Editorial: You get what you pay for

Is it time to stop awarding low-bid wins across Canada?
Andrew Snook
September 21, 2018
By
When a deal seems to good to be true, it usually is.

That piece of advice was being buried into my brain by my parents even when I was a wee lad at a convenience store trying to decide which chocolate bar I should buy.

That’s not to say I always followed that advice.

I remember buying my first car on my own. At the time I worked beside a car park, and I spent three weeks worth of my lunch hours test driving cars and comparing costs. Having just graduated university and being near broke at the time, cost ended up winning over everything else. I purchased the cheapest option on the market. I won’t name the brand and model, but there was definitely a good reason it was priced $9,000 cheaper than the next cheapest option.

All I can say is thank the Gods for my warranty!

In the first three years I owned the vehicle, I needed to replace the gear shifter box three times; the starter; the carburetor; and the driver-side door lock and a manual window handle, both of which just fell off. Of course, the warranty didn’t cover the air conditioner breaking just after the three-year mark; the key constantly getting jammed; or any of the other various parts that failed within the first five years of ownership.

Imagine my surprise to learn that it was rated the second-most dangerous vehicle manufactured that year and that it held
almost no resale value!

Low cost really isn’t any assurance of quality when it comes to a purchase, which brings me to the tendering process still used for the awarding of contracts today for many of Canada’s infrastructure projects.

I’ll be honest, I’ve never agreed with awarding contracts based almost entirely on low bids. It has always felt like an unfair squeeze on contractors who place quality work as their No. 1 priority, while potentially creating “savings” at the expense of quality.

So I was pleasantly surprised when I read about the bidding evaluation process changing in Alberta to a 60/40 split. Updating the evaluation process to a 60-per-cent emphasis on cost (obviously still very important) and 40 per cent towards performance measures makes far more sense to me. After all, if a contractor doesn’t work well with municipalities, or is known to poorly manage its maintenance activities (salting, sanding, pothole patching, vegetation control, etc.), that should be a strike against them when attempting to secure contracts.

Will this new process increase costs for road maintenance? Maybe, but maybe not.

After all, if a municipality needs to shell out extra dollars to ensure its roads are being properly maintained - after a contract has already been awarded - that will likely not come out to being a cheaper option.

This option should work in favour of the more reputable contractors across Alberta, allowing them to secure more contracts at fair rates. That’s not to say all the lowest bidders don’t create quality work, I’m sure some still consider quality a top priority, but forcing contractors to continuously undercut each other in a race to the bottom is not a sound plan for ensuring our infrastructure is properly built and maintained.  

I imagine all of the provinces and territories still focused almost entirely on low bids, as well as the federal government and various municipalities, will be keeping a close eye on how this updated process works out for Alberta.

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