Assessments Against a Contractor


When costs are incurred by Public Services and Procurement Canada (PSPC) on projects as a result of a lack of performance by the contractor in terms of time or quality, the Project Manager (PM) must consider possible assessments against the contractor to recover its losses and damages.

Criteria for Assessments

Assessment Costs

In all assessments, PSPC must substantiate their case, and provide detailed meticulous technical and cost records to identify the specific costs incurred. Assessments may include both internal and external costs such as:

Internal Costs

External Costs

Other Costs

Reasons for Assessments

Under GC 4.3: Damage to material, plant and equipment supplied by PSPC.

Under GC 6.2: Subsurface Conditions. Contractors have the right to claim for extra costs incurred if subsurface conditions are substantially different from those that could be reasonably expected. PSPC has the right to a reduction in contract amount if the opposite conditions result in savings. Reductions in the contract amount are not often obtained. Contractors usually claim for extra costs incurred and consequently, the PM should not overlook PSPC rights.

Under GC 6.4.1: Determination of Price. The contract provides for amending unit prices and the PM should realize that they may be negotiated 'downward' as well as 'upward'.

Under GC 5.10: Assessment and damages for late Completion. To determine if completion of construction is late:

The following may be considered if construction is not completed within the established construction completion date:

Failure to meet specified requirements. Assessments should be made against the contractor promptly in cases where PSPC must accept inferior quality material (that may result in a shorter useful life), or inferior quality equipment (perhaps higher operating costs) than called for in the contract.

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