PROCUREMENT HAS LONG BEEN THE realm of bureaucrats. They quietly and competently go about purchasing goods required for the public good in ways that align with the responsibilities of governments and in the interest of the public. It is not typically the stuff that makes headlines.
In recent months, however, construction procurement has made headlines in Ontario, Manitoba, and British Columbia.
In May, the government of Manitoba moved to ensure that government projects would be tendered according to procurement best practices, and legislated that “in evaluating bids, a public sector entity must not use, as evaluation criteria, whether the bidder employs unionized employees, non-unionized employees or a combination of the two.”1 The legislation was an attempt to rectify the use of previous legislation that allowed project labour agreements on past government contracts to contain clauses requiring contractors to affiliate with, or pay dues to, a subsector of construction unions, and to prevent companies with different labour models from completing public works.2
And in Ontario, headlines emerged this spring about the negative effects of restrictive tendering on municipalities, and its effects on municipal budgets and local construction markets.3 And recent comments by the new premier have indicated that they too are moving in the direction of a return to competitive tendering in government procurement.4
The latest headlines to emerge are from British Columbia, whose government is in the midst of modernizing its procurement practices—many of which do need updating. But in doing so it has also signalled the possibility that it will use that process to provide preferential treatment for companies affiliated with certain unions.5
Suddenly, the issue of public procurement— typically the domain of competent, quiet, apolitical civil servants—has been thrust into the political limelight and in the media.
The possibility that certain companies will be given preferential treatment because of their union affiliation, or that community-benefits agreements would be structured in such a way as to tilt the balance in favour of one labour model, has led to a series of tit-for-tat op-eds by various players in the construction industry.
And central to that debate are various assertions about the ability of various contractors, with various labour models, to complete work on time and on budget (or not). A recent editorial in the Times Colonist is a case in point. Tom Sigurdson, executive director of the BC Building Trades highlighted four open-shop projects in British Columbia that went over budget,6 while others have noted that the project touted as an example of the success of procurement which favours the Building Trades itself went way over budget.7
What are we to make of this?
This purpose of this paper is to offer a cleareyed look at these assertions and to show that the reliance on lists of projects that went overor under-budget on a case-by-case basis is not the best means to evaluate government construction procurement practices. Instead, we will show—using industry benchmarks and best practices—a better view of evaluating procurement practices, and also the effects that diversion from these best practices can have on the industry, workers, and the public good.
PICKING CHERRIES VERSUS SOUND PRACTICES AND INSTITUTIONS
WHAT THE METHOD THAT SIGURDSON and others are employing—the listing of projects that go over budget done by companies affiliated with one type of labour model or another—misses is the fact that a lot of construction projects and contracts (especially big ones) go over budget. The issue, according to scholars, is endemic. University of Toronto scholar Matti Siemiatycki and others note that cost overruns and delays are “a problem that unites the nation” and that they pose “a global challenge,”8 with huge percentages of projects going significantly over budget on an ongoing basis.
And lest anyone think that this is simply a problem in the public sector, University of Calgary scholar George Jergeas has shown that the problem is also endemic to megaprojects in the private sector, including those done by highly sophisticated, global companies that are traded on public stock exchanges.9
At the same time, it is also true that many projects completed by union, non-union, and alternative union firms are completed on time, and on budget, or even ahead of time and ahead of budget. A line-by-line review of each project completed in Canada will produce a range of results, and anyone can cherry-pick their preferred examples.