The Office of the Procurement Ombud (OPO) has urged federal departments and suppliers to utilize its alternative dispute resolution (ADR) services, as the sole federal organization authorized to investigate and mediate issues concerning construction contract administration.
OPO can provide mediation services in connection with disputes regarding the interpretation or application of a construction contract’s terms and conditions.
OPO noted that opting for ADR is becoming more common for construction contracts, as opposed to resorting to litigation, and that the Canadian International Trade Tribunal lacks the mandate to address contract administration issues.
“OPO is here to help - Our ADR services provide a practical, cost-effective way to resolve disputes early and keep construction projects moving forward,” said Alexander Jeglic, procurement ombud, in a news release.
This encouragement of ADR came in the context of OPO announcing the publication of its findings in its new research study on construction contracts.
In its news release, OPO said the study sought to analyze recurring issues concerning federal construction contract administration, understand their root causes, and recommend practical improvements to contract administration practices.
OPO shared that the issues commonly raised included insufficient dispute resolution mechanisms, poorly defined work scopes, inconsistent use of standard contract documents, and unclear and ineffective substantial performance clauses.
According to OPO, these issues:
- disproportionately impacted small and medium-sized enterprises (SMEs)
- often caused federal construction project delays, cost overruns, and disputes
- undermined the fairness and efficiency of projects
- prevented taxpayers from achieving the best value
Study’s context
OPO commenced the study in response to multiple complaints from procurement stakeholders raising issues regarding the administration of federal construction contracts over the last few years.
Specifically, written complaints and dispute resolution requests relating to construction contracts accounted for 89 cases and 155 issues fielded by OPO from 2020–24.
“My office has seen a growing number of supplier complaints about the administration of construction contracts,” Jeglic said in OPO’s news release. “Improving the administration of these contracts—often high in dollar value—is essential to avoiding delays and cost overruns, and to ensuring that Canadians get good value for their money.”
In its news release, OPO noted that effective contract administration helps protect taxpayer dollars and the value established during the contract award process, and timely and affordably deliver the infrastructure Canadians need.
OPO shared that its recent study on construction contracts is the 14th publication under its knowledge deepening and sharing initiative, established in 2018 to comprehend procurement challenges better.