For example, the preparation of engineering drawings, which layout a street plan or sewer and water system for a new construction subdivision are clearly construction related services.

Such drawings may, in themselves, enhance the value of the land, but those drawings do not alter the physical nature of the premises.

On the other hand, there are many activities which do alter the nature of premises, but which will only rarely be viewed as being construction-related.

The most obvious of such activities are the annual plowing of a farmer’s field and the sowing and reaping of the crops.

These activities are normally considered as agricultural in nature more than as being forms of construction.

Yet similar activities, such as landscaping, are usually grouped with construction.

In essence, the construction industry is the connecting thread between the various segments of the economy. It comprises approximately 12 per cent of Canada’s GDP. It provides the physical plant within which many other economic activities are conducted.

At the same time, in building improvements, the construction industry utilizes many products and services produced by other sectors of the economy, particularly the manufacturing sector. Because of this intimate connection, it is often hard to trace the precise boundary between construction activities and non-construction activities.

For instance, a wholesale material supplier may readily be acknowledged to be part of the construction industry.

It is less clear that the manufacturer of the same materials, sold by the wholesaler, is also within this category.

In many cases, the answer to the question of whether a given activity constitutes construction will depend upon the circumstances in which that activity is conducted.

For instance, the installation of industrial equipment or fixtures may be either manufacturing or construction.

Where such equipment is installed in an existing physical plant, without alteration of the premises, it is likely to be considered a manufacturing activity.

However, where it is installed as an integral part of the physical improvement of a premises, as well as the installation of equipment – where substantial modification is required to the flooring, mechanical systems and electrical wiring of the premises, it is more likely to be seen as construction.

The distinction between construction and non-construction activities may be more difficult to explain.

As noted above, the plowing of land is rarely considered to be a construction activity, but the terracing of that same land normally will be viewed as construction.

In such a case, the distinction seems to be the same purpose or degree of the physical alteration which is made.

However, one might attempt to define construction activities in conceptual terms, despite the inherent difficulties in doing so. Terms such as “improvement”, “materials” and “supply of services” essentially divide construction into three related groups of activities. Design includes the work of architects and engineers, production is the execution of the project and the third term would include the manufacturing, transportation, warehousing and storage of goods.

Stephen Bauld, Canada's leading expert on government procurement, is president and CEO of Purchasing Consultants International Inc. He is also the co-author of the Municipal Procurement Handbook, published by LexisNexis Canada. He can be reached at stephenbauld@bell.blackberry.net.

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