OGCA steps up fight against third party verification services

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Association calls out York Municipality for contractor sewer and water pre-qualification requirements, after accepting CoR as an alternative for safety compliance

Ontario Construction Report staff writer

The Ontario General Contractors Association (OGCA) has pushed its fight against third party verification services into high gear as it speaks out against a GTA-area municipality’s decision to pilot-test one of these services, ISNetworld, for contractor pre-qualification on municipal sewer and water projects.

OGCA president Clive Thurston sent a letter to The Regional Municipality of York on Sept. 14, reminding municipal officials that they had earlier agreed to not require the use of the third-party services for health and safety qualifications for contractors with the Infrastructure Health and Safety Association (IHSA) Certificate of Recognition (COR).

“As you are aware from our discussions over their use for safety, the industry does not support the use of these firms for a number of substantiated reasons, including the following:  They do not transfer any risk, cannot confirm that what they are telling you is actually in fact being done, have little knowledge of the Ontario construction industry (being foreign based); and charge fees simply to collect paperwork,” Thurston wrote in the letter addressed to Mike Rabeau, York Region’s director, capital planning and delivery, environmental services, and Stan Gal, director, supplies and services.

“During our discussion last time on safety, we proved they are not experts in this field and, in fact left you exposed. Two independent legal opinions supported that, as an owner you were at risk. You decided to accept CoR – the right decision,” Thurston wrote.

“To say these firms ‘enhance our contractor management program’ is disingenuous. They do nothing to enhance anything. We challenge you to explain the benefit of using such companies to impose a ‘tax’ on the industry that produces no value.”

Thurston says some OGCA members find York Region’s decision especially frustrating because they cancelled their membership in the third party service when York Region decided to allow CoR as an alternative, but now face the prospect of having to re-register and again pay the service’s sign up fees, and start going through the painful paperwork shuffle problem again.

In an interview, Rabeau says the pre-qualification initiative with ISNetworld is a one-year pilot project.

Rabeau said that if contractors signed up for ISNetworld for health and safety requirements, their membership would still be active, even if they stopped using it, and they would not have to repay the fee to use it for the pre-qualification process. “Not one single contractor has cancelled as part of our pilot and had to repay ISNetworld,” he said.

“Already close to 60 per cent of our active bidders are registered in the ISNetworld system.”  The system, he said, would provide a fair, transparent and objective method for ensuring standardized pre-qualification requirements.

He said the Greater Toronto Sewer and Watermain Contractors Association (GTSWCA) “are supportive of our initiative.”

Giovanni Cautillo, executive director of the GTSWCA and the OSWCA, said York Region has “corporately made the decision to employ ISNetworld . . . because of the corporate mantle, certain departments are straddled with this.  They have to work within the confines of what they are given.”

“We are going to support our municipal partners,” he said. “We would prefer one standardized system across municipalities.”

“I’m not overly ecstatic about it, but am willing to work with the Region, giving them a system to prequalify at least for linear work.”

The OGCA began raising the red flag on the third-party verification services last year, as members started complaining about what they said were strange, onerous and excessive paperwork filing requirements that often had little to do with the member businesses’ real safety circumstances. Worse, contractors reported that they had lost direct access to their clients to communicate and resolve issues and sometimes were “red flagged” to be ineligible for work because of paperwork filing errors or delays that were not their responsibility.

The OGCA responded by researching the legal situation, advocating for the use of CoR for safety verification (a program audited by field inspectors, and therefore not just a paperwork shuffling game).

In September, the association published an extensive Guide to Dealing with Third Party Safety Verification Companies (TPSVC), in which the OGCA encourages participation in a petition to the Minister of Labour and the Ontario Legislature, and urges members to respond to bidding opportunities by saying they would be happy to bid, but not under terms requiring TPSVC participation.

“It is vital you push back strongly,” the OGCA guide says. “Do not be intimidated. You will have the full support of the OGCA and its members.

“Remember the owner would not have asked you to prequalify or bid if they did not respect your professionalism and abilities.”

Thurston indicates the third party verification companies are draining the industry.

“With several of these (third party verification) companies existing, there can be 10 different owners with 10 different companies, that can cost (a contractor) $100,000 a year minimum to sign up the paperwork,” he said.

John Aquino, the president of Bondfield Construction and OGCA’s 2014-15 chair “has put himself right out there,” Thurston said. “Bondfield will not participate with these firms and waste money – if you want (Bondfield) to bid the work, you had better find other ways to do things.”

In a public memo, the OGCA say to members: “We realize the difficulties for many of you in taking a stand but it is important to remember we are not organizing a boycott of owners. We are not saying we will not bid owners. We are saying NO to these companies that impose an unfair ‘tax’ on our industry while providing no value to anyone.”

In an interview Rabeau said the initiative is a pilot project, and will be evaluated after a year. Rabeau said that this pilot initiative will not impact contractors in the realm of $100,000 by any means. Cautillo at the GTSWCA said the association will continue to have quarterly meetings with York Region and will provide feedback on the initiative.

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