One More Load: Reparing process for progress
Repair streets cheaply and quickly with better process
March 27, 2017 By Chris Lorenc
Winnipeg Mayor Brian Bowman, in his year-end interview with the Free Press, said high on his 2017 list of priorities is improving the way local and regional streets budgets are approved, worktendered and road-construction contracts awarded. That echoed the mayor’s instructions in November to Coun. Marty Morantz, when he was appointed chairman of the infrastructure renewal and public works committee.
Morantz was tasked to work with the public service to “improve procurement processes… to allow stakeholders the ability to plan better for upcoming projects and construction seasons.”
Winnipeggers should be relieved to hear the mayor and Coun. Morantz are turning council’s attention to changing the city’s existing inefficient construction-procurement process, which they inherited as newly elected politicians in 2014 and our industry has been lobbying to change since 2011. Here’s why. The current civic process of adopting construction programs, budgets, assigning design work, tendering and awarding of contracts for capital work – including regional and local street works – is inefficient, frustrating and wasteful. It must be reformed because chief among the results would be getting more work done in each construction season and getting more for the money budgeted to the program each year. That means greater improvement – and faster – for the city’s streets.
Currently, the annual schedule for approval of the capital budget delays a timely rollout of infrastructure programs for the coming year. If the budget were approved by late fall, the administration could get the road-construction projects out quickly to the engineering community for the necessary design work. Then, tenders could goout in late fall, early winter and spring.
Awarding contracts early in the new year – so the street and waterworks can start when the thaw is out of the ground – could result in up to 10 additional weeks to Winnipeg’s road construction season. That’s more than two months of additional time to get work done. Moreover, tendering in the late fall/winter and early spring enables more competitive bids, as contractors in the off-season are keen to line up work for the following year. They get better prices from equipment and material suppliers who are similarly looking to plan their work. In contrast, tendering and awarding contracts in spring or summer, as often happens now, results in prices that reflect peak demand and are therefore higher – sometimes by as much as 20 per cent.
Two critical changes are needed to allow for an accelerated road-construction program. First, the capital budget must be approved by November. Council should follow a policy to approve 150 per cent of the coming year’s construction program. That way, administration can have pre-approved and designed projects sitting on the shelf, ready to be launched. If the year’s program runs a surplus or sees a long run of good weather, Winnipeg can add work onto the season’s end. Second, Winnipeg should adopt the method of procuring engineering design in wide use around the world, including other Canadian and U.S. cities. It’s called qualification-based selection. Essentially, the administration pre-selects qualified engineering firms based on their documented experience and performance and their ability to muster resources. From that list, it chooses a firm best-suited to a project’s scope, matching the right firm to the right project. This is not “sole-sourced” contracting. These firms will have been vetted and pre-qualified. The big difference is, after selection, the city and the firm negotiate a price. If they can’t agree, the city moves on to the next most qualified firm on the list.
In contrast, the current process, which requires requests for proposals (RFPs) on all contracts valued greater than $100,000 – unnecessarily and without any financial benefit – delays engineering assignment, tendering and contact awards by up to 10 weeks.
Ironically, what we have been consistently recommending is a return to what the city used to do to great effect prior to 2009, when cost overruns on the West End Water Pollution Control Centre triggered an ill-informed political decision – unsupported by any administrative analysis – to switch to RFPs for engineering design. This has had unintended consequences, including the reduction of the number of design engineering firms in the city, which actually clips choice, limits engineering-capacity growth and reduces
The existing inherited procurement process denies council and administration the ability to fully achieve these benefits. That is definable waste, and taxpayers should not have to pay for it.
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