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Changes in the Procurement Dynamic

Changes in the Procurement Dynamic

Richard H. Shaban

Toronto, ON

June 4, 2013

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Integrated Project Delivery

• “A project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to reduce waste and optimize efficiency through all phases of design, fabrication and construction.”

– from the American Institute of Architects (AIA), Instructions for Document A295

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History of IPD

• Emerged following 2007 publication of IPD contracts developed by California Council of AIA

• Shares similarities with the production concepts Just In Time and Total Quality Control

(from Raisbeck et al., Assessing Integrated Project Delivery: A Comparative Analysis of IPD and Alliance Contracting Procurement Routes, 2010)

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Contract Example: American Institute of Architects (AIA) Document A295 – General Conditions of the Contract for IPD

• Article 1.1• The Owner, Architect and Contractor have agreed to

plan, design and construct the Project in a collaborative environment following the principles of IPD and to utilize Building Information Modeling to maximize the use of their knowledge, skills, and services for the benefit of the Project.

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IPD = multi-party agreement

- from American Institute of

Architects, Integrated Project

Delivery: A Guide

Owner

Architect

ContractorContract

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Features of IPD

• Owner, Architect and Contractor execute same contract

• Information openly shared

• Risk is shared and managed collectively

• Compensation is tied to project success

• Focus on use of technology (Building Information Modelling)

- From American Institute of Architects, Integrated Project Delivery: A Guide

Electronic Bonding

RFP Requirements for ebid bond (from Canadian Surety Association, Mock Tender Program):

• 1. A bid bond may be submitted in an electronic or digital format if it meets the following criteria: • 1.1. The version submitted by the Tenderer must be verifiable by the Owner with respect to the

totality and wholeness of the bond form, including: • 1.1.1. the integrity of the content to demonstrate assurances the document received is the

true document executed and the content has not been changed or altered; • 1.1.2. all digital signatures to demonstrate the identity of the parties that have duly executed

the document; • 1.1.3. all digital seals to demonstrate the identity of the entity that applied a company seal; • 1.1.4. that the verification process is conducted with the Surety Company, or an approved

verification service provider of the Surety Company to demonstrate acknowledgement of intent.

• 1.2. The version submitted must be viewable, printable, savable and storable in standard electronic file formats compatible with the Owner, and in a single file. Allowable formats include pdf.

• 1.3. The verification may be conducted by the Owner immediately or at any time during the life of the bond and at the discretion of the Owner with no requirement for passwords or fees.

• 1.4. The results of the verification process must provide a clear, immediate and printable indication of pass or fail regarding Item 1.1.

• 2. Bonds failing the verification process will NOT be considered to be valid.

• 3. Bonds passing the verification process will be treated as original and authentic.

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Extending Contract A/Contract B Analysis to RFQ’s

Intellibox Concept Inc. v. Intermec Technologies Canada Ltd. (2011), 95 B.L.R. (4th) 124 (Ont. S.C.)

• Considerations: • Irrevocability;• Deadline for Completion;• Security; • Evaluation Criteria;• Specifications;• Language of the Document.

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Clarity in Tender Documents

HGC Management Inc. v. City of Brantford (unreported, March 21, 2013)

• Non-compliance of bid bond disqualifying bidder;

• Urgent application for determination;

• Agreed Statement of Facts;

• Form over substance;

• Careful examination of tender terms;

• Unfair to impose a technicality in the tendering documents which is not expressed;

• No restriction on use of a single Bid Bond containing separate bid securities.