DCA News

Here you can read all kinds of info relating to Construction and the Association!

New Construction Act

 Daily Commercial News – October 26, 2018

 Renewed optimism under new Construction Act and here’s why

 On July 1, 2018, the first part of Ontario’s new Construction Act came into effect. The Construction Act is the most wide-ranging change of rules in the construction industry in Ontario since 1983. These broad changes are going to have a major impact on our industry.

Under the new prompt payment rules, the industry can expect to see a much faster flow funds from             project owners all the way down to sub-trades and suppliers. This will lead to fewer hung receivables      and better cash flow across the industry as a whole.   When future disputes do arise between parties, the new adjudication rules should also provide a faster and clearer path towards resolution. Sureties are also required to be much more responsive when dealing with performance and labour and material payment bond claims. The overall intention is to keep projects and the flow of funds moving forward and to provide a fairer marketplace for all parties. While we cannot focus on all of the changes, there are a few key ones that are important to understand for all subcontractors.

Prompt Payment — Improving the Flow of Contract Funds

Under the new prompt payment rules, which will come into effect on Oct. 1, 2019, an owner must pay a             contractor within 28 days of receiving a ‘proper invoice’, unless the owner delivers a notice of non-payment in             the prescribed form within 14 days. This is a significant improvement from the past, when sub-trades were often    forced to wait up to 90 days or even longer for payments.

A ‘proper invoice’ must:

    • describe the services or materials supplied;
    • the period during which they were supplied; and
    • the authority under which they were supplied.

A contractor who receives full payment from an owner must

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The Construction Change Order Manifesto

We can all agree the construction change order process is very slow. When a change request comes in from an owner or general contractor, most times contractors start work and incur the costs and don’t receive revenue until much later during the project or sometimes not at all.

How do we fix this? It starts with a review of your contract. This is the Construction Change Order Manifesto.

As a contractor, I should… 

  • Check my contract provisions for the change request process including authorization and specific terms about timelines for responses to change requests.

If there is nothing in the contract about change requests, I should…

  • Set a goal to memorialize a process including timelines for response at the start of a project. The wording will include what all parties will work towards. This will get memorialized in minutes of meeting or correspondence.

Almost all construction contracts in Canada state that the contractor must have a signed change order before billing and commencing work. It’s extremely rare to bill for change order work prior to issuance of the change order.

 

 

As a contractor, I should… 

  • Provide written notice upon the change arising.

In the written notice, I should…

  • Explain why the change was not part of my original contractual scope.
  • Refer to drawings, specifications or contract wordings. This is where clear scope is key.
  • Promptly provide detailed quotes for the work.

 

 

4 important items to include in the quote process

  1. An expiry date on all quotations.
  2. Use a standard corporate form and log to follow up if you hear nothing back.
  3. Include any extension of time required, if applicable.
  4. An agreement when the work is required and confirmation to proceed before you execute or warn parties when site conditions are changing and authority to proceed
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Current DCA Member Trade Information is Essential

DCA Members,

Always review and make sure the DCA has your up-to-date information in the Membership and Classified Listings Section. It is important for your company to be displayed on the site correctly.  This web site is the source for DCA member trade information - current company data is essential.

 

Email changes to This email address is being protected from spambots. You need JavaScript enabled to view it.

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Costly Bidding Mistakes

13 Costly Bidding Mistakes & How to Avoid Them - November 16, 2016 - Kendall Jones

The Morning Blueprint by Construct Connect

Putting together a winning bid proposal is a lot more complicated than putting some numbers together and hoping for the best. Good bid preparation requires a lot of time and effort that involves everything from reading and fully understanding the plans and specifications to accurately estimating costs for labor, materials and equipment. Making even the smallest mistake can mean the difference between having a winning bid proposal and missing out on a coveted project.

- Bidding the Wrong Projects

- Incomplete Bid Forms and Documents

- Inaccurate Takeoffs

- Failing to Visit the Job Site

- Failure to Seek Clarification

- 2+2= Wrong

- Not Evaluating Equipment Needs

- Not Qualifying Subcontractors

- Labour Implications

- Not Factoring in Overtime

- Misunderstanding Material Requirements

- Rushed Bids

- Overlooking Risks

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5 Pro Tips to Get Paid Faster

Who Wants Prompt Payment?

Construction industry employees want prompt payment. Spending energy and costs towards prompt payment is frustrating, time consuming and therefore not productive in building a business.  It’s hard enough to secure jobs at a price that works. It’s about cash flow. The contractor (general or subcontractor) shouldn’t fund someone else’s project.

The vast majority of owners and contractors honor their contractual obligations and do so promptly. It’s bad business not to. The ones that do not, threaten your business. A hung account receivable could leave a sizable hole in the current asset side of your balance sheet. Suppliers, shareholders, banks and bonding companies could therefore feel the impact.

Your surety leverages support levels based on a number of factors and financial metrics including how much working capital is in your company.

5 Pro Tips:

A receivable that is well overdue, or due from an entity of questionable solvency may not be viewed as current and thus could directly affect your capacity to access the surety credit you need for your business.

2 View the Surety Broker and the Surety as your partners in the business. Interests are aligned regarding prompt payment.

3 Tender bond documents to an unknown Owner include the “Financing Clause” as standard. The Financing Clause requires the Owner to furnish evidence that they have financing or funds committed to cover the costs of the project, before requesting performance bonds. Expect tough questions. The Surety does not mind being the one to ask. We are in this together and anything that protects you and your balance sheet is good for us as well. And quite frankly an Owner should expect those questions and diligence when awarding sizable construction contracts.

4 If you are a sub-trade, you can query an owner to see if you

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