Quebec construction industry wants major reforms in public contracts

A coalition of construction companies says Quebec could save $14 billion over the next 10 years by cleaning up its public contracting procedures and, above all, by instituting professional and competent project management.

Two major construction associations and two independent institutions, the Montreal chapter of the Project Management Institute (PMI-Montreal) and the Centre for Expertise and Research on Urban Infrastructure (CERIU) are joining forces to bring attention to the issues.

"If the best practices in project management - we're talking about project management in terms of work planning, cost control, human resources management, but also involving stakeholders, such as certain partners, whether contractors, consulting engineers or project managers, and better-managed procurement - by doing so, the risks or delays, all of that will be better mitigated," said Kateri Normandeau, president of PMI-Montreal, in an interview with The Canadian Press.

The $14 billion figure is based on an international study by PMI Global, which shows that the implementation of good project management practices can optimize financial resources by 10 per cent. However, the Plan québécois des infrastructures 2022-2032 provides for investments of $142.5 billion, hence the figure of $14 billion.

The figure is, therefore, probably underestimated since the same logic applies to public contracts at other levels of government.

URGENTLY ADDRESS PROJECT MANAGEMENT

The issue of project management is at the heart of the coalition's demands.

"Clearly, one of the main issues that are raised by the industry is the lack of expertise at the client's end," the coalition said. "This lack of project management expertise impacts the project definition, the process and then the call for proposals."

The coalition, whose two other members are the Association de la construction du Québec (ACQ) and the Corporation des entrepreneurs généraux du Québec (CEGQ), notes a clear drop in interest in public projects among contractors and construction professionals, precisely because calls for tender are poorly done.

A study conducted a year ago by the firm Raymond Chabot Grant Thornton shows that 72 per cent of contractors and 82 per cent of professionals (architects and engineers, in particular) reject public contractors because of the conditions they offer.

TOO MUCH RED TAPE

Despite repeated calls for improvement and countless political promises to do so, the problems of long, cumbersome and complex processes and payment delays persist.

Since the construction market is booming and the labour shortage limits their ability to adapt to often non-standard public contracts, contractors and professionals can afford to choose, Normandeau said.

"If there is a cumbersome contract and payment delays and you have a choice between another opportunity at the same time where there is no such cumbersomeness or payment delays, they are business people, they will make business decisions," she said. "I've heard some firms say that they only choose to do business with private companies, that it's a choice they've made in the way they operate because public projects are not attractive enough. It becomes a strategic choice."

The attractiveness of a contract can be summed up in two key factors: the way it is carried out must be adapted to the type of project and subject to good project management.

The coalition is asking Quebec to establish better conditions for access to public contracts and to develop a centre of excellence in project management with trained or certified people.

QUEBEC AND MUNICIPALITIES: THE WORST

Quebec is particularly targeted, since the study cited above places the Société québécoise des infrastructures, the health network and the education network, respectively, in second, third and fourth place when it comes to identifying the sectors that have experienced the worst drop in interest from contractors and professionals between 2016 and 2021.

However, it is the municipalities that rank first in this inglorious list, which tends to prove right those who talk about the lack of competence of project managers. Apart from the big cities, most small municipalities struggle to provide this expertise.

It is also worth noting that the federal government and departments are at the very bottom of the list, suggesting that Ottawa has developed better practices.

Quebec's Ministry of Transport also ranks high, suggesting that many of the contracts it issues are relatively standardized and that many contractors have developed habitual reflexes when dealing with these projects.

JONATAN JULIEN PROMISES

What could change in Quebec after so many years of unfulfilled promises?

The coalition is counting on signals from Quebec.

"The Quebec government, Minister Julien responsible for infrastructure, really verbalized at the last CEGQ conference that he wants to improve project management practices," said the PMI-Montreal president.

The ball, according to the coalition, is, therefore, in minister Julien's court and his government.

This report by The Canadian Press was first published in French on March 17, 2023.