BLOG: Bonding / contract issues and how to handle them at the B.C. Road Builders Fall Conference

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by JOC Digital Media

Bob Sloat with the Surety Association of Canada and Jenny Pleice with B.C. Ministry of Transportation and Infrastructure are the speakers during the first rapid fire workshop of the morning at the B.C. Road Builders and Heavy Construction Association fall conference in Kelowna. They are speaking about Bonding/Contracting issues and how to manage them.
BLOG: Bonding / contract issues and how to handle them at the B.C. Road Builders Fall Conference

Sloat says contractor/sub contractor/supplier relationships are getting more complicated and this is compounded by changes in contracts. There are difficulties with communication, he said, and added there can be multiple reasons for a sub's default.

These can include unqualified contractors, insolvency (often reasons outside of construction).

Sloat also listed reasons that subs can default for non-financial reasons. These can be that they are over extended, inability to complete and incapacity of key people. Other reasons include unpaid trades resulting in liens as well as warranty.

Pleice is now at the podium, and she is discussing understanding the owner, from a ministry perspective.

The owner's responsibility/relationship is with the prime contractors, she said. However, Pleice said, the ministry is seeing more issues being raised with it from subcontractors.

She is now discussing how a project's scope and schedule changes can affect the bond. Bonds guarantee the contract and guarantee the subs and suppliers will be paid, Pleice explained. Surety companies do this by rigorous underwriting procedures. The bond guarantees the scope of the work for the tendered contract.

She said that the underwriting is time sensitive, which means that bonds cover the contractual time frame that can be one, two or three years. She has moved onto bid bond submission. Pleice mentioned the ongoing issue of tender close and bid bonds with issues, and said that if   bid bond has any errors or deficiencies, it be reviewed and may result in tender disqualification. She stressed that contractors need to submit compliant bid bonds.

The B.C. Road Builders and Heavy Construction Association Fall Conference is taking place at the Delta Grand Hotel in Kelowna B.C. from Sept. 13-15. Check back for stories and videos from the conference.

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