For the first time, companies that build schools and buildings for the Quebec government will be able to adjust the cost of their bids along the way to reflect variations in material prices.
This change in the policies of the Société québécoise des infrastructures (SQI) comes as several entrepreneurs have had to terminate public contracts at a loss over the past year, marked by shortages and dizzying price increases for several products.
“This is something that we have been asking for a long time,” explains Guillaume Houle, spokesperson for the Association de la construction du Québec (ACQ), which represents contractors active in the province.
Until now, only the calls for tenders from the Ministry of Transport included an adjustment mechanism for certain products only, such as bitumen and gasoline, the prices of which are very volatile.
SQI, which is responsible for the planning and construction of roads, schools, hospitals and other public infrastructure, will now allow a price adjustment for most materials used in construction, including steel, timber, aluminum or glass.
“In order to reduce the repercussions of the increase in the price of bids and to better balance the risks related to the volatility of the prices of materials, the Company is temporarily incorporating a clause to adjust the price of certain materials in the contractual documentation. of certain projects ”, specifies the SQI.
This is a temporary measure, but could be in place for some time. Supply chains are yet to recover from the shock of the pandemic, and climate disasters, such as the recent flooding in British Columbia, could prolong uncertainties over price developments.
This change of course by the SQI will benefit both the government and those who carry out public works, believes the group of construction contractors.
Recent and sudden price increases for some materials have had an impact on the tendering process. There were fewer bids, and the prices for work rose because bidders did not want to risk working at a loss.
It was not possible to know from the SQI whether projects had to be delayed or postponed due to the absence of bidders or bids deemed too high.
More complex
The SQI and the construction companies have agreed on a list of materials and on an index developed by Statistics Canada to follow in real time the evolution of the prices of each of them.
The adjustments may be upwards or downwards, depending on the evolution of prices during the duration of the work. This new way of doing things will increase the complexity of public works for those who give the contracts as for those who carry them out. It is true, says the spokesperson for the ACQ, “but it is a way of protecting themselves as much for the companies as for the government”.
No government call for tenders has yet been launched with the new rules of the game. We are waiting for the first before the Holidays, indicates Guillaume Houle.