legislature on Wednesday, November 22, 2017. The legislation introduces significant amendments to Ontario’s Employment Standards Acts and Labour Relations Act, and limited amendments to the Occupational Health and Safety Act. Most of the amendments come into force on January 1, 2018.

When Bill 148 was first introduced in June 2017, Sherrard Kuzz LLP prepared a comprehensive Executive Summary including an analysis of the practical implications for Ontario workplaces, used as a resource by industry associations and employer advocacy groups such as CEO and its member firms.

Sherrard Kuzz LLP is now in the process of updating the Executive Summary. In the interim, this briefing note summarizes all of the key amendments to the Employment Standards Act, Labour Relations Act and Occupational Health and Safety Act. You can download the briefing note, here.

If you have any questions or concerns, please contact David Zurawel, CEO’s Director of Government and Stakeholder Relations at 416-620-1400 ext 222 or [email protected].

CEO is informing members that on the advice of our insurance and contract specialist partners some language in the current 2017 version of the MEA/CEO Client/Engineer Agreement for Professional Consulting Services needs to be changed.

Please make sure that in your project agreements that the language in the introductory paragraph of Section 1.11 Insurance (Page 6 of 19) reads as follows:

“The Client will accept the insurance coverage amount specified in this clause section (a) OR (b), or whichever is applicable to the claim or as specified in the RFP as the aggregate limit of liability of the Engineer for Clients damages.”

To ensure appropriate insurance coverage, be sure to attach supplementary conditions to your agreement reflecting this modified language.

CEO is working with MEA to update the standard agreement to reflect this necessary change as soon as possible.

Should you have any questions about this please do not hesitate to contact David Zurawel at [email protected] or 416-620-1400 ext. 222.

CEO’s Business Risk Committee has established a Rapid Response Subcommittee to provide a rapid response service for Members encountering problematic client contracts and procurement practices. The subcommittee and its mandate of challenging and correcting problematic client terms and conditions are a key pillar of the association’s strategic plan.

To achieve the objectives laid out in CEO’s strategic plan, the Rapid Response Subcommittee provides analysis and advice on procurement issues through a new quick response service model.

The service model is driven by subcommittee volunteers and sets out to achieve solutions that are mutually beneficial to our Members and their Clients in efficient and timely manner.

CEO is completing its analysis of this new service model, which evaluates all associated tasks and activities. During the beta test period, CEO focused on the management and provision of services required to achieve their quick response times.

CEO has achieved success having reached mutually beneficial RFP amendments; our initial evaluation finds that CEO will be working to continue to improve our system of gathering information for analytical, administrative and informing Members of industry contractual issues.

By conducting a thorough assessment of the issues or risks identified during beta testing, CEO is convinced that we have a viable process. We will work collaboratively with Members to ensure the Rapid Response Subcommittee and its processes serve to address the most important issues confronting Member’s businesses today.

For inquiries about the Rapid Response Service Model, please contact David Zurawel at (416) 620-1400 Ext.222 | [email protected]

Issue:

Ontario Attorney General, Yasir Naqvi, has introduced Bill 142, An Act to amend the Construction Lien Act, better known as the Construction Act. The bill, if passed in to law, will modernize the Construction Lien Act, address the need for promptness of payment, and introduce an adjudication-based dispute resolution system for Ontario’s construction sector.

Background:

The product of a 2-year, comprehensive independent public consultation process, the draft Act is informed by the report “Striking the Balance” authored by Bruce Reynolds and Sharon Vogel. Making 101 recommendations to the province, the report was the product of advice from more than 60 stakeholder groups, presenting more than 90 specific issues over the course of 30 consultation meetings. Ministry of the Attorney General officials have adopted the vast majority of the recommendations as a package for change, omitting just three.

Consulting Engineers of Ontario has played an active role in the independent review and development of this draft bill and is pleased all of its issues have been represented in the draft legislation, namely:

• Requiring the mandatory release of holdback monies
• Extending the lien rights period to 60 days from 45
• Enabling the partial release of holdback funds through phased projects, and
• The use of letters of credit as acceptable financial instruments with which to hold holdback funds

 Conclusion:

This legislation proposes to make extensive changes to Ontario’s construction sector, impacting both public and private projects. The federal government and other provinces are closely watching Ontario. What gets passed into law here will most certainly influence these other jurisdictions.

In the near future, CEO will be providing an analysis of the draft bill and how it will impact members. The Ministry of the Attorney General is preparing a consolidated version of the draft legislation that will highlight all of the changes made to the existing Construction Lien Act. In the meantime, Bill 142 is important reading for anyone practicing in the construction sector. A pdf copy of the bill is available here.

The provincial legislature has risen the summer recess therefore, action on the bill will not begin until MPPs return for the fall legislative session on September 11, 2017.

Should you have any questions about the draft bill or the proposed changes you can contact David Zurawel at 416-620-1400 ext. 222 or [email protected]

Ontario has introduced legislation that will fundamentally reform the province’s existing Employment Standards Act, 2000 (ESA) and Labour Relations Act, 1995 (LRA).

The proposed legislation, Bill 148, Fair Workplaces, Better Jobs Act, 2017, contains broad ranging recommendations from the 419-page Changing Workplaces Review Final Report published in May 2017.

The Changing Workplaces Review, initiated by Labour Minister Kevin Flynn in 2015, is the most significant review of the ESA and LRA the Government of Ontario has undertaken in decades. During the review process, two phases of consultation took place to provide the general public and stakeholders with the opportunity to comment on how the LRA and ESA could be amended to better address today’s workplace issues.

The final Report contains 173 recommendations including raising the minimum wage, ensuring part-time workers are paid the same hourly wage as full-time workers, introducing paid sick days for every worker and including members of the architectural and land surveying profession in the LRA.

Fair Workplaces, Better Jobs Act, 2017 was introduced and referred to the Standing Committee on Finance Economic Affairs on June 1.

Sherrard Kuzz LLP, one of Canada’s leading employment and labour law firms, is reviewing the legislation and its recommendations and will be developing an analysis.

Meanwhile, if you have any questions or concerns, please contact David Zurawel, CEO’s Director of Government and Stakeholder Relations at 416-620-1400 ext 222 or [email protected].

The full Changing Workplaces Review Report is available here. The pdf copy of the bill is available here.

For more information on the amendments proposed in Fair Workplaces, Better Jobs Act, 2017, click here to download the backgrounder.

Issue:

The Regional Municipality of York issued RFP P-17-69 on May 18, 2017 for Consulting Services for the inspection and appraisal of Bridges, large Culverts, Structural retaining walls, and large Overhead sign supports owned by the Regional Municipality of York.

Under the provision of the Region of York’s agreement, the Consultant is responsible to the owner for delay and/or under-performance of the Project. 

The Liquidated Damages clause (Schedule B, VII), presents problems for member firms obtaining professional liability insurance coverage members’ firms.When liquidated damages clause is not related to negligence in the performance of professional services (not meeting the standard of care), this becomes non-insurable because professional liability insurance policies only provide coverage for damages caused by the negligence of the insured Consultant. Most professional liability policies specifically exclude coverage for liquidated damages.

If the clause is not modified to address negligence-based performance (not meeting the standard of care), this clause is non-insurable. Professional liability insurance policies only provide coverage for damages caused by the negligence of the insured Consultant. Most professional liability policies specifically exclude coverage for liquidated damages.

CEO’s position:  

1. The Courts have consistently held that a liquidated damages provision cannot be used to impose a penalty; therefore, if the amount set for liquidated damages is a penalty imposed for breach of contract, or a coercive measure for deterring a potential breach, liquidated damages may not be enforceable. For the liquidated damages provision to be enforceable, it must provide some clear or readily ascertainable amount accruing because of a breach of contract.

2. Also, damages must be exclusive. If the contract provides the Owner with an alternate way to measure or seek damages, the liquidated damages may not be enforceable.

Schedule F Contract Terms and Conditions, 9.1 Damages and Section 12 – Right to Set-Off and Holdbacks, both include provisions for the Region to remedy delayed services; therefore, Schedule B VII. Liquidated Damages would be nonexclusive.

The Regional Municipality of York’s Addendum:

On May 30th, CEO issued a formal letter to The Regional Municipality of York on behalf of our Members, regarding RFP P-17-69 Consulting Services for the inspection and appraisal, in particular, the Liquidated Damages clause.

On June 1st, 2017, the Region of York responded to CEO’s communication detailing the fact the addendum had been issued, removing the LD clause as requested.

This RFP is set to close on June 8th, 2017.

Should you have any questions or concerns regarding this communique or this particular RFP please contact Chaslene Pilgrim, (416) 620.1400 Ext. 226 or via email [email protected]

Click here to download in the PDF format.

Infrastructure Ontario’s (IO) Real Estate Division has issued a renewal of its Vendor of Record (VOR) for engineering and technical services.

The system will create a new pre-qualified list of firms that will be eligible to provide services to the agency and its project management service providers (PMSPs). Firms interested in qualifying for the VOR have the opportunity to submit a request for proposal via Biddingo until June 8, 2017. Those firms selected to be on the VOR list will be eligible to be invited to submit responses to agency bid call documents for specific assignments. All firms currently on the agency’s VOR must apply to be included on the VOR list.

The agency will be extending its current VOR Master Agreement terms and conditions beyond the July 1, 2017 expiration date. This is being done to provide an opportunity to evaluate terms and conditions of the new Master Agreement. Consulting Engineers of Ontario (CEO) has been assured by agency staff that the terms and conditions of the Master Agreement will be made available for its review and feedback. The agency has also assured CEO that earlier concerns over language contained in the current Master Agreement empowering it to summarily terminate contracts with vendors on the suspicion of fraudulent practices have been properly addressed.

Click here to read the details of the Renewed VOR.

Finance Minister Charles Sousa delivered Ontario’s first balanced budget since 2008. The fiscal plan entitled, “A Stronger, Healthier Ontario” details an ambitious strategy for social investment going forward. Proclaiming that “together we have built up Ontario to compete and succeed in the global economy …” the Finance Minister stated that “now we believe it is time to consider what comes next”. The key pillars of the budget are health care, education, supporting families and creating opporitunities and infrastructure.

“Balancing this year’s budget is a much anticipated and significant achievement for Ontario”, said Barry Steinberg, Chief Executive Officer of Consulting Engineers of Ontario. “Planning core investments without the burden of a deficit should substantially improve the government’s ability to deliver on its commitments”. This budget builds on the government’s commitments to the people of Ontario,” Steinberg remarked.

The proposed budget pledges to expand Ontario’s investments in infrastructure by $30 billion to $190 billion over 13 years, starting in 2014-15 and represents a $5.966 billion increase over last year. Emphasis focuses on four key prioirities: public transit ($56 billion); highways and transportation ($26 billion); grants to hospitals (approx. $20 billion); and, education (approx. $16 billion). Also central to infrastructure are continued commitments to municipalities through increased gas tax funding, the Ontario Community Infrastructure Fund, Connecting Links program and the Trillium Trust. “CEO has consistently been a strong supporter of separate, dedicated funds for infrastructure investment. They are the most effective tools for providing value to taxpayers”, said Steinberg. “The province’s continued commitment to ensure the full funding of the Trillium Trust is important. It is an imperative tool for eliminating Ontario's core infrastructure deficit. However, the government needs to provide more detail on how the Trust works. I don’t think anyone in our industry really knows how it factors in to proper project planning, prioritization and execution”, remarked Steinberg.

Today’s budget does not include any new taxes. The total government spend for the coming year is projected to be $141.1billion, including 11.6 billion in interest charges on the provincial net debt which now totals almost $302 billion, representing 37.8% of GDP.

Consulting Engineers of Ontario is pleased to report that all member issues it submitted to the expert review of the Act will be included in the reform legislation, expected to be tabled with the legislature late this spring.

The expert report of the review included 100 recommendations to modernize the lien and holdback process, introduce a prompt payment system and create an adjudicative dispute resolution process. In reviewing this feedback, the Attorney General has stated that the government’s reform legislation will address all of the review reports recommendations except for those proposing: a pilot project for trust accounts in the public sector; providing for a single property identifier number for common elements of condominiums; and, removing the provision that permits liens to expire on a lot-by-lot basis.

CEO is continuing to communicate with the Attorney General and his staff.  Work continues to develop the finer details of the prompt payment system, including the definition of what constitutes a “proper invoice”, the trigger to start the payment clock.  Also important is the ongoing discussion of freedom of contract, given that this is something consultants to not currently have.

CEO is preparing for a busy summer dealing with this issue as extensive public consultations are expected on the bill.  We will keep you up-to-date with details as they become available.

CEO is expecting the government to soon finalize the update to its asset management regulation.  To qualify for provincial funding for public infrastructure projects municipalities must have submitted an asset management plan with the Ministries of Infrastructure and Municipal Affairs.

CEO, as part of a small group of sector stakeholders, has been working with the province for more than a year to help guide the update of the regulation.  Having already held one round of public consultations, advice has been gathered on how to improve the plans by requiring a standard format and more uniform data collection and reporting.

More information on this issue will be provided as it becomes available.

Consulting Engineers of Ontario (CEO) and Municipal Engineers Association (MEA) announced the finalization of a Standard Client/Engineer Agreement for Professional Consulting Services. The standard agreement aims at helping Ontario’s 444 municipalities practice a fair procurement process by outlining equitable, consistent terms and conditions for both clients and consulting engineers.

“The standard agreement is built on the principles of partnership and fairness. It symbolizes a collaborative approach to creating a favourable business environment for both clients and consulting engineers,” said Barry Steinberg, P.Eng, Chief Executive Officer of Consulting Engineers of Ontario.

The consulting engineering sector is one of few professional service providers that allow clients to prescribe the terms and conditions under which they offer their services. In response, the two associations have been working closely together to review and update the 2006 version of the MEA/CEO Agreement for Engineering Services so that municipalities can use a contract that is up-to-date with the present business landscape.

“This standard agreement will enable municipalities to be more efficient in doing business with consulting engineers. The template will allow smaller municipalities particularly to save on the significant time and cost spent on creating a contract,” said Reg Russwurm P.Eng, President of the Municipal Engineers Association.

“It has been a lengthy, complex process but also a very rewarding one,” said Geoff Pound, P.Eng, Chair of CEO’s Municipal Engineers Association Liaison Committee. “The revised standard agreement is now in line with current municipal engineering business practices. This will be a benefit to both municipalities and the consulting engineering industry.”

Download: 2016 MEA-CEO Standard Client/Engineer Agreement for Professional Consulting Services

Consulting Engineers of Ontario applauds this afternoon’s passage of Bill 6, the Infrastructure for Jobs and Prosperity Act.

“We have been working with government on this legislation for quite some time and we are pleased to see it pass the legislature,” said Barry Steinberg, Chief Executive Officer of Consulting Engineers of Ontario.

Today’s passage of the legislation sees Ontario join Québec as the only other provincial jurisdiction requiring its government to have a long-term infrastructure plan.  The province will have three years to table its first plan from the date the legislation receives royal assent, and then must renew the plan at least once every five years. 

The government intends to use its new strategic plan to align its infrastructure investments with its economic development and job creation priorities, while emphasizing design and planning.  “Professional Engineers play an integral role in bringing the government’s infrastructure plans to life, we are very pleased this legislation recognizes our public duty,” Steinberg remarked. “The draft Bill was of great concern to us; it made no mention of the role of engineers while prescribing a specific role for architects,” said Steinberg.  “Given the stipulations of the Professional Engineers Act, this had to change; the legislation had to maintain balance.  We are happy with the solution we developed with Minister Duguid’s staff and officials.”  

Also heavily emphasized in the Bill is the role of asset management plans.  “CEO has consistently supported infrastructure investment as a result of sound planning.  By requiring these plans and mandating they be consistent in their form, content and timing, government will be able to make sound, and accurate decisions to prioritize projects and manage their full lifecycle cost.  This is what is necessary to provide innovation, value and public safety for Ontarians,” said Steinberg.

Click here to download Bill 6, the Infrastructure for Jobs and Prosperity Act. 

Finance Minister Charles Sousa this afternoon delivered the Wynne government’s economic blueprint for Ontario.  With a 10-year, $130 billion infrastructure commitment, the “Building Ontario Up” budget makes transit and transportation infrastructure a key element determining Ontario’s future economic success.  Also playing an important role in the government’s four part plan are: investing in people’s talents and skills; creating a dynamic and innovative environment for business; and, building a secure retirement system. 

“Where last year’s budget focused on investment commitments today’s plan is all about implementing of those commitments,” said Barry Steinberg, Chief Executive Officer of Consulting Engineers of Ontario.  “Our communities are being stifled by the lack of quality core infrastructure,” Steinberg said.  “We have gridlock on our roads and highways, our transit systems don’t have the capacity to serve as an alternative to promote mobility, and our water and wastewater systems are suffering the neglect of deferred maintenance.  There is an urgent need for today’s announced commitments, especially the Moving Ontario Forward investment of $31.5 billion over the next 10 years,” said Steinberg.

Recommendations from the Premier's Advisory Council on Government Assets are providing an additional $2.6 billion to the Moving Ontario Fund over the next 10 years for a total of $31.5 billion.  “What is most important about this investment is its allocation to the Trillium Trust,” said Steinberg.  “Separate, dedicated funds for infrastructure investment are the most effective tools for providing value to taxpayers as they provide government a secure means to eliminate Ontario's core infrastructure deficit.”

Today’s budget details a total government spend for the coming year of $131.9 billion, leaving a deficit of $8.5 billion.  The government is maintaining its pledge to bring its finances back to balance by 2018.  Ontario’s total accumulated debt will reach $298.9 billion next year.