Small firms worry about bulk-build schools shutout
Smaller construction companies in Saskatchewan worry they’ll be shut out of a new provincial plan to bulk-build nine new joint public-Catholic schools, an industry advocate says.
Mark Cooper, president of the Saskatchewan Construction Association, said if the Saskatchewan government opts to choose just one contractor to oversee the construction of nine new buildings, small and medium-sized general contractors based in the province have no chance of landing the job.
“We don’t think it’s the right (move), because it has an impact on smaller and mid-size business,” Cooper said.
Since only a handful of construction companies are big enough to bid on such a large contract, the bid prices could be higher, costing the province more in the long term, Cooper said.
“We don’t think bundling (the contract) is in the best interest of taxpayers.”
On Tuesday, the Saskatchewan government announced a plan to use public-private partnerships, or P3s, to build nine joint public and Catholic school buildings in Regina and the Saskatoon area to address rapid growth and bulging urban classrooms.
In an interview, Education Minister Don Morgan said the government intends to hire one bidder to oversee the synchronous design and financing of all nine schools, although the construction work may be done by many different contractors.
In another interview Wednesday, Morgan said he has met with the construction association and heard the group’s concerns about the scope of the project.
“We’re very cognizant of the size of the contracting capacity in our province, so we want to make sure we’re able to reflect that in how we go forward,” Morgan said. “It may make a difference about how small the bundles are, how they get subdivided again, whether we tier things.
“We don’t want to do anything that would preclude Saskatchewan contractors from being able to bid on the projects, and we want to make sure we aren’t taking away the capacity we need in other projects as well.”
Cooper says he can only think of three corporations that could handle a contract this large. Although local tradespeople such as electricians and plumbers are still likely to benefit from the work, small and mid-size general contractors could be out of luck, he said.
He’s lobbying the government to break down the construction contracts into groups of two or three schools to give smaller companies a chance.
Premier Brad Wall reiterated Thursday the government wants to find ways to involve local companies.
“This, though, is about getting schools done at a significantly lower cost to taxpayers and getting them done in a timely way, so we don’t want to sacrifice what I would view as the prime objective of bundling schools, which is savings and time, in the interest of economic development imperatives,” Wall said.
There are still ways smaller businesses can play a role in bulk builds, Michael Atkinson, president of the Canadian Construction Association, said.
In Alberta, two smaller contractors teamed up to successfully bid on a P3 contract to bulk-build schools in that province, Atkinson said.
In Ontario, when the government synchronously built several provincial police stations, the winning bidder contracted construction work out to many small local companies, he said.
If the government wishes, it could also dictate some of the work be local, or award more points during the bid evaluation process to bidders with local knowledge and connections. Those are not techniques the CCA endorses, Atkinson said.
After months of consultation and design workshops, it will be Crown corporation SaskBuilds that crafts a request for proposals, which is expected to be issued in early 2014.
Whether Saskatchewan has enough construction workers and tradespeople to meet the demand of so many major construction projects at once is also in question.
Wall acknowledged that challenge Tuesday, citing the 300 additional apprenticeship training seats the government will add in the province this year.
Jeff Ritter, CEO of the Saskatchewan Apprenticeship and Trades Certification Commission, said the supply of tradespeople has been growing with the increased demand that comes with an economic boom.
The commission issued 1,150 trades certificates in 2007-08, and that number rose to 1,682 in 2011-12.
Seeing the school projects on the horizon, employers are likely to begin hiring more apprentices, who get most of their training on the job, Ritter said.