| Q. | How much money is required to rehabilitate our sewer and water infrastructure in Ontario? |
| A. | According to the MOE's own Needs Study, $3 billion is required. |
| |
| Q. | What is "Full Cost Accounting" of water and sewage services? |
| A. | "Full Cost Accounting is a method by which all mandatory costs of resources .used, committed, or required in the future, for water treatment and supply and sewage collection, treatment and disposal are taken into consideration." (Source: Ontario Sewer & Watermain Construction Association, July 2001) |
| |
| Q. | Why do we need Full Cost Accounting? |
| A. | There are a number of reasons, but the most significant is to ensure that the funds needed to expand and repair our water and sewage infrastructure are generated and dedicated to preserving the high quality of service that the public expects. |
| |
| Q. | Do I get a cheaper job, if I assess a short completion time? |
| A. | No, just the opposite. If a contractor has more time to be flexible with scheduling work load, it will be able to bid on more projects, competitively. |
| |
| Q. | How do I get a contractor to complete any small deficiency? |
| A. | A maintenance holdback, including a small cash holdback, should be sufficient. Hire a reputable contractor who is being fairly compensated for its work, and the company should rectify any deficiencies, without delay. |
| |
| Q. | Why should I (as the owner of a project) be in favour of Pay Assurance? |
| A. | Pay Assurance is a mechanism which ensures payment to a contractor for work certified as complete, in the event that a developer refuses, or is unable to pay within a reasonable period. The provision for a contractor to be paid ensures its ability to complete your project. |
| |
| Q. | What is pay assurance? |
| A. | Pay assurance is a mechanism by which the contractor is assured payment for work completed according to the contract. It is tied to letters of credit posted by the developer, or owner of a project that may be used to complete a project if there are inadequate funds to complete the project, or complete deficiencies. |
| |
| Q. | Can I opt out of my commitments under the Construction Lien Act, through a side agreement? |
| A. | No. The Act specifically says that any agreement to waive lien rights is null and void. |
| |
| Q. | When does the 45 day lien period commence for the lead contract? |
| A. | Once a signed certificate is received, and it is published in a trade newspaper such as the Daily Commercial News and Construction Record, the 45 day lien period commences. |
| |
| Q. | When do contractors get paid? |
| A. | Contractors should be paid within 30 days of an agreed upon pay period cutoff date. This is critical for a contractor to meet the 45 day lien period. The contractor has bills to pay and does not want to lose his lien rights. |
| |
| Q. | How do contractors learn about projects? |
| A. | Public agencies and municipalities must advertise projects in local papers, and industry publications such as Daily Commercial News. They may receive a letter inviting them to bid on the work. |
| |
| Q. | Why is the public sector work awarded by bidding? |
| A. | Since capital works are generally funded by public money, public officials are required by law to tender work on the basis of low bid. |
| |
| Q. | What is the bid process? |
| A. | The bid process is the common method by which contractors secure work. It is usually carried out by a third party such as a consulting engineer or architect. It may also be carried out by a municipal or government agency engineer. The third party or municipality / agency prepares a tender and provides drawings to qualified contractors who are capable of doing their own estimating. The contractors provide estimates for the work, and the contractor with the lowest bid normally is contracted for the work. |
| |
| Q. | Should I prequalify my contractors? |
| A. | Prequalification is a complicated issue. Most prequalification programs target the financial aspect of the contractor, rather than its ability to perform. Qualifying contractors is a good approach, but a fair prequalification program is not yet available in the industry. |
| |
| Q. | How do I hire a contractor? |
| A. | The most common process is through a consultant, but there may be some bias in the consulting engineer or architect's recommendation. The yellow pages of the telephone directory is an obvious source of local contractors, but there are no credentials posted with the listing. The best way is to research the contractors in your area, or contractors specialized in a given area of construction and make a selection based on availability, experience, references and quality of service. Contractors who are members of the Ontario Sewer and Watermain Construction Association promote high quality and ethical construction services. |
FAQs
