Mega-projects shut out smaller firms

The Construction Design Alliance of Ontario, an organization representing a cross-section of organizations including Consulting Engineers of Ontario, is raising an alarm about the disadvantages of “bundling” or aggregating projects into one mega-size endeavour.

In particular CDAO points to the $4 billion project to build the new Eglinton Crosstown transit line in Toronto. Infrastructure Ontario chose to bundle the construction of the stations and maintenance facilities into one massive project. As a result, only two consortiums have expressed interest, one from Canada and the other a multi-national conglomerate.

The chair of the CDAO, Clive Thurston (who is also president of the Ontario General Contractors Association), said in a release: “Simply put, bundling the station and maintenance facility construction into one contract has hamstrung the tendering process, limited competition, stifled innovation, and isolated the small- and medium-sized construction and design firms. … This procedure will cost taxpayers more in the end. It is a case where bigger is not always better.”

The Ontario contractors did an analysis on behalf of CDAO that showed that if the tender for the Eglinton Crosstown had been broken down so that stations had been tendered individually, then up to 10 small- and medium-sized, Ontario-based construction and design firms would have bid on each of the smaller projects. This, approach, they say, would have increased competition for the work and lowered the cost to taxpayers, potentially saving up to $500 million.

To reach the full CDAO release, click here.