Consulting engineers concerned about new western Canada trade agreement

You would expect an inter-provincial trade agreement that aims to enhance trade in goods and services, facilitate freer flow of investments and improve worker mobility would be well received by Alberta, British Columbia and Saskatchewan’s pro-business consulting sectors. That is so with much of the three-year-old New West Partnership Trade Agreement (NWPTA) involving Canada’s three westernmost provinces. Still, concerns about NWPTA persist among consulting engineers.

Much of that disquiet stems from placing on engineering procurement the same rules as those that are applied to government purchases of goods — be it tires or paper clips. Through NWPTA, participating provinces agree to remove inter-provincial trade barriers and harmonize regulations affecting trade, procurement, innovation and international cooperation. B.C. and Alberta launched the comparable Trade Investment and Labour Mobility Agreement (TILMA) in 2007. TILMA’s ancestry tracks back to the 1995 Agreement on Internal Trade, a less detailed commitment by all provinces to enhance inter-provincial trade and reduce barriers.

July 1, 2013 is the date for full implementation of TILMA, which is when Saskatchewan fully aligns itself with Alberta and B.C. in many regulatory areas – licensing standards among them.

Al Schuld, P.Eng., registrar and interim chief executive officer with the Association of Professional Engineers, Geologists and Geophysicists of Alberta (APEGGA), notes that to a large extent inter-provincial reciprocity for licensed professionals already existed before TILMA and NWPTA. If anything, the latter made such transfers even more seamless.

Consulting Engineering of Alberta Registrar and chief executive officer Ken Pilip, P.Eng., agrees that TILMA and NWPTA have helped streamline the mobility of engineers and geoscientists between the three provinces. 

Pilip is less sanguine about the accord’s requirements regarding the procurements of services. Engineering, along with several other professional services, such as architecture, are included, but legal services are exempt.

As the three-province accord stands, “open and non-discriminatory” bidding procedures must be applied by governments right down to the municipal and school board level on services contracts worth $75,000 or more. Well intentioned as NWPTA may be, Consulting Engineers of Alberta (and its neighbouring associations) sees the agreement potentially undermining quality based selection (QBS), the value-based principle that for years the consulting industry has advocated nationally and internationally. Through QBS, project proponents are encouraged to choose consultants on the basis of their technical and design merits; they would review the consultants’ fees only afterwards.

Craig Clifton, P.Eng., Vice President with Clifton Associates in Calgary, sees NWPTA rules as “commoditizing the industry” and encouraging “a race to the bottom” whereby, at the expense of trust and relationship-building, price becomes central to selection.

It’s true that under NWPTA it becomes more difficult to work from a list of pre-qualified consultants, and a request for proposal, even for fairly minor projects, sometimes results in a flood of responses. At first glance, that might appear to benefit clients. However, consultants interviewed suggest it may simply overwhelm clients, particularly smaller municipalities that lack the resources to conduct extensive evaluations. In such circumstances, it becomes tempting to take the path of less resistance and select solely on price.

Disregarding the quality based selection process may lead to hiring an out-of-province consultant unfamiliar with local conditions — say Alberta’s glacial soils — or design needs for cold climates. And that could pose a threat to the very public safety professional engineers and their associations are committed to protect.

Long-term, clients may end up paying more than they would have done had they selected a consultant who is knowledgeable about local conditions and peculiarities, and who has an ongoing relationship or commitment to particular clients and communities.

A big field of competitors may also prove costly to bidders, only one of whom is likely to win the work. Faced with such odds, smaller, local would-be entrants simply may drop from the competition. Nevertheless, the cost of preparing a larger number of rejected responses eventually will be factored into consultants’ prices. Under NWPTA, one central Alberta community reportedly advertised for a civil project in which engineering services were expected to run between  $150,000 and $200,000. The RFP attracted 64 bids. Assuming each bidder spent $10,000 preparing a submission, it would still entail outlays on preparation equivalent to three-to-four times the actual value of the contract. That outlay amounts to a waste of time and resources. As well, eventually the costs will land on the doorsteps of clients — including municipalities and taxpayers.

Former CEA President Jeff DiBattista, P,Eng,, a principal with DIALOG in Edmonton, believes that NWPTA shortcomings could be solved by exempting professional services, notably engineering. Furthermore, DiBattista urges a legislated use of quality-based selection rather than constantly educating local officials about it — a costly and onerous endeavour in the revolving-door world of local politics. He notes that the required QBS information is available already in Selecting a Professional Consultant, an”InfraGuide” best-practices document that is geared to civil leaders and was developed by the National Research Council and the Federation of Canadian Municipalities.

Craig Clifton believes that some weaknesses can be averted by raising the current $75,000 threshold where NWTPA kicks in for engineering services. Doing so likely would reduce the number of bids reaching clients and foster more enduring and trusting relationships between consultants and client agencies. Secondly, Clifton agrees a re-emphasis on QBS also would lead to improvement. 

Despite the furrowed brows the tri-partite agreement has caused, Ken Pilip stresses: “We support the NWPTA 100 per cent except it should not have included professional services. We do not have an issue with NWPTA in principle. It is a very positive document that harmonizes regulations and provides for mobility of goods and services. We’re not against competitiveness but we need a less complicated process to evaluate professional services.”

Nordahl Flakstadt is a freelance writer based in Edmonton.