Uniform process and framework with respect to proceedings against construction contractors for recovery of Public Services and Procurement Canada costs

The Real Property Branch (RPB) has adopted a uniform process and framework with respect to proceedings against construction contractors for the recovery of Public Services and Procurement Canada (PSPC) costs. These costs are incurred as a result of the contractor's negligence/lack of performance in terms of time or quality on projects as per General Condition 2.2 Interpretation of Contract and 5.10 Assessments and damages for late completion or General Condition 1.8 Laws, permits and taxes. These costs would include for all costs incurred by PSPC, which the department would not otherwise have incurred had the contractor performed all the work of the contract within the specified terms of time and quality. Proceedings against contractors for the recovery of these costs may be required in cases where the contractor:

Negotiation between the project manager and the contractor remains the optimal methodology to recover PSPC costs. Contractors must be given every opportunity to resolve all outstanding issues. At the same time, the contractor should be duly advised that the department intends to take action under the appropriate General Conditions clauses of the contract. Upon formal notification to the contractor of default or dispute and where a performance bond is in place, the Surety must be notified and be involved in the resolution as per the conditions of the performance bond (see 'Primer on Surety Bonds in Federal Construction Contracts—Part 2—Guidelines on Handling Claims Under Surety Bonds'). Proceedings against contractors for recovery of PSPC costs usually take place following a failed negotiation process where PSPC has no other choice remaining but to take 'all' or 'a portion' of the work out of the contractor's hands, and direct the Surety to complete the work. In such cases, the project manager must mitigate all losses and damages and ensure an audit trail which fully demonstrates such action. In cases where the Surety completes the contractual work, they become responsible for all costs incurred by PSPC as a result of the contractor's default. Where there is no Surety that could be held liable, such as damage to property, then PSPC must proceed diligently to rectify the damages and be prepared to defend its actions in a court of law. Categories of costs incurred in overseeing rectification and completion of the work which should be considered and carefully substantiated are:

Proceedings against contractors for the recovery of PSPC salary and other miscellaneous costs must be fully justified as costs which the department would not have incurred had the contractor performed all services satisfactorily. PSPC costs must be specifically incurred as a result of the contractor's negligence or lack of performance in terms of time or quality on the contract.

Roles and Responsibilities in Proceedings

Project Manager

Contract Officer

Project Management Activities for PSPC Proceedings against Construction Contractors

Forms, samples and checklists

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