01-34 GENERALS SPRING25 PT - Flipbook - Page 13
3. FACILITATE EVALUATION OF SUBSTITUTIONS – Add a line
item to the general contractor’s bid form or, in the case of a construction management project, the trade contractor’s
bid form - to help owners assess the cost
and feasibility of incorporating to newly
approved Canadian-made alternatives.
4. COLLABORATION NOT CANCELLATION – Owners
should avoid canceling projects due to
tari昀昀s and instead work collaboratively
with industry to manage cost impacts.
The bid closing date determines whether a tari昀昀 change quali昀椀es for a contract
price adjustment under GC 10.1. However, given how 昀氀uid the situation is, it is
OGCA’s opinion that even if tari昀昀s were
imposed in the days leading up to bid closing, their full impact may not yet be clear
across the supply chain. We suggest owners should approach this with 昀氀exibility
and fairness, recognizing that the impacts
may take time to assess and address.
Tariffs and contract price adjustment
Under CCDC 2-2020 GC 10.1 the adjustment to the contract price based on
changes to taxes or duties is mandatory,
not permissive:
While the contractor or trade contractor
THEGENERALS.NET
will still need to demonstrate the change,
it will be entitled to the adjustment.
While the hope is the parties will agree to
an adjustment, GC 6.6 (Claims for a Change
in the Contract Price) likely provides the
process for resolution under the relevant
CCDC contracts, if necessary. [Note that
under the CCDC 14 (2013) the process for
the adjustment is expressly GC 6.6 (Claims
for a Change in the Contract Price)].
In addition to cost impacts, tari昀昀s may
also a昀昀ect project schedules due to budgetary concerns, supply chain disruptions
and material availability. Public sector
owners and buyers of construction should
remain open and receptive to reasonable
schedule adjustments to accommodate
these challenges.
In dealing with the issue of tari昀昀s, it
will likely not be a simple matter of presenting documentation, as tari昀昀s a昀昀ect
costs throughout the supply chain—
whether in raw materials like copper or
昀椀nished products like lighting 昀椀xtures—
making direct attribution challenging.
For change orders, consider, at the very
least, inserting a term in the change order
permitting adjustments similar to CCDC
2-2020 GC 10.1 to ensure fairness.
Overly rigid approaches to proving cost
impacts or mitigation e昀昀orts can easily
create unnecessary roadblocks—not just
for adjusting the contract price, but for
getting the project built and the relationships between all parties. Given the
unpredictability of supply chains, pricing
and tari昀昀 impact, the focus should be
on fairness and practicality rather than
adding extra hurdles.
Open, clear communication and
cooperation between owners, contractors, trades and consultants will be key to
managing these obstacles.
As in all contractual situations, the OGCA
strongly recommends that the parties
involved obtain appropriate independent
legal advice. Please note that this communication does not constitute legal advice,
but is intended to inform our members
about the potential pitfalls from tari昀昀s.
Reasonable and proactive decision
making will help keep projects on track,
continue to build our communities and
support industry stability. If you have
questions or need guidance, please reach
out to the OGCA directly at info@ogca.ca.
Sincerely, Giovanni Cautillo, President
Ontario General Contractors Association
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