Construction Economist Journal - Winter 2020

BRITISH COLUMBIA • PRAIRIES AND NORTHWEST TERRITORIES • ONTARIO • QUÉBEC • MARITIMES • NEWFOUNDLAND AND LABRADOR

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CONSTRUCTION ECONOMIST

Canada’s Leading Journal in Construction Economics

ciqs.org

The Journal of the Canadian Institute of Quantity Surveyors Le Journal de l’Institut canadien des économistes en construction

WINTER 2020

• Quantity Surveyors & IPD – Jon Gilford • Reserve Fund Study – Michael Zegarelli • Self-Employed Quantity Surveyors – Jim Bush • Legal Corner – Richard Wong & Jagriti Singh

Collaborative Resolution: Lakeland has recently completed mandates as retained Experts in respect of: Scope Schedule Cost Value Damages

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Review | Implement | Deliver Daniel Josiah BSc (Hons), PQS, MRICS, ACIArb Director, Contracts & Commercial dj@lakelandconsulting.com 647.637.1449

Richard Fogarasi MBA, BASc (Hons), P.Eng Vice President rf@lakelandconsulting.com 416.456.6446

2150 Winston Park Drive, #206-208, Oakville, Ontario, L6H 5V1, Canada

Ricardo Raymond BSC (Hons), Dip. C.E. Senior Contracts & Commercial Specialist rraymond@lakelandconsulting.com 647.294.7136

905.829.4000

www.lakelandconsulting.com

The mission of CIQS is to promote and advance professional quantity surveying and construction estimating; to establish and maintain national standards; to recruit, educate and support our members.

Canadian Institute of Quantity Surveyors 90 Nolan Court, Unit 19, Markham, ON L3R 4L9 t. 905/477.0008 f. 905/477.6774 toll free. +1 866/345.1168 e.info@ciqs.org www.ciqs.org

Chief Executive Officer Sheila Lennon, CAE.................... . . . . . . . . . . . ceo@ciqs.org Editor Arif Ghaffur, PQS(F)................... . . . . . . . editor@ciqs.org Assistants to Editor Shane McKernan, PQS Yasmin Abdiladif, Dip. C.E.T. Carl Pedersen, PQS Send Change of Address to: Canadian Institute of Quantity Surveyors 90 Nolan Court, Unit 19, Markham, Ontario L3R 4L9

CIQS Board Chair: Erin Brownlow, PQS

CONSTRUCTION ECONOMIST WINTER 2020

The Journal of the Canadian Institute of Quantity Surveyors Le Journal de l’Institut canadien des économistes en construction

Features

For the good of the Institute. . . . . . . . . . . . . . . . . . . . . . . 18 Why is communication between estimators and project managers important?. . . . . . . . . . . 21 Pourquoi la communication entre les estimateurs et les chargés de projet est-elle importante?. . 24 Working from home: transition to the self-employed PQS. . . . . . . . . . . . . . . 26 Contractor payment protection in the modern era. . . . . 28 How a PQS-prepared reserve fund study can protect condominium value and reduce risk of excess cost overruns . . . . . . 30

Past Chair: David Dooks, PQS(F) Education Director: Adam Ding, PQS

Providing services: errors and omissions insurance . . 32

Director: Arif Ghaffur, PQS(F) Director: Hiran Dassoruth, PQS

Project profile: Corner Brook Acute Care Hospital . . 34

Director: Jack Chen, PQS

Federal government takes the long view to address economic slump with stimulus/ CIQS pushes collaboration to speed delivery. . . . . . 36

Director: Jerry Crawford, PQS Director: Roger Ward, PQS(F)

Quantity surveyors and integrated project delivery. . . . . . . . . . . . . . 37

Director: Tammy Stockley, PQS Statements of fact and opinion contained within this journal are those of the authors, including subject matter experts. CIQS assumes no responsibility or liability for the content of such fact and opinion, nor do they represent the official policy of CIQS. Published four times a year on behalf of the Canadian Institute of Quantity Surveyors by

Corners

Messages

Education Corner. . . . . . . . . . . . .

13

Chair’s Message . . . . . . . . . . . . . . .

4

Legal Corner. . . . . . . . . . . . . . . .

15

CEO’s Message. . . . . . . . . . . . . . . .

8

Editor’s Message. . . . . . . . . . . . .

10

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OUR CONCERN FOR THE ENVIRONMENT IS MORE THAN JUST TALK This document is printed on paper certified to the standards of the Forest Stewardship Council® (FSC®).

Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 3

Chair’s Message

Light beyond the wave

T

hese past nine months have been a roller coaster, not just for myself and my family, but also for my coworkers, colleagues, and all of our members. As I write this, it is clear we have entered the second wave of COVID-19 in Canada. Cases are increasing daily, and the number of cases worldwide is disheartening. I reside in the “Atlantic Bubble,” which has its own sense of security, but it may be a matter of time before it starts to wilt.

While it initially seemed the pandemic would be short lived, it is clear now that is not the case. It is even more clear how adaptable and required our members are. Many conversations in development and construction over the last nine months have involved schedule impacts, reduced production, increased material pricing, and increased overall project costs, to name a few. Questions about a COVID-19 contingency and what the allowances should be are top of mind of many of our clients – and many of us are still trying to figure it out.

Each day can be so different. Like when you have a baby and realize you have a great routine and can finally sleep, only to wake up the next morning to a teething, screaming nightmare.

Everything changes!

In reality, most in our profession are quite lucky. When project issues of increased costs and the impact of schedule delays arise, it is PQS and CEC holders who advise on these things: reallocating money in budgets, providing sound advice on proper contingency allotment, and cautionary risk assessment to determine project viability.

Not only do we manage costs, we manage the value of a project. Where do the dollars make the most impact, and how will our client receive the best value for the money they have for a project?

Scopes are likely to change due to a shift in allocation but, in the end, we are still required to help figure it out.

I love the fact I have not missed a beat of work since this pandemic started. It seems things are as busy, if not busier, than ever, and this solidifies the importance of our profession for me.

When speaking with other PQS and CEC holders, I hear the same response, “It has not slowed down; if anything, it has picked up!” I certainly hope this is similar for the majority of you.

Now, with potential vaccines ready in 2021, there is an end in sight. It’s fuzzy, the timelines are uncertain, and we are not sure what life after this will look like, but an end nonetheless. There are still so many things to be worked out, and so many unknowns, but it is a nice feeling to see the light peeking from beyond the wave.

Erin Brownlow, PQS

1. CIQS Community Engagement.

Communication within our membership needs rebuilding. We need to make sure we are aligned in our vision for the future, and ensure that we take all experiences, regions, and opportunities into consideration, including initiatives such as the YQS Program, Student Outreach Program, and Member surveys, and improving ways we connect with existing and potential Members. The Member Engagement Committee and the Chapters Committee are working on these initiatives.

2. Education. The Education Committee has been working diligently to update our syllabus and finalize review of accredited programs in Canada.

In 2021, the focus will be on the Mentorship Program and Updating the TPE Process, ensuring that our

In reality, most in our profession are quite lucky. When project issues of increased costs and the impact of schedule delays arise, it is PQS and CEC holders who advise on these things: reallocating money in budgets, providing sound advice on proper contingency allotment, and cautionary risk assessment to determine project viability.

Strategic Plan The past nine months have highlighted how especially important our Strategic Plan is. There are four main focus areas on which we are currently working, which you will be hearing a lot about in the coming years.

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members receive education and exposure to experiences which may be difficult within their region or current work focus. There is so much work to do here, and it is great to see progress at every Board meeting.

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Chair’s Message

3. Improve Business Systems and Resources. Over the last year, our CEO, Sheila, along with staff have been working to determine where additional resources may be required. As our membership grows, we are reviewing the way our staff operates to ensure our membership is receiving great value, (interesting, as that’s what PQS and CEC holders do for their clients, so it only makes sense!) We want to ensure we are efficient and realistic with expectations, and we are supporting the staff to deliver our programs with pride.

4. Stakeholder Engagement. This focus is the number one priority of the External Relations Committee, which represents communication with potential clients, partner

associations, and handling of government relations. We need to be strategic in our communications with our external stakeholders, and aligned in our message. The training of our ambassadors in various regions will ensure we are able to reach all areas and industries. If there is interest in becoming an ambassador for CIQS, let us know!

All of the Strategic Plan focus areas are intertwined. Work in one area may result in a shift of work in another. It is crucial the Board is able to communicate efficiently, clearly, and remain focused on the discussion at hand. Learn more about our 2019-2022 Strategic Plan on page 18.

In our September Board meetings, the Directors, and observers, participated in an elevator pitch exercise. By the

end of our meetings, there was clearly an increased understanding of what our 2019-2022 Strategic Plan comprises, meaning we are better able to explain it to our membership. It was very interactive and a lot of fun!

Meeting virtually has added challenges to our Board meetings, and it may change the way we work in the future – to what extent we are not sure, but we have proven that even meeting virtually we can continue to be a functional board.

Plus, it has the added bonus of a good chuckle every time you hear, “I think you’re on mute – no, we can’t hear you – you’re on mute!”

Stay Safe and Happy!

Erin Brownlow, Professional Quantity Surveyor Chair: CIQS Board of Directors

ASSOCIATE LEVEL OPPORTUNITY Pelican Woodcliff is looking for a Senior Consultant to take a leading role in our Project Monitoring department. This is an Associate Level position reporting directly to our company principals.

Candidates must have a minimum of ten (10) years of experience in the Canadian project monitoring field and possess an appropriate professional accreditation.

The successful candidate will be offered a compensation package reflective of your professional experience, unique skill sets and a leadership role in our organization.

To pursue this opportunity please forward your resume in strictest confidence to: E-mail: Donny@pelicanwoodcliff.com Donny Afonso, Principal of Pelican Woodcliff

100 York Blvd., Suite 608, Richmond Hill, ON L4B 1J8 Tel 905.889.9996 www.pelicanwoodcliff.com

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Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 5

Message du Président du Conseil

Une lumière au-delà de la vague

C

es neuf derniers mois ont été vécus comme une longue série de montagnes russes, non seulement pour moi et ma famille, mais aussi pour mes collaborateurs, mes collègues et l’ensemble de nos membres. Au moment où je rédige ces notes, il est clair qu’au Canada, nous sommes entrés dans la deuxième vague de COVID-19. Les cas augmentent de jour en jour et le nombre de cas dans le monde est préoccupant. Je réside dans la « bulle atlantique », qui connaît un sentiment de sécurité, mais ce n’est peut-être qu’une question de temps avant que la bulle n’éclate.

S’il semblait au départ que la pandémie serait de courte durée, il est clair maintenant que ce n’est pas le cas. Il est encore plus clair à quel point nos membres sont adaptables et à quel point ils sont essentiels. Depuis ces neuf derniers mois, de nombreuses conversations en développement et en construction traitent des répercussions sur le calendrier, des réductions de la production, des augmentations de prix des matériaux et des augmentations de coûts globaux du projet, pour n’en citer que quelques-uns. Les questions au sujet d’honoraires conditionnels liés à la « COVID-19 » et des indemnités sont au cœur des préoccupations pour beaucoup de nos clients – et beaucoup d’entre nous essaient encore de trouver des solutions.

Chaque jour peut être si différent.

C’est comme avec un bébé, alors que vous établissez une routine et que vous pouvez enfin dormir, vous vous réveillez brusquement avec un cauchemar qui fait ses dents et qui pousse des hurlements. Tout change!

En réalité, la plupart des membres de notre profession ont beaucoup

de chance. Lorsque des imprévus liés au projet surviennent, comme une augmentation des coûts et des problèmes causés par des retards de calendrier, ce sont les économistes en construction agréés (ÉCA) et les estimateurs en construction certifiés (ECC) qui conseillent sur ces points : réaffecter des fonds dans les budgets, fournir des conseils judicieux sur la répartition appropriée des contingences et réaliser une évaluation prudente des risques pour déterminer la viabilité du projet. Non seulement nous gérons les coûts, mais nous gérons aussi la valeur d’un projet. Dans quels domaines les fonds disponibles créeront-ils l’impact le plus important et comment notre client recevra-t-il le meilleur rapport qualité-prix pour un projet?

Les périmètres sont susceptibles de changer en raison d’une modification dans l’allocation, mais, en dernier lieu, nous sommes toujours tenus d’analyser la situation et de proposer les ajustements nécessaires.

J’aime le fait de n’avoir manqué aucune tâche depuis le début de la pandémie. Le rythme de travail me paraît aussi soutenu, voire plus que jamais auparavant, et selon moi, cela renforce l’importance de notre profession. Lorsque je discute avec d’autres ÉCA et ECC, j’entends le même son de cloche : « Les activités ne tournent pas au ralenti, bien au contraire, la cadence a même repris de plus belle! » J’espère sincèrement que c’est la même situation pour la majorité d’entre vous.

Maintenant, avec l’arrivée des vaccins potentiels prêts dès 2021, une fin se profile à l’horizon. La suite est floue, les délais sont incertains et nul ne sait vraiment à quoi ressemblera la vie après la pandémie, mais cela

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reste une fin, néanmoins. Il reste encore tant d’éléments à régler et tant d’inconnues, mais apercevoir une lueur jaillir au-delà de la vague est une sensation agréable.

Plan stratégique Les neuf derniers mois ont montré à quel point notre plan stratégique est particulièrement important. Nous travaillons actuellement sur quatre axes principaux, dont vous entendrez beaucoup parler dans les années à venir.

1. Engagement communautaire de l’ICÉC. La communication au sein de nos membres doit être reconstruite. Nous devons nous assurer que nous sommes en accord avec notre vision de l’avenir et que nous prenons en compte toutes les régions, expériences et perspectives, y compris des initiatives telles que le programme YQS, le programme de sensibilisation des étudiants et les sondages auprès des membres, ainsi que l’amélioration des moyens pour nous connecter avec les membres existants et potentiels. Le Comité d’engagement des membres et le Comité des chapitres travaillent actuellement sur ces initiatives.

2. Éducation. Le comité de l’éducation a travaillé avec diligence pour mettre à jour notre programme et pour achever la révision des programmes agréés au Canada.

En 2021, l’accent sera mis sur le programme de mentorat et sur la mise à jour du processus lié au test d’expérience professionnelle (TPE), en veillant à ce que nos membres reçoivent une formation et soient exposés à des expériences To return to Table of Contents CLICK HERE

Message du Président du Conseil

qui peuvent être difficilement accessibles dans leur région ou dans leur domaine de travail actuel.

Même s’il reste beaucoup de travail à abattre, c’est gratifiant de voir les progrès lors de chaque réunion du conseil.

3. Amélioration des systèmes et des ressources de l’organisation.

Au cours de la dernière année, notre directrice exécutive, Sheila, ainsi que le personnel ont travaillé pour déterminer les domaines où des ressources supplémentaires pourraient être nécessaires. À mesure que le nombre de nos membres augmente, nous examinons le fonctionnement de notre personnel pour nous assurer que nos membres reçoivent une grande valeur associée à leur adhésion (fait intéressant, car c’est précisément ce que font les ÉCA et les ECC pour leurs clients, donc cela est logique).

Nous voulons nous assurer que nous sommes efficaces et réalistes par rapport aux attentes, et que nous aidons le personnel à exécuter nos programmes avec fierté.

4. Mobilisation des intervenants. Pour le Comité des relations extérieures, la mobilisation des intervenants constitue la priorité absolue, car elle représente la communication avec les clients potentiels, les associations partenaires et la gestion des relations gouvernementales.

Nous devons être stratégiques dans nos communications avec nos intervenants externes et être en accord avec notre message. La formation de nos ambassadeurs dans diverses régions nous permettra d’être en mesure d’atteindre l’ensemble des secteurs et des industries. Si vous souhaitez devenir ambassadeur de l’ICÉC, faites-le nous savoir!

Tous les axes prioritaires du Plan stratégique sont étroitement liés. Le travail dans un domaine peut donner CLICK HERE to return to Table of Contents

lieu à un changement de travail dans un autre. Il est essentiel que le conseil maintienne des communications efficaces et claires, et qu’il reste concentré sur la discussion en cours.

Pour en savoir plus sur notre Plan stratégique 2019-2022, consultez la page 18.

Lors de nos réunions du conseil d’administration de septembre, les administrateurs et les observateurs ont participé à un exercice de type argumentaire éclair. À la fin de nos réunions, nous sommes parvenus à une meilleure compréhension de notre Plan stratégique 2019-2022 et de son contenu, ce qui signifie que nous sommes mieux en mesure de l’expliquer à nos membres. L’exercice s’est avéré très interactif et très amusant!

Les réunions virtuelles ont ajouté des défis à nos réunions du Conseil, et cela pourrait changer notre façon de travailler à l’avenir – même s’il est encore trop tôt pour en déterminer la portée, toutefois, nous avons prouvé que même dans le cadre de réunions virtuelles, nous pouvons être un conseil fonctionnel.

De plus, cela donnait lieu parfois à des situations cocasses « Je pense que vous êtes en mode muet / non, je ne vous entends plus / le mode muet est activé! » Restons en sécurité et heureux!

Erin Brownlow, économiste en construction agréée Présidente : Conseil d’administration de l’ICÉC

Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 7

Chief Executive Officer’s Message

Adapting to the times

O

ver the last seven months, I have often mentioned how proud I am of how quickly and seamlessly the CIQS staff adapted to working remotely when the safety requirements called for it at the beginning of the pandemic. At that time, few of us were probably expecting to still be dealing with COVID-19 safety measures today. It does, however, seem to be our new normal for the foreseeable future.

Webinars When it became apparent that the restrictions on travel and inperson meetings would not be relaxed in the near future, my staff rallied together to bring educational webinars to our members to ensure we continued offering opportunities to earn annual CPD points. They studied the various webinar platforms to learn the pros and cons for each to make sure that we offer the best member experience possible.

With only a few months’ worth of preparation, we produced our first-ever member webinar on June 4, 2020 and have been able to offer at least two webinars per month since, on either a national or chapter-specific level. Offering these webinars makes it possible for our members from coast to coast to participate, no matter where the presenter is located. I miss seeing our members and supporters in person and look forward to the day we can once again gather face-to-face, but the convenience and benefit of webinars to our members is not lost on me, so we aim to continue hosting at minimum two webinars per month beyond when in-person events are allowed. We are therefore always looking for topics or speaker ideas. Anyone interested in becoming a webinar presenter, or who has an innovative and educational topic suggestion, is welcome to contact us at admin@ciqs.org.

YQS Leadership Webinar Series The CIQS is proud to announce a four-episode webinar series that will guide participants through the fundamentals of leadership.

This series is focused on our members under 40 (YQS) but is open to all members and stakeholders. Craig Woodall from Byng Leadership Inc. will be leading each of the four webinars.

• The webinars deal with the following four leadership issues: • Discovering the fundamentals of leadership.

• Understanding how to lead yourself properly.

• Learning to build, lead and influence teams.

• Hearing exceptional leaders share their top leadership and career tips.

Each webinar is worth 2 CPD points.

Earn 8 CPD points for the entire series.

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Sheila Lennon, CAE

Myers Briggs Personality Assessment: Part Two Thursday, January 14, 2021, 12:00 pm-1:30 pm (EDT) What Makes Us Unique? What Makes Up Our Personality and How It Influences Our Relationships?

Speaker: Greg Brokenshire, President, Alberici Contractors Ltd. Registration to all four parts is free for all CIQS members in good standing under the age of 40. Registration to all other members and non-members is available for a small fee. When you register for the entire series, you will receive a copy of part one: Why we do what we do; Understanding Our Ego, Bias, Fears and Drivers; Recognizing the Importance of ‘Human Systems. See www.eventbrite.ca/e/yqs-webinar-series-tickets-119348557749 for event and registration details.

Member Engagement I am pleased to announce that we have made great strides in increasing and improving our member engagement opportunities, on both chapter and National levels, which falls in line with one of the four pillars of our 2019-2022 Strategic Plan (read more on our strategic plan on page 18). These achievements have been realised despite (or perhaps thanks to) the pandemic and are stepping-stones to greater things to come.

Virtual meetings I am going to venture a guess and say that the majority of our readers remember when personal computers were just being introduced and we all waited patiently as our dial-up internet was connecting (fingers crossed no one else picked up the phone at the same time!) so that we could hear those three little words: you’ve got mail. I look back at those days and cannot believe how far technology has come in just a few decades. Today we can read our email on a watch, companies are able to manage highly productive teams that are scattered across the province, country or even the globe, and anyone with a computer and an internet connection can visibly connect with friends, family, and business contacts from anywhere, thanks to virtual meeting apps.

In the last seven months, the CIQS has moved board and committee meetings from conference calls to video conferences and our government relations team even held meetings with MPs, senior policy advisors, and parliamentary secretaries over Zoom, to discuss the importance and benefit of bringing PQS and CEC professionals onboard for construction projects, as well as to promote CIQS pre-budget submission requests.

To return to Table of Contents CLICK HERE

Chief Executive Officer’s Message

Similarly, we are currently working on an initiative that will allow our YQS Program participants the opportunity to congregate for virtual meet-ups where they can discuss issues and ideas with their peers from across the country. Every YQS Coffee Talk session will focus on a specific set of questions, which will be posted to the attendees and moderated by the CIQS or a YQS member.

Attendees will break off into smaller Zoom breakout ‘rooms’ to discuss the topics of the day. Each discussion group will nominate one spokesperson, who will then report the group’s findings to all meeting attendees once the groups reconvene in the main meeting room. We are very excited to launch the inaugural Coffee Talk session this winter and hope that all CIQS members under the age of 40 will join the conversation. Watch your emails for details.

Chapter communications Another way in which we are increasing member engagement is through the creation of digital newsletters for each of our six chapters across Canada. They will be produced and edited by National staff with assistance from local chapter representatives, published four times per year (fall, winter, spring and summer).

They will contain updates from National along with news, volunteer appreciation profiles, new members, and events from the regional perspective. The first edition of these new newsletters was distributed via email in late October. If you did not receive your copy, please contact the chapter newsletter editor at marketing@ciqs.org.

We recently established a chapter committee on the board level whose members will act as liaisons between our six chapters and the National board. This committee was created to open a dedicated line of communication to allow chapter executives from across the country to share best practices, networking event ideas, member recruiting dos-and-don’ts, and

any other experiences or questions, with the goal of helping all of our chapters to flourish. More information on this committee will be shared with our chapter executives in the near future.

Until next time – stay safe and healthy!

Sheila Lennon, CAE CEO, CIQS

Did you know?

Canada’s minerals industry

Prepared by Yasmin Abdiladif, Dip. C.E.T. Assistant to Editor, Construction Economist Canada is a leading global producer of minerals, with production occurring in every province and territory. Here are some ways mineral production is advancing Canada’s economy and its residents: • Jobs in sector: In 2019, the minerals sector accounted for 719,000 jobs (directly and indirectly) across the country.

• Domestic exports: In 2019, mineral exports produced 19% of Canada’s total domestic exports, valued at $106 billion.

• Indigenous representation: In 2016, Indigenous people made up 12% of the mining industry’s labour force, among the highest Indigenous representation by industry.

Courtesy of Natural Resources Canada (www.nrcan.gc.ca).

Congratulations Corner

Congratulations to the following CIQS members who have qualified as a PQS or CEC (including reinstatements).

CIQS – British Columbia Ahmed Abdelghany, PQS John Buckley, CEC Makbule Deniz Caglar, CEC Jiji S. Kumar, PQS Rongmei Shi, CEC Ajibola Opeyemi Soboyejo, PQS

CIQS – Members at Large Srinivasan Chandrasekar, PQS Sanjay Chawla, PQS Christian Hong, PQS Adesoye Idowu, CEC Law Tak Wai Kenneth, PQS

CIQS – Ontario Shu Ge, PQS Nima Parsa, PQS Hitesh Rana, CEC Rohan Vassell, PQS Adele Wojtowicz, PQS

CIQS – Prairies and NWT Michael Jenkins, PQS Kevin Moran, PQS Gopakumar Raghavan Nair, PQS CIQS – Québec Max Mahi, CEC

CIQS – Newfoundland and Labrador Jeff Beaton, CEC Michael Freeman, CEC

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Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 9

Editor’s Message

Construction labour costs: The emerging norm of increased costs

L

abour costs often form a significant part of any estimate prepared by a contractor and are built into a bid/tender, thereby forming the baseline to measure actual project performance of effort and cost. The typical objective of the estimate is to arrive at the contractor’s realistic cost prediction of the effort required in terms of labour hours to plan, progress, and complete the work. This estimate then aggregates into the contract price after adjustments for risks, overhead, and profit are considered. As a result, labour costs form a core part of a construction contract that defines the scope, schedule, commercial terms, and formulates the legal agreement between the parties.

In addition, labour costs can, by nature, be either directly related to physical construction activities as typically carried out by trades or those that support the effort of construction, and can include site in-directs, such as management and supervision. The sheer significance of labour costs as part of the overall project cost means that any error, inaccuracy, or changes to the baseline estimate of effort exponentially affects the project costs in terms of the overall financial outcome. As one estimator said to me recently, “Labour cost tracking on existing projects and estimating for new projects requires extra vigilance in some instances, and is impacting the financial viability of projects”.

The introduction of safety practices in response to COVID-19 at jobsites has directly impacted labour productivity and

means that there are additional costs being incurred. A report from New Horizons Foundation, the research arm of the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) – which is an international trade association representing member firms with chapters throughout the US, Canada, Australia, and Brazil – found that its members have taken an approximate 18% hit to productivity for the average project since the pandemic began. It also found that over the course of an eight-hour day, the average worker lost 85 minutes dealing with circumstances related to COVID-19. Henceforth, “The magnitude of this issue represents a very real threat to a contractor’s ability to remain in business if left unmitigated,” the study’s authors concluded.

In Canada, the Canadian Construction Association’s (CCA) COVID-19 - Standardized Protocols for All Canadian Construction Sites, Version 4 outlines the best practices for construction sites to maintain the health and safety of all workers. The protocols include prevention, detection, and response measures.

The objectives of the Standardized Protocols are to: (i) Prioritize the health and safety of workers and surrounding communities. (ii) Apply recommendations and best practices from health authorities to construction site procedures.

… error, inaccuracy, or changes to the baseline estimate of effort exponentially impacts the project costs.

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Arif Ghaffur, PQS(F)

(iii) Establish and maintain a common Pandemic Response Plan across construction sites. (iv) Foster open communication amongst stakeholders. (v) Ensure a respectful work environment.

These protocols identify prevention measures, including: communication and awareness; business-related travel; working remotely; access and movement to/from construction sites; monitoring the status of workers; construction site and site trailer cleaning protocols; limiting and removing internal touch point areas; compartmentalization; site operation; deliveries; work in occupied spaces; protocol auditing; and detection measures.

Such measures require additional time in record keeping and monitoring; time spent on additional cleaning/disinfection; planning and logistics of scheduling the separation of workers/crews (physical distancing); unproductive time spent on avoidance of other workers/crews (restrictions on physical distance, and maximum occupancy). Although the measures are important to ensure the health and safety of workers, they also directly impact labour productivity and lead to often-unforeseen additional labour costs.

Therefore, project costs will increase due to additional health and safety measures; site security and maintenance; general conditions; additional insurance and bonding; demobilization costs for the prime contractor, subcontractors, suppliers and manufacturers; and costs incurred to maintain reasonable delivery dates for project materials and equipment, including cost premiums for alternatively sourced material due to supply chain interruptions. There will also be additional costs to account for lost and reduced productivity due to additional time being devoted to cleaning and protective To return to Table of Contents CLICK HERE

Editor’s Message

… the measures are important to ensure the health and safety of workers, they also directly impact labour productivity and lead to often-unforeseen additional labour costs. activities; compliance activities and briefings; physical distancing and related measures; extended project and site rentals; projectrelated overhead costs; and reasonable remobilization costs.

Disruption to the sequence of planned activities has been and remains a discussion point in terms of reasons and responsibility.

For example, the standard Canadian Construction Documents Committee (CCDC) Stipulated Price Contract and corresponding CCA Stipulated Price Subcontract have come under scrutiny. While the CCDC debate regarding application of “excusable but not compensable” or “excusable and compensable” will continue in terms of contractual entitlement, there is no doubt that contractors had to implement and adapt to new health and safety policies and practices on their work sites and bear the adverse impacts on productivity.

… those that make payments sometimes demonstrate an insatiable appetite for detail to provide proof of additional labour costs.

This is nothing new, as general/trade contractors have always sparred over what should have been allowed in estimates, what changed to cause an increase in effort (labour hours), and who should pay CLICK HERE to return to Table of Contents

for labour cost increases, or some variation thereof. This pre-existing condition and its disruption to the ongoing construction supply chain have been exacerbated by the pandemic. Simply put, things have changed – and pre-pandemic pricing has been severely impacted. The reality is that labour losses do not instantly show up on financial reports and these can take sometimes many months to become evident; the extent of losses remains unknown until they become catastrophic.

More so than ever, labour losses are a latent threat to the viability of contractors.

There has been much written on how to record, track and submit requests for additional compensation arising from additional labour costs resulting from production not being achieved as planned, or simply additional costs or effort that could not have been reasonably foreseen.

I have heard of some instances where those that make payments sometimes demonstrate an insatiable appetite for detail to provide proof of additional labour costs. Rather than maintaining some level of pragmatism, we are sometimes entering the realm of proof of detail supported by reasonable doubt. This is no doubt a difficult balance as there needs to be sufficient proof of entitlement and additional labour costs.

Where possible, parties should seek to enter mutually agreeable and sustainable settlements with respect to project schedule and cost overruns resulting from the new health and safety measures.

As for new projects currently out for tender or in relation to future projects, contractors will have to be mindful of these circumstances when preparing their bids/tenders: namely, the costs and loss of productivity associated with the new health and safety measures known at the

Did you know?

People on the move

The Canada Infrastructure Bank has appointed Ehren Cory as the new Chief Executive Officer.

Mr. Cory was previously President and CEO of Infrastructure Ontario, a position he held since early 2017.

Canada Infrastructure Bank (www.cib-bic.ca) has stated its three main priorities being: • Implementing the $10B Growth plan to deliver new projects.

• Accelerating investment in the Canada Infrastructure market by attracting more private capital.

• Building a results-focused organization that further positions Canada as a global infrastructure leader.

time of the contract or that can reasonably be foreseen. The emerging norm is the increase in construction labour costs.

This is something that all construction stakeholders need to recognize and deal with such that Canada maintains a strong and vibrant supply chain.

Thank you for your support and contributions to Construction Economist.

I wish you and your families a truly wonderful and safe holiday season, and all the best for 2021. If you have feedback, suggestions and, of course, any articles that you would like to be considered for publication, please email editor@ciqs.org or ceo@ciqs.org.

Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 11

Editor’s Message

Letter to Editor To learn or to teach – the benefits of expanding one’s knowledge Dear Editor, Continuing Professional Development or CPD for short. If you are a PQS or CEC, a minimum of 50 points annually is required. Past articles from our fellow colleagues have described how easily 50 points can be obtained so I will skip the details. What`s of interest in this letter are the benefits of continuing professional development.

By design, our minds are in a constant exploration for something new. As of late, the majority of us conduct our explorations online via Google searches, YouTube videos, or documentaries on Netflix or Amazon Prime. Such searching should not stop once an objective has been attained but rather expanded into one of the following two possibilities: continue learning or share such knowledge.

When you learn something new, you benefit not only yourself by expanding your knowledge and realms of understanding, but equally those around you as they equally benefit from you. At an event in which I participated last year relating to upcoming changes to the Construction Lien Act (now the Construction Act), I took the initiative to network and socialize. During such, I met a young undergraduate from the UK. He was in Ontario to learn and write about an upcoming study on which he was working with respect to the relationships between the Construction Act and that of the UK. During our discussions, I profited from his plethora of knowledge of

Letter to Editor The benefits of volunteering for the CIQS Dear Editor, I would like to share my view and some thought-provoking ideas on volunteering for the CIQS. As an active participant, I find volunteering for the CIQS is a complete and fulfilling experience.

I have been volunteering for various committees since 2016.

I immigrated in 2008 and a new chapter unfolded in advancing my professional knowledge, experience, and skills. New academic and professional expectations, new culture, and new lifestyle were everyday challenges to me. The gap between myself and the professional community was deep, and I always felt something was missing. In 2016, I found that missing piece.

I first started volunteering for mini-events in CIQS-BC. Later, I joined the CIQS-BC board and became President of the CIQS-BC affiliate in 2017. Soon after, I became an active member of the CIQS National Board representing BC. Currently, I enjoy serving in the CIQS Education committee, where we organize, implement, and facilitate educational policies for the Institute.

I recall this phase of my career as the most enriching in elevating

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Patrick Cantin, PQS(F), ECA(F)

the UK lien rights in construction, while he equally profited from the vast knowledge of the various speakers that night. I think we both benefitted, as did all with whom this young man shared encountered experiences benefited from the exchange of knowledge. Participation at that single event earned all CIQS members who attended more than just the two CPD points per hour of formal learning. That knowledge I gained pre, during, and post-seminar has been shared countless times by me through various discussions ever since.

The CPD portion of the members’ portal contains everything you need to know with respect to CPD opportunities, articles, programs etc. Now, more than ever, the Institute has made it easier to obtain and document your annual CPD credits. The CIQS offers monthly seminars, all online and from coast to coast. In addition, by equally networking with your peers via such platforms as LinkedIn, industry professionals are constantly sharing articles and opinions, not for themselves, but for the reader. Such reading earns you one CPD point per hour of informal self-directed study.

The average person is awake for 5,840 hours per year (my own calculations). 50 hours of that is only less than 1% of such time.

We should all expand our minds by learning and sharing. I can assure that the benefits are exponential.

Sincerely, Patrick Cantin, PQS(F), ECA(F)

Indu Elapatha, PQS(F), MRICS my learning and leadership skills. These skills aren’t just the key to success in the Institute; they are also the key to success in my career.

I engaged in working on reciprocity agreements between the CIQS and various countries, accreditation review of various educational institutions across Canada, and research of Ebooks etc. Serving on the CIQS board of directors helped in building my network. I am proud to be in an esteemed group of the CIQS board who continue to guide the Institute with a depth of comprehension and long-term service.

Working with like-minded people, but with a different perspective, who spark ideas to create great things makes a huge difference.

I encourage other members to take advantage of this life-changing experience. I am sure, with the help of the CIQS, you will be equipped with the tools and skills to succeed. You will realize your hard work and dedication eventually paid off. If you would like to be a valuable volunteer, please sign up today. For further information on available volunteer opportunities, contact admin@ciqs.org.

You will find that it both interesting and rewarding.

Indu Elapatha, PQS(F), MRICS

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Education Corner

Adam Ding, PQS

2021: Our comeback year

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ailing from Winnipeg, the geographic center of the Nation, I consider it a great privilege having the opportunity of serving the Institute as the newly elected Education Director.

Still remembering the day in 2005 when I first joined the CIQS, I witnessed how technology has evolved and changed the face of our industry in less than two decades. Long gone are the days when we tried hard to convince employers that Excel spreadsheets and onscreen measurement are as reliable as calculators and scale rulers (it just depends on who is using them). Today a new generation of quantity surveyors is entering the industry, fully trained in cloud-based project management systems, building information modeling, and sustainable green building knowledge, just name a few. Of course, the fundamentals of our industry remain the same: people build structures. It is just that we are doing things in new ways, including using our smartphones and tablets for virtual design and construction (VDC), especially in the midst of the current global pandemic.

Despite an unusually challenging year, we are seeing consistent enthusiasm in our growth of membership and increase of exam registrations. In addition to our continuous efforts on student outreach, syllabus review, and certification processes etc., the following list includes just a few new topics on which our education committee is working: • Extending our accreditation alliance with educational institutions to possibly include part-time and distance university/college programs.

• Renewing and expanding our reciprocity agreements with other professional organizations, including those in other countries.

• Expanding our educational offerings to include a brand new heavy/civil syllabus to meet the needs from the horizontal side of construction industry.

• Creating possible elective courses on subjects such as computerized estimating, risk management, sustainable development, building/site condition assessment and valuation, building information modeling etc.

• Updating existing syllabus subjects, such as cost planning and development economics, with new textbooks and assessment tools.

5-Year New Membership Application Monthly Comparison (Up to October 31, 2020)

10-Year CIQS Exam Registration Comparison (Up to October 31, 2020).

If you have any good ideas or suggestions, please feel free to drop a message via education@ciqs.org. The world needs more Canada, Canada needs more construction, and construction needs more people like you! In the year 2021, our comeback will be stronger than the setback.

The Construction Economist is also available in electronic format. Please visit the CIQS website www.ciqs.org and press the “Publications” tab.

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Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 13

Our concern for the environment is more than just talk This publication is printed on Forest Stewardship Council® (FSC®) certified paper with vegetable oil-based inks. Please do your part for the environment by reusing and recycling.

Legal Corner

Richard Wong

Jagriti Singh

I

n response to the economic impacts of the COVID-19 pandemic, Canada’s strategic focus to date, at the federal, provincial and territorial levels, has been to encourage private and public sector investment and development of shovel-worthy and shovel-ready infrastructure projects. This Legal Corner summarizes several of the key stimulus programs in our largest provinces that quantity surveyors and other construction professionals should actively monitor for opportunities.

Federal The federal government’s Investing in Canada Infrastructure Program, which was in effect prior to COVID-19, provides over $33 billion in funding to provinces and territories through bilateral agreements with Infrastructure Canada for four targeted streams: public transit; green infrastructure; community, culture, and recreation infrastructure; and rural and northern communities infrastructure. To accelerate the pace of infrastructure upgrades to counter the effects of the pandemic, a temporary

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Infrastructure stimulus programs aid Canada’s economic recovery COVID-19 Resilience Stream and the COVID-19 Flexibilities Transfer Program were established.

The COVID-19 Resilience Stream provides over $3 billion in funding for projects with eligible costs under $10 million. Construction for these projects, which include health infrastructure, schools and active transportation infrastructure, must start before September 30, 2021 and be completed by the end of 2021 (or by the end of 2022 for territories and remote communities). The COVID-19 Flexibilities Program allows provinces and territories to transfer remaining funding from existing streams to fund projects under the COVID-19 Resilience Stream and broadens the types of eligible infrastructure under those streams for a limited time, to include, for example, energy efficiency and reliability projects and mobile and cellular projects in northern communities.

Under the Economic Response Plan, Western Canada will receive $1.7 billion to clean orphan and inactive wells. Funding is allocated based on

the number of wells in each province, with $1 billion to Alberta, $400 million to Saskatchewan and $120 million to British Columbia.

Finally, with an increasing number of high-profile mandates across Canada, including clean power, green infrastructure, broadband and transportation, the Canada Infrastructure Bank (CIB) has a $10 billion growth mandate. CIB’s capacity to assist ranges from providing transaction advisory services to investing in equity, debt, or other instruments. Its project portfolio includes a number of eye-catching projects including the Alberta Irrigation Project (AB), GO Expansion – ON Corridor Project (ON), and the Taltson Hydroelectricity Expansion Project (NWT).

British Columbia In September 2020, the British Columbia government also implemented BC’s Economic Recovery Plan, Stronger BC for Everyone, in which they committed to spending $1.5 billion on economic recovery to

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Legal Corner

respond to immediate needs in the province. The plan includes investing more than $400 million in community infrastructure. Also, both the federal and provincial governments have made additional commitments to the British Columbia Infrastructure Program with extra funding of $100.6 million towards community, culture and recreation

infrastructure, $58.7 million towards rural and northern communities infrastructure, and $47 million towards green infrastructure. Moreover, the province will also contribute an additional $90 million to the Connecting British Columbia program that targets communications and connectivity infrastructure.

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Alberta In June 2020, Alberta’s Recovery Plan was launched, which includes spending more than $10 billion on core infrastructure projects that will immediately create thousands of jobs in the province. It includes $6.9 billion for capital projects, $600 million for large scale infrastructure projects, $150 million for water infrastructure, $500 million in further funding for municipalities, and $1.5 billion for the Keystone XL pipeline. Additionally, to prioritize long-term infrastructure investments, the government proposed the introduction of the Alberta Infrastructure Act and the development of a new 20-Year Strategic Capital Plan.

Québec In March 2020, as a part of the 10-year Québec Infrastructure Plan (20202030), the government announced $11 billion in funding for infrastructure projects, including schools, roads and public transportation. Further, in May 2020, the government announced additional spending of $3 billion in infrastructure projects to boost the economy after COVID-19.

In September 2020, Québec tabled Bill 66, An Act respecting the acceleration of certain infrastructure projects, which seeks the acceleration of major infrastructure projects in Québec to help the economy benefit more quickly from the resulting infrastructure and to mitigate the effects of the COVID-19 pandemic.

Bill 66 designates 181 large-scale infrastructure projects in Québec, which include the construction of major roads and bridges, hospitals, schools, and public transit systems. The Bill allows such projects to benefit from acceleration measures in relation to expropriation, environment, land use planning, and public contracts.

In October 2020, Québec announced that CDPQ Infra, was mandated to carry out a study on the optimal solution for the implementation of mass transit on the south shore of Montréal.

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Legal Corner

Ontario In July 2020, Ontario passed a trilogy of stimulus-related measures: (i) the COVID-19 Economic Recovery Act, 2020, an omnibus statute that accelerates economic recovery by using infrastructure as a key drive by enacting a new TransitOriented Communities Act, 2020, and amending key legislation such as the Environmental Assessment Act, the Planning Act, the Occupational Health and Safety Act, and the Building Code Act; (ii) the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020, which gives continuity to the emergency orders issued during COVID-19, and provides rules for businesses to open safely; and (iii) the Building Transit Faster Act, 2020, to expedite the delivery of four priority transit projects in Toronto.

In August 2020, Ontario announced that for 2021-22, the government will be providing $30 million to support the Connecting Links Program to build, repair or replace local roads and bridges. Further, the Safe Restart Agreement with the Federal government will be providing up to $4 billion in phased assistance to Ontario’s municipalities to protect the health and well-being of communities, while delivering critical public services, such as public transit and shelters.

Andrew Heal J.D., LL.M. Partner Certified Specialist Construction Law

Catherine DiMarco LL.B. Partner Certified Specialist Construction Law

Damon Stoddard LL.B., LL.M. Partner

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In October 2020, the government also introduced the Ontario Rebuilding and Recovery Act, 2020, which is a bill at the time of writing and subject to change, with the intent to move highway, priority transit, and related community projects forward including delegation of certain powers to public bodies such as Metrolinx, and a new mechanism to enforce compliance by utility companies with their obligations under the Public Service Works on Highways Act.

Conclusion Across Canada, the construction industry is expected to be a critical contributor in the economic recovery from the pandemic by creating jobs, contributing to the climate agenda and enhancing long-term resilience. As a result, other provinces and territories have also detailed capital and infrastructure plans, funding announcements, and partnerships under the Federal funding programs, and further announcements are expected well into 2021.

About the authors Richard Wong is a Partner and Chair of the Chambers Band 1-rated Construction and1 Infrastructure Group at Osler, Hoskin & Harcourt LLP. Jagriti Singh is an Associate at Osler, Hoskin & Harcourt LLP, whose practice focuses primarily on construction, energy, and infrastructure projects.

Find us online www.ciqs.org

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Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 17

Strategic Plan: A document outlining where an organization is going over the next few years (by outlining the priorities, resources and objectives) and how to get there (through a detailed action plan on how to achieve set goals).

It is a plan meant to produce fundamental decisions and actions that are meant to guide the organization’s directive, mission, and vision.

For the good of the Institute

T

he National Board of Directors met for two days in May 2019 for a collaborative brainstorming and idea-sharing session to outline the goals and objectives as well as the actions required to meet the goals, and the processes to measure the plan’s success.

As mentioned in the Chair’s Message, the final plan includes four main pillars designed to create brand awareness,

grow the community, elevate academic standards, and build interdisciplinary partnerships to optimize value and become the go-to provider for the quantity surveyor profession.

This will be accomplished in part by implementing initiatives to grow the membership and to engage the next generation of quantity surveyors. These initiatives include the development of a student outreach plan and a national marketing and communications plan,

My name is Sophia Chin You. I am the Membership Manager at the Canadian Institute of Quantity Surveyors. The CIQS sets the highest standards for construction economics in Canada and owns the Professional Quantity Surveyor (PQS) and Construction Estimator Certified (CEC) designations, offered to qualified individuals in Canada and abroad.

Last year, we embarked on a three-year plan to promote the professional status and value of our members and stakeholders within the industry by: • Increasing the connection and relationship among our board, chapters and stakeholders.

• Reviewing and updating our educational requirements and standards to stay relevant.

• Addressing our staff and technology deficiencies.

• Engaging our stakeholders.

Feel free to contact me at membership@ciqs.org if you would like to learn more about CIQS membership and its benefits.

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both used as vessels to reach not only our current members but also industry and the public at large.

The 2019-2022 Strategic Plan was launched at Congress 2019 in Quebec City. One year in, we are well on our way to promoting the professional status and gainful employment of Institute members by maintaining high standards of competence and ethics, furthering their education, and encouraging the interchange of knowledge and fellowship with other industry professionals.

Some of our current achievements under the current strategic plan include: Student outreach and YQS programs The student outreach program will focus on promoting the career paths available within the quantity surveying field and how becoming a quantity surveyor can open doors across Canada and beyond our borders. CIQS ambassadors will make presentations at job fairs, career days, seminars, and during individual class discussions at colleges across the country. Volunteers wishing to participate in this program must first complete the CIQS ambassador media training, launched in February of 2020.

The initial training session was held in Calgary, but the pandemic caused To return to Table of Contents CLICK HERE

all other scheduled sessions to be postponed. They commenced again virtually in November 2020.

The Young Quantity Surveyor (YQS) Committee has built momentum over the last year with the creation and implementation of an action plan to provide networking opportunities for CIQS members under the age of 40 who are dedicated to bettering the field of quantity surveying while becoming leaders in their respective communities. This will be achieved through a variety of programs and events designed to offer leadership tools and to open doors for program participants in order to increase their contact network. One such initiative is a four-part leadership webinar series led by Craig Woodall from Byng Leadership Inc., launched in October 2020, with part 2 scheduled for January 14, 2021. Another project is a virtual meet-up series where YQS program participants will have the opportunity to discuss issues and ideas with their peers from across the country. The initial YQS Coffee Talk is projected to be launched in Winter 2020.

Information on both of these programs are available on a dedicated website – THE CIQS HUB – which has been designed as a platform to help tomorrow’s generation of quantity surveyors grow, learn, and network.

Visit www.qscareer.org to learn more.

Government relations Last year we completed an environment scan, surveying government officials about CIQS to ascertain a better understanding of their level of knowledge of the quantity surveying profession. This information was used to create a government relations plan to build relationships with government officials willing to champion our cause and help us build brand awareness and influence within government circles. We started working with a government relations firm in Ottawa in the spring of 2020 and, to date, we have submitted recommendations for the 2021 Pre-Budget consultation process in response to an invitation CLICK HERE to return to Table of Contents

The four pillars The CIQS Community Engagement Initiative has a mandate to better engage our members across the country. The Institute will focus on reconnecting and rebuilding the relationships among the board, chapters, and individual members.

The education committee will work to identify and improve upon the weaknesses and strengths of the current courses and syllabi for the architectural, mechanical, and electrical programs.

With the National office now managing operations and administration of the Institute and the individual chapters, it is imperative that all appropriate IT and human resources are in place. Therefore, one of the pillars is to identify and resolve any resource deficiencies within the organization.

The Stakeholder engagement initiative focuses on communications to educate the public, industry and government about our industry and the benefits of working with a CEC or PQS. Timeline details for each of the pillars are available on www.ciqs.org in the ‘Members Only’ section, under ‘Institute’.

by the House of Commons Standing Committee on Finance. We also held virtual meetings with government officials and representatives from Infrastructure Canada and the Standing Committee on Transport, Infrastructure and Communities at the end of October 2020.

We are continuously nurturing relationships with our external stakeholders, building our brand, and increasing our overall exposure and value. We have continued our membership with FIRPAC (Federal/ Industry Real Property Advisory Council) and are active participants at their meetings in Ottawa. We are also building our relationships within the international community through our membership at CEEC and participation

in PAQS meetings and conferences. We also recently contributed to a recent request for information from Public Services and Procurement Canada.

Looking forward at what’s to come, there are several exciting projects in the works for next year. We are finalizing a national marketing and communications plan, scheduled to be launched in January 2021, which will focus on increasing awareness of the quantity surveying profession and the CIQS brand. We are also gearing up to launch our leadership development and mentorship programs; increase our IT efficiency at head office, and overhaul our education and membership programs to ensure that we continue offering stellar programs to our members and stakeholders.

About the author Alexandra Parliament is a Marketing and Communications Consultant with over 20 years of experience. She has a formal education in print journalism and has worked in the marketing and communications departments of a PR Agency, a major Marketing Agency, a national magazine, an annual three-day festival, provincial and national non-profit organizations and one of the largest loyalty programs in Canada. She has been published in a variety of magazines and online publications and is currently a steady contributing writer for Mechanical Business Magazine. She has been working with CIQS National in a PR/Marketing capacity since November 2018.

Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 19

Why is communication between estimators and project managers important?

Projects that start with low estimates are doomed to fail

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ommunication between the estimator and the company’s project manager is essential during the various stages of the project cycle, especially when dealing with projects that have features that go beyond the company’s usual area.

Communication related to the choice of projects to be tendered In many cases, the estimation team makes the mistake of boasting about the number of estimates submitted and won during the year, without taking into consideration the end results.

When it comes to selecting the projects to be tendered, the project manager is the key stakeholder. Therefore, it would be better for the team to only commit to the process of estimating a project if its administration shows interest. It would be better for their efforts to be focused on selected projects.

Communication during the cost estimate process It is essential for the project manager to contribute to the estimation in order to

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avoid overstated costs leading to the loss of the project, or understated costs that would cause the company to make a loss on the project.

Here are a few key points for discussion: a) Reading reports, specifications The estimator and project manager should read all the tender documents so they can exchange views.

Examples of cases with a significant impact on prices to be discussed: • The geotechnical report The nature of the soil to be excavated: what is the soil class? Is it rippable rock that could be excavated with a shovel? Or is it solid rock that requires a rock breaker or blasting?

Is this a type 2 excavation requiring support? What type of support will be required? Sheet piling? Or will a cheaper system suffice?

Is there a way to avoid support costs by looking into excavation slopes?

• The environmental report Is the project located in an area where noise must be controlled? Does the

estimator need to factor into the costs that certain activities need to be carried out in off-disposition periods?

What is the project manager’s plan for noise abatement (demolition/ concrete work/compressor/etc.), or for removing construction dust?

Does the environmental report identify specimens to be kept at their place – what are the linked costs?

Does the report mention the presence of asbestos? Is the soil contaminated?

• Mechanical and electrical plans The project manager will be the best person to elaborate on mechanical and electrical costs such as: indicating duct routings and sizes; advising whether these systems will require additional structural or sealing work; suggesting methods of handling heavy equipment, etc.

• Offering alternatives An experienced project manager will be able to offer alternatives that could lower the overall cost of the project, without affecting quality. These alternatives could help the offer stand out, by giving it added value.

Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 21

b) Preliminary schedule The estimator and the project manager should combine their efforts and experience to establish an achievable preliminary project schedule. On their own, even an experienced estimator could underestimate or overestimate the length of the project.

This preliminary schedule will allow: • Overhead costs of the project to be calculated.

• The costs related to winter conditions, if applicable.

• The length of the tasks is to be determined, and therefore an estimation of the manpower and equipment required.

• Periodic financial plan for the project to be established and lines of credit to be discussed with financial institutions, etc.

• Labour and equipment histograms to be created, which will allow for more accurate costing.

• The S curve to be drawn. c) Implementation method The project manager will recommend the most reliable methods of implementation; some examples are as follows: Determining the angle of the excavation.

• The method used to support the excavation, if required.

• The method to be used for trenchless pipe drilling, depending on the nature of the soil.

• Determining the method for soil decontamination. d) Team productivity The project manager will determine the team productivity for each task, based on practical experience with similar projects, and the estimator will be able then calculate the costs accordingly. e) Type of equipment Similarly, the project manager will specify the type of equipment required for each task and its productivity, and it will again be up to the estimator to calculate the costs accordingly. f) Subcontracting The project manager will specify the scope of work to be performed by the

company’s own teams, based on their availability, and the scope of work to be performed by subcontractors. g) Risks Finally, the project manager’s team will analyze the work that could be considered high-risk or out of the ordinary, and recommend additional measures, the cost of which will be estimated by the estimator. h) Site visit It would be extremely helpful for the estimator and the project manager to visit the project site jointly to discuss the elements to be considered in the estimate.

Example 1 Construction work inside a subway station: A discussion needs to take place to define the scope of the work that will be carried out during periods when the subway is not in operation, as well as how bulk materials will be transported, etc. All these methods have a repercussion on the direct and indirect cost estimates.

Example 2 Building tunnels for a new subway station: It is impossible to start calculating the estimate until the excavation plan of the tunnel has been developed by the project manager’s team. The estimator and the project manager will need to read the project geotechnical reports carefully before: • Determining the method used to excavate the tunnel – blasting, tunnel-boring machine, cutting machine, rock breaker, etc.

• Comparing the advantages and disadvantages of each method.

• The estimator will make a cost comparison for each method in order to reach a conclusion.

It would be unthinkable for the estimator to base their prices on one method of excavation and for the project manager to subsequently opt for a different and more expensive method.

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Communication during project execution The estimator must provide the implementation team with full records once the contract has been won, showing the all the assumptions made during the estimate.

Communication during the project closure period (lessons learned) Communication during the project closure period is extremely useful for future estimates (lessons learned).

Estimators must learn from each project. They must check: • Were their take-off quantities accurate?

• Were the costs and productivities correct?

• Was the preliminary schedule realistic?

• Was the projected profit achieved?

• Was the full scope of work covered in the estimate?

Conclusion Based on the foregoing, I believe there are two essential elements for company success: • Communication (horizontal and vertical) between the estimating and construction teams is a critical success factor.

• Team spirit: one person alone cannot lead a company to prosperity. On the other hand, team spirit is the key to success.

About the author Mansour Shami, PQS, CEC, is a Senior Estimator and Project Manager for MACOGEP. He has 41 years of experience in construction, estimation, and program management. He graduated in civil engineering in Syria in 1979, passed the PMP certification in 2008, and later obtained a DCS in Estimation in Montreal in 2018.

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Services • Architecture & Design

• Forensic Engineering

• Content Appraisals

• Forensic Laboratory Analysis

• Civil Engineering

• Property Appraisal

• Equipment Appraisals

• Quantity Surveying

• Environmental Sciences

• Structural Engineering

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QUANTITY SURVEYORS, ESTIMATORS, PLANNERS A leading Cost Consulting and Project Management firm requires the following candidates for its Montreal and Ottawa offices: Junior, intermediate and senior level Q.S.’s, Estimators and Planners with experience on: • Commercial and institutional projects • Industrial projects (oil/gas, refineries, mining, metallurgical).

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Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 23

Pourquoi la

communication entre les estimateurs et les chargés de projet est-elle importante?

Les projets qui commencent avec de faibles estimations sont voués à l’échec.

L

a communication entre l’estimateur et le chargé de projet de l’entreprise est essentielle au cours des différentes étapes du cycle de projet, notamment lorsqu’il s’agit de projets dont les caractéristiques dépassent le cadre habituel de l’entreprise : Communication relative au choix des projets à soumissionner L’équipe d’estimation fait souvent l’erreur de se tarir d’éloges à propos du nombre du nombre de soumissions qui ont été présentées et acceptées au cours de l’année, sans tenir compte des résultats finaux.

Lorsqu’il s’agit de sélectionner les projets à soumissionner, le chargé de projet est l’intervenant pivot. Par conséquent, il serait préférable que l’équipe ne s’engage dans le processus d’estimation d’un projet que si les dirigeants de l’entreprise témoignent un intérêt marqué à cet égard. Autrement dit, il est préférable que les efforts soient déployés sur les projets sélectionnés.

Communication pendant la période d’estimation des coûts Il est essentiel que le chargé ou l’équipe de la construction contribue à l’estimation des coûts afin d’éviter que des coûts surévalués entraînent la perte du projet ou que des coûts sous-évalués entraînent la perte de l’entreprise.

Voici quelques points clés à discuter : a) Lecture des rapports et des devis L’estimateur et le chargé de projet doivent étudier tous les documents d’appel d’offres afin de pouvoir échanger leurs points de vue.

Les exemples de cas qui auront d’importantes répercussions sur les prix sont à discuter : • Le rapport géotechnique La nature du sol à excaver : quelle est la classe du sol? Est-ce un terrain rippable qui pourrait être excavé au moyen d’une pelleteuse? Ou est-ce une roche solide qui nécessite un brise-roche ou un dynamitage?

S’agit-il d’une excavation de type 2 nécessitant un soutènement? Quel type de soutènement sera nécessaire?

Palplanches? Ou un système moins coûteux suffira-t-il?

Existe-t-il un moyen d’éviter les coûts de soutènement en considérant les pentes d’excavation?

• Le rapport environnemental Le projet est-il situé dans une zone où le bruit doit être contrôlé? L’estimateur doit-il tenir compte des coûts liés à certaines activités qui doivent être exécutées pendant les périodes hors disposition?

Quelles sont les mesures que mettra en place le chargé de projet pour

24 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2020

réduire le bruit (démolition, travaux de bétonnage, compresseur, etc.) ou pour éliminer la poussière de construction?

Le rapport environnemental identifie-t-il les spécimens à conserver sur le site du projet? – quels sont les coûts associés?

Le rapport mentionne-t-il la présence d’amiante?

Le sol est-il contaminé?

• Les plans mécaniques et électriques Le chargé de projet sera le mieux placé pour développer les coûts mécaniques et électriques, tels que : indiquer le tracé et la taille des conduits; aviser si ces systèmes nécessiteront des travaux supplémentaires de structure ou d’étanchéité; proposer des méthodes de manutention des équipements lourds, etc.

• Proposer des alternatives Un chargé de projet expérimenté avec l’aide de l’estimateur, pourra proposer des alternatives afin de réduire le coût global du projet sans compromettre la qualité. Ces alternatives pourraient permettre à l’offre de se démarquer en lui donnant une valeur ajoutée. b) Échéancier préliminaire L’estimateur et le chargé de projet devront joindre leurs efforts et leur expérience pour établir un calendrier To return to Table of Contents CLICK HERE

préliminaire réalisable du projet.

L’estimateur seul, même étant expérimenté, pourrait sous-estimer ou surestimer la durée du projet.

Cet échéancier préliminaire permettra de réaliser ce qui suit : • Calculer les frais généraux du projet.

• Calculer les coûts liés aux conditions hivernales.

• Déterminer la durée des tâches, et de ce fait estimer la main d’œuvre et les équipements nécessaires.

• Établir un plan de financement périodique du projet; discuter les marges de crédit avec les institutions financières, etc.

• Établir les histogrammes de la maind’œuvre et des équipements, ce qui permettra de calculer des coûts plus précis.

• Dessiner la courbe S. c) Méthode d’exécution Le chargé de projet recommandera les méthodes d’exécution les plus fiables; notamment : • Déterminer l’angle de l’excavation.

• Définir la méthode de soutènement de l’excavation, si nécessaire.

• Établir la méthode à utiliser dans le cadre d’un forage pour une conduite sans tranchée, selon la nature du sol.

• Déterminer la méthode de décontamination du sol. d) Productivité des équipes Le chargé de projet pourrait déterminer, en s’appuyant sur son expérience pratique des projets similaires, la productivité des équipes pour chaque tâche, et l’estimateur pourrait ensuite calculer les coûts en conséquence. e) Type des équipements De la même manière, le chargé de projet pourrait indiquer le type des équipements requis pour chaque tâche et leur productivité pour permettre ensuite à l’estimateur de calculer les coûts en conséquence. f) Sous-traitance Le chargé de projet indiquera la portée des travaux qui seront exécutés par les équipes de l’entreprise, selon leur CLICK HERE to return to Table of Contents

disponibilité, et la portée des travaux qui seront exécutés en sous-traitance. g) Risques L’équipe du chargé de projet analysera les travaux qui pourraient être considérés à haut risque ou hors du commun, et recommandera des mesures supplémentaires dont l’estimateur évaluera les coûts. h) Visite du site de projet Il serait idéal que l’estimateur et le chargé de projet procèdent conjointement à la visite du site pour discuter sur place les éléments à considérer dans l’estimation.

Exemple 1 Travaux de construction à l’intérieur d’une station de métro : Une discussion doit être menée pour définir la portée des travaux qui seront effectués pendant les périodes hors service du métro et pour indiquer le moyen de transport des matériaux volumineux, etc. Toutes ces méthodes ont des répercussions sur les estimations des coûts directs et indirects.

Exemple 2 Construction de tunnels pour une nouvelle station de métro : Il est impossible de commencer à calculer l’estimation tant que la méthode d’excavation du tunnel n’a pas été élaborée par l’équipe d’exécution.

L’estimateur et le chargé de projet devront étudier attentivement les rapports géotechniques du projet pour ensuite : • Déterminer la méthode utilisée pour procéder à l’excavation du tunnel – travail dynamitage, tunnelier, haveuse, brise-roche, etc.

• Comparer les avantages et les inconvénients de chaque méthode.

• L’estimateur effectuera une comparaison des coûts pour chaque méthode d’excavation afin de parvenir à une conclusion.

Il serait impensable que l’estimateur fonde ses prix sur une seule méthode d’excavation et que le chargé de projet opte par la suite pour une méthode différente et plus coûteuse.

Communication lors de la mise en œuvre du projet Après l’obtention du contrat, l’estimateur doit fournir à l’équipe d’exécution des dossiers complets contenant toutes les hypothèses formulées lors de l’estimation.

Communication pendant la période de clôture du projet (enseignements tirés) La communication pendant la période de clôture du projet est extrêmement utile pour les estimations futures (enseignements tirés).

L’estimateur doit tirer les enseignements de chaque projet. Il doit vérifier les points suivants : • Les relevés de quantité étaient-ils exacts?

• Les coûts et les productivités étaientils corrects?

• L’échéancier préliminaire était-il réaliste?

• Le profit projeté a-t-il été atteint?

• Toute la portée complète des travaux a-t-elle été prise en compte dans l’estimation?

Conclusion Compte tenu de ce qui précède, il existe deux éléments essentiels à la réussite de l’entreprise : • La communication (horizontale et verticale) entre les équipes d’estimation et d’exécution est un facteur de réussite déterminant.

• L’esprit d’équipe : une personne ne peut pas mener seule une entreprise à la prospérité. En revanche, l’esprit d’équipe est garant de son succès.

À propos de l’auteur Mansour Shami, ÉCA, ECC. Estimateur principal et chargé de projet chez MACOGEP. Il compte 41 ans d’expérience dans la construction, l’estimation et la gestion de programmes. Diplômé en génie civil en Syrie en 1979, il a obtenu la certification PMP en 2008, puis a obtenu un DEC en estimation à Montréal en 2018.

Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 25

Working from home:

transition to the self-employed PQS

W

orking from home has recently become a new way of life for a large portion of the workforce due to the COVID-19 pandemic. The question often comes up, “What if I became my own boss and transition to a self-employed PQS?” Startup will require cash reserves for the first two to three months while you get yourself into operation. Besides setting up dedicated office space, you will need a company name, logo, website, email address, phone number, business cards, a company profile with your resume, and a business bank account. Your office should be fully equipped with a dual-screen computer, a laptop, and a large-format colour laser printer.

Get the word out, make cold calls, and work your contacts for opportunities.

Scan construction publications like Construction News and BC Bid for leads.

Keep your contacts informed of what you are doing and what you can offer.

There is the ethical issue about leaving your employment that needs to be handled correctly. Your employment contract will have specific terms and conditions. In short you leave with nothing. There will also be strict terms about your employers’ and clients’ intellectual property, to which you are not entitled.

The following outlines some of the regulatory requirements and business practices to consider for operation as a self-employed entity.

• Incorporate as a limited company.

Besides benefits for small business write-offs and taxes, this allows you to pay yourself a salary and continue

to contribute to the CPP. Many of your personal expenses can be claimed for the business (charging rent for your office, mileage on your car, etc.).

• Register with the CRA as a business and get a business tax number. You are now responsible to collect and remit GST, pay payroll tax (CPP and payroll tax withheld each pay cheque) and eventually pay Corporate Tax installments. The CRA is relentless in collecting on time and will issue late payment penalties and charge interest.

• Obtain the services of a CGA accountant. An accountant will set up the business account structure in a software package like Quickbooks.

This allows you to infill the data and book entries throughout the year. You issue monthly invoices to clients, receive cheques, deposit the cheques, make payroll payments, expense payments, CRA payments, and record these directly into the software package. The accountant prepares and files the year-end statements with the CRA using the book information that you prepared throughout the year.

• Obtain errors and omissions liability insurance for minimum of $2 million.

All government and some private clients (such as Architects) require this coverage be in place. Be prepared to pay an annual premium of $5,000 to $10,000.

• Obtain commercial general liability insurance coverage in the same $2 million range.

• Register with Worksafe (Workers Compensation Board) and make sure

26 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2020

you have the appropriate classification rate. It requires a small premium each year, but it is the law and the penalties for ignoring to register and pay can be extreme.

• Obtain business licenses. They are required not only in the municipality in which you reside, but generally in other municipalities in which you work.

Proof of license is often required before starting work.

• Maintain your CIQS membership and all your other professional designations.

These are required for your E&O Insurance and some clients stipulate a PQS only to work on their projects.

Continue with expanding education and qualifications (CPD). Maybe, consider offering a specialty service.

• Make sure all software is properly licensed. Maintain software subscriptions.

Backup all client data and ensure that your web access is secured with proper firewalls and anti-virus/malware scans.

• Obtain disability insurance. In the event of accident or illness and you are not able to work, it will cover a portion of your monthly costs. Life Insurance and a medical benefits package could also be considered.

• Understand your cashflow. The cycle of executing the work, sending the bill for the work, and receiving payment for the work, can take an average of two to three months. This can cause cashflow problems if not considered in conjunction with your outgoings. Having a couple of months outgoings in savings can cover operations during a quiet time. Getting paid in a timely manner To return to Table of Contents CLICK HERE

I have found being self-employed has brought much satisfaction along with the freedom of being my own boss. can be extremely difficult. Working for Architects can mean you will not get paid until they have been paid by their client. Expect three to five months from billing to receiving payment.

Institutional and Municipal clients usually pay within one month.

• Be aware of the market fee structure and going rates. With a low overhead cost, you already have a big advantage over the larger companies. There is a price point for estimates and services that seems acceptable in the marketplace.

Working on an hourly rate might seem attractive, but lump sum fees for work are where the profits are made • Build resource relationships with other independent QSs or other qualified individuals to sub-contract for take-off, and specialist estimating like mechanical, electrical, earthwork, civil, scheduling,

VA, etc. You will need to include these in your proposals so that you show you have a resource base, and are not just one person. It is feasible to take on a major project with only a few qualified, experienced individuals, as long as you have an organized work plan and can deliver a quality product.

• Avoid a partnership. I was given this advice a long time ago and I think it is

About the author James (Jim) Bush, PQS, founded JBA Ltd in 1994 and has specialized in providing first-class professional cost consulting services over the last 26 years. Previous employment includes almost a decade with a national QS firm where he led project teams on major projects throughout Canada and overseas.

Originally qualified as a PAQS in New Zealand, Jim has 45 years’ experience in the QS field, the last 26 years being self-employed.

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still a sound statement. Partnerships often end with big problems and usually over money.

Working on your own will usually mean some long hours and require significant effort, but the reward goes directly into your own pocket. Be disciplined, establish specific work hours, and routines. I have found being selfemployed has brought much satisfaction along with the freedom of being my own boss. With world inter-connectivity, it does not matter that you are conducting business, or a Zoom meeting, from a far-off land.

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Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 27

Contractor

payment protection in the modern era1

S

ince the beginning of the 20th Century, Canadian provinces have had some form of security for parties in the construction industry, through construction (or mechanic’s) lien legislation (‘Liens’). Liens are generally limited to the amount of money owed to contractors that improved the property under a contract or in quantum meruit. Liens sought to encourage construction in developing economies allowing landowners to use their land as security for improvements, at a time when credit was limited, whilst permitting contractors the right to secure payment if the landowner failed to pay by enacting the lien. Liens are alien in most common law jurisdictions except for the US2, where the concept originated, because of the maxim quicquid plantatur solo cedit3 and privity to contract.

Liens provided protection to the economically weaker party but brought about risks to the landowner if a dispute arose between the contractor and a party in its supply chain. To combat this, landowners sought bonded contracts to protect against unpaid subcontractors and suppliers from asserting lien claims over a project. Today’s construction market is now partly regulated by surety bond underwriters, pre-qualifying potential bidders using bonds, which in effect creates barriers to entry.

While revolutionary at the time, lien legislation is now generally seen as outdated, complex, costly and time consuming to enforce. It doesn’t seem to have solved the problem of delayed payment, where cashflow is the lifeblood of the industry.4 Holdbacks, lien trusts and bonds only prevent default of payment, all essentially an after-the-fact remedy.

International experience Delayed or disputed payment within in the industry is a global issue. In the past, construction disputes only had the mechanisms of mediation, arbitration, and litigation to resolve disputes. The UK identified that delayed payment was 28 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2020

hindering progress within its industry, introducing legislation in 1998 to address payment delays and improve the flow of money. The HGCRA 19965 provides entitlement to staged payments, prohibiting ‘pay-when-paid’ provisions, the right to refer disputes to adjudication, and suspension of performance for non-payment on construction contracts. Other common law jurisdictions swiftly adopted similar security of payment provisions, although the payment and adjudication provisions are slightly different in each jurisdiction.

Reform in Ontario Lien legislation didn’t address the practical issues of timing of payments or dispute resolution, there was a clear gap in this legislation. In 2015 Ontario, as the first province, instructed an expert review of the effectiveness of the Construction Lien Act 1990 (‘Act’) in achieving its policy objectives within a modern context. The consequent report6 confirmed that there was consensus in retaining existing lien remedies by stakeholders at all levels, albeit requiring more effective amendments. Clearly lien protection is sacrosanct to parties down the supply chain and too extreme an amendment to remove.

The Report recommended lien modernisation provisions, a new statutory system for prompt payment and targeted adjudication framework to resolve payment disputes quickly. These formed the basis to Bill 142-Construction Lien Amendment Act, 2017, being ‘the biggest change in construction law in over 34 years’.7 Amendments of the Act are in effect since 1 October 2019. (i) Lien modernisation Significant amendments: increasing the time for lien claimants to preserve and perfect their lien rights, holdbacks can now take permissible forms such, as letters of credit or a bond, and mandatory progressive release of holdback in certain cases.

To return to Table of Contents CLICK HERE

(ii) Prompt payment and adjudication; The prompt payment provisions are a ‘cascading’ (28-7-7-7 days) flow down the supply chain.8 Interestingly it allows the ‘paywhen-paid’ concept to operate through the supply chain, if an adjudication is commenced regarding a payment dispute, with a determination in 30 days on the referred dispute. Adjudication supports the prompt payment provisions, possibly encouraging disputes to be resolved through negotiation as a more collaborative and less adversarial approach. A fast and relatively inexpensive mechanism to resolve disputes, with the protection of the court system may stimulate this. The threat of adjudication should change prevalent behaviours and practices within the industry.

Nothing in the Act restricts an unsatisfied payee to an adjudication determination from pursuing a lien claim on the same dispute. The new provisions account for the interface between the two systems, allowing a claimant sufficient time to preserve their lien rights. The rights granted by the Act essentially allows a party three avenues for dispute resolution, adjudication during a project, lien litigation at the end of a it, and traditional litigation or arbitration as a last resort.

Conclusion Ontario has led the way in construction law reform in Canada.

Nearly all provinces and the Federal Government have considered aspects of Ontario’s legislation by reviewing or modifying their lien legislation. Alberta is the latest province in October 2020, introducing a Bill9 with similar provisions to Ontario’s. There is a movement to bring Canadian construction laws up to date with modern practices, as exemplified in other common law jurisdictions. The amendments have created a legislative framework where ‘frontier’ and modern security of payment provisions will co-exist. If the prompt payment and adjudication provisions work effectively, then there should be a reduced demand for lien litigation.

Notwithstanding the complexities in conforming with the provisions of the Act, arguably, Ontario’s Construction Act is now the most comprehensive piece of security of payment legislation for construction in any common law jurisdiction. It provides a wide range of security through prompt payment, targeted adjudication, and lien provisions. Only time will tell if Ontario’s approach is the right template for rest of Canada as the Act will need to be increasingly adopted and tested in operation.

Footnotes 1 The article is based on a dissertation completed in September 2019 by the author as part of the fulfilment of the MSc degree in Construction Law & Dispute Resolution, King’s College London, UK. 2 In 1987 NZ repealed its lien act due complexity enforcing a lien and its limited use/effectiveness in Australian states although none are comparable to rights granted in US and Canada.

3 Whatever is affixed to the soil belongs to the soil, which transfers risk like a “pay-when/if-paid” clause between a contractor and subcontractor.

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Prism Economics and Analysis, The Need for Prompt Payment Legislation in the Construction Industry, 2013.

5 Housing Grants, Construction and Regeneration, Act 1996, amended by Part 8 of the Local Democracy, Economic Development and Construction, Act 2009.

6 Striking the Balance: Expert Review of Ontario’s Construction Lien Act (2016).

7 Naqvi, Y, Official Report of Debates (Hansard) No.130, Legislative Assembly of Ontario (4 Dec. 2017).

8 Only once a ‘proper invoice’ is submitted to an owner.

9 Bill 37 The Builders’ Lien (Prompt Payment) Amendment Act, 2020.

4

About the author Chris Kelly, PQS, recently completed a MSc. in Construction Law and Dispute Resolution at Kings College London, UK. He has broad experience in estimating, project controls, contract and claims management for EPCMs, contractors and consultants.

Chris has worked on mining, oil, and gas projects in western Canada; infrastructure projects in the UK and Singapore; and now for Ballymore Group, a property developer in London.

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Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 29

C

How a

PQS-prepared reserve fund study can protect condominium value and reduce risk of excess cost overruns

anada’s inventory of condos is getting older; keeping them healthy requires regular checkups to identify and properly price nonroutine repairs and replacement.

Condominiums are a relatively new home ownership option in Canada. They first became legal in 1967. By 1970, there were 1,000 across the country. Today there are more than a million, 600,000 in Ontario alone. Just over 13% of Canadians now live in one, whether a high-rise, low-rise, or townhome complex in which dwellings are owned individually while land and common elements are held in joint ownership with others. Condos have become a major – and still expanding – feature of the housing landscape, especially in major urban centres.

Condos, like people, get older. We both have components that wear out and need predictable maintenance, repair, and replacement. Instead of vision, hearing, joints, and skin in humans, it is HVAC, plumbing, roofing, and exteriors, especially window walls and glass curtains, for condos.

Regular check-ups help keep us both healthy. A building condition assessment that precedes a reserve fund study is like a check up on projected condo health.

Most provinces have long required condominium corporations (or strata corporations in BC and syndicat de

copropriété in Quebec) to keep a reserve fund, money set aside for major repairs and capital expenses expected over the next 20 to 50 years. The funds are exclusively for common property components with a limited useful life. How long a condo can last is a topic for another article. The first generation of condos in Canada are now in their 40s, with next two in their 30s and 20s – when repair or replacements costs can start mounting.

Forewarned is forearmed A reserve fund study, also known as a depreciation report, enables condominium boards to plan ahead by providing projections about when, and which, items will need major non-routine repair or replacement, and how much they will cost in that estimated future time frame.

The initial study or report is typically revisited every three years, with every other updated study including a site inspection and building condition assessment. Best practices are for condo corporations to update reserve study numbers annually when developing their yearly budget, and to plan for 40 to 50 years for repairs and maintenance, well beyond the 30-years minimum typically required.

In a building condition assessment, a site inspection establishes a baseline condition of all the elements in the

30 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2020

complex to inform an estimate of their useful remaining life. The financial analysis that follows examines current reserve funding levels and determines how much money is required to cover the cost of anticipated repairs or replacements.

An effective study will include options for funding that provide for spending on major repairs and replacement as well as reduce the risk of excess cost overruns.

Proper funding will protect the building as well as condominium board members.

The risks of underfunding Some condominiums boards or homeowner associations allocate between 15% to 40% of condo fee assessments to their reserve fund, but that is no guarantee that the reserve will be adequate. There are multiple risks to underfunding. It can compromise structural and functional integrity, as well as the appearance of the building(s) and grounds, the safety of residents, and property values. Even so, research indicates that reserve funds of more than 70% of condo corporations reviewed by a major reserve fund study provider were less than 70% funded.1 The usual suspects Roofs are typically first to need replacing at about 20 years, then an HVAC overhaul at 25 years. The longevity of newer energy To return to Table of Contents CLICK HERE

efficient systems has yet to be tested.

Elevators, which may not need extensive repairs for up to 20 years, may still require extensive maintenance for 10 years before eventual replacement. Plumbing and piping can be expected to last up to 50 years. Glazing, sealing and glass will need replacement within 20 to 25 years.

Expect costs for the glass-sheathed towers that have become almost standard over the past decades to rise sharply as the buildings age. Windows will fog from leaky seals and minimal insulation between glass panes, requiring expensive maintenance or replacement of window and/or curtain walls. That process could start in as few as 15 to 20 years, according to some experts.2 Added to these well-established timelines are new uncertainties connected to expenses for repairing wear and tear due to the use of condos as short-term rentals as well as adaptations that may be required for infection prevention and control in the wake of COVID-19.

How PQS expertise can add value There are many providers certified to conduct reserve fund studies. A PQSprepared study has the added advantage of drawing the discipline’s broad and deep knowledge of construction costs, for both materials and labour. The benefit is even stronger when the firm has an up-to-date, country-wide, cost database to inform the cost projections for allocating funds.

The old adage that an ounce of prevention is worth a pound of cure is especially applicable to reserve fund studies, doubly so in uncertain times.

Ensuring that a study provides reliable costing estimates needed for adequate funding can make a significant contribution to protecting a condo complex’s long-term value, function, appeal, and safety.

References 1 www.fsresidential.com/ontario/ news-and-events/articles/ understanding-condominiumcorporation-reserve-fund 2 www.huffingtonpost.ca/dan-sbarnabic/condos-lasting_b_ 6956838.html

About the author Michael Zegarelli, PMP is a Director at BTY with over 18 years of experience in the construction industry. He has contributed to the management and execution of complex facilities management and life-cycle planning for built assets and capital infrastructure across Canada. His expertise includes project management, life-cycle and facility management cost consulting, and risk management services. Michael is an accredited Project Management Professional with a background in mechanical engineering.

At RLB, we believe that a better tomorrow is created through a flawless execution today.

With a network across the globe and a heritage spanning two centuries, RLB is a leading organization in: ▪ cost management and quantity surveying, ▪ project management, and ▪ advisory services.

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Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 31

Providing services: errors and omissions insurance The importance of the correct Insurance for your professional practice If you are a business advertising and providing professional services, there is a level of accountability expected from a client, especially in cases where the services provided, or your personnel providing those services, require specific designations. When clientele places its trust in your expertise, you are expected to deliver on that promise; however, as with any professional service, there is a degree of risk associated with providing those services. This is especially true with design and consulting services where the risk profile greatly increases as the consultant recommendations have the potential to significantly affect a construction project – and any missteps have greater risk of resulting in financial loss for a third party. This is where errors and omissions insurance comes in.

Commercial General Liability (CGL) and Errors & Omissions (E&O) A company may assume that if it has General Liability (GL) Insurance, it is covered. Commercial general liability insurance is designed to protect you and your business from a loss if you’re found

legally liable for bodily injuries or property damage to a third party, caused by the product you sell or the service you provide; however, if you are providing professional design or cost consultation services, General Liability coverage is likely not adequate. GL policies generally contain an exclusion for any loss arising out of professional services rendered, something that is often overlooked when considering professional insurance requirements.

Errors and omissions insurance (E&O) otherwise known as professional liability insurance protects companies, their workers, and other professionals against claims of inadequate work or negligent actions. Traditionally, E&O is associated with financial loss of a third party.

For example, with design/construction claims, if something goes wrong on a project, all involved parties can be named, even if they did not contribute to the loss event.

Kate Della Mora, a National Specialties Growth Leader with Marsh Canada Limited, based in Toronto, outlines the importance of remembering what E&O can do for these situations. “Typically, insurers have in-house specialized claims professionals, as well as lawyers

32 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2020

on retainer with which they have good relationships. E&O gives your company more power in a situation where it is named in a suit, regardless of fault or liability. The Insurers’ personnel and connections have negotiating power to handle the claim in a quick, concise, and cost-effective way. If you do not have E&O insurance, you are left to your own devices and it can be a lot to navigate in terms of finances, time, and resources.

E&O gives your company more power in a situation where it is named in a suit, regardless of fault.”

Stepping back, E&O protects not just your company as an entity, but past and present employees within the company.

It assures liability and accountability as a company that is guaranteeing a certain quality of service. It can also cover a company not just for errors, but for events such as missed deadlines, essentially anything that can alter a provided budget or the bottom line of a project, or that results in a financial burden to a company.

A caveat to the above is contractual obligations or warranties/guarantees are not covered by E&O insurance, as these are considered “business risks,” and there is a moral hazard related to insuring To return to Table of Contents CLICK HERE

warranties/guarantees provided. However, E&O coverage might apply if the delay or missed deadline can be attributed directly to professional negligence or error.

Having E&O insurance is not a substitute for proper prevention procedures that a company should have in place, just as it does not aim to advertise that your company is likely to make errors in the services you provide.

With every human-operated service there can be room for human error – this is a given. If your company carries E&O insurance, it shows that you have taken preventative measures toward the risks associated with the services you do provide, or even hidden risks which may not have been outrightly obvious during the bidding phase. These risks, like any, can be mitigated by having proper prevention procedures in place.

When providing key services that can have a huge impact on project cost, feasibility, and project design, it is critical to implement effective risk management strategies around the delivery of your work. The list below represents the top five risk management tips from an insurance provider’s perspective: 1. Have a written standardized contract.

This should include limitation of liability clauses and hold harmless agreements in place, as well as dispute resolution clauses.

2. Develop and use internal written documentation. This includes project files, change requests, scope of work amendments, authorizations, etc.

3. Maintain continuity of personnel on projects, wherever possible ensuring that the same team is involved from project start to end.

4. Have a formal process for claims management in place. When claims or issues are reported, this will allow prompt and early responses.

5. Use standardized go/no-go checklists for project bidding and acceptance.

These should include a formal overview of opportunities vs. associated risks of projects.

Although the quantity surveying/cost consulting profession is considered a relatively low-risk venture in terms of errors and omissions, estimating can still be a subjective field. Engineering and CLICK HERE to return to Table of Contents

environmental services represent a greater risk to insurers when considering errors and omissions. A small misstep when providing such services can result in a substantial financial burden. Higher risk services such as these require a greater amount of attention to detail as well as attention paid to the procedures in place for quality assurance and control of the recommendation reports that go to clients.

Preventing risk also involves ensuring the experts sent into the field are adequately trained and have the appropriate knowledge to avoid these situations, and it is paramount they keep up with the most current legislations and codes. This is where continued education and development programs for your team can demonstrate to your broker or insurer that you take risk

mitigation seriously. Furthermore, it shows your consultants are equipped with proper training and knowledge of procedures, and their reporting goes through a rigorous quality assurance procedure prior to being released to a client. E&O insurance is simply another prevention measure that proves to clients your dedication to risk management and it can ultimately assist in reducing the cost of your insurance premium.

In summary, a good insurance policy cannot mitigate poor practices. It is vital for any professional service organization to understand the risks its business units face, to initiate risk management strategies to mitigate those risks, and to ensure you have the correct strategic partner in your broker to have adequate coverage for those risks.

About the authors Ross Huartt PQS, GSC is a highly qualified Professional Quantity Surveyor and recipient of the Gold Seal Certification in Estimation issued by the Canadian Construction Association.

His international experience in New Zealand, Australia and the UK, have given him the opportunity to work on a diverse range of projects including civil, medical, education and commercial buildings. Ross applies his vast experience to his role as President of MBC Group.

Kate Della Mora is Senior Vice President and the National Specialty Growth Leader for Marsh Canada Limited. Her experience spans more than 15 years of Specialty Errors and Omissions, Architects and Engineers, Construction Professional Liability, Single Projects, E&O Programs, Directors and Officers Liability, and Cyber Insurance. Kate graduated with an Honours Bachelor of Business Administration from Wilfrid Laurier University. She carries a CIP designation from the Insurance Institute of Canada, and is an active member of the Professional Liability Underwriting Society (PLUS).

QS Online Cost Consultants Inc. Halifax, Nova Scotia p. 902 405-1504 halifax@qsonlinecostconsultants.com www.qsonlinecostconsultants.com

Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 33

Project Profile

Corner Brook Acute Care Hospital

N

ewfoundland and Labrador is getting a new $750 million state-of-the-art hospital, and it’s not where you might think: Corner Brook – a city of roughly 32,000 people on the island’s west coast – has been waiting for well over a decade for their new hospital and its finally happening.

Planning for the project began in 2007. After years of political promises and planning, the hospital is expected to open in late 2023. The province selected a site in September 2009 and, by fall of 2010, it was assumed construction would begin sometime in 2012. Through this process, planning, re-planning, involvement of multiple consulting firms and the leadership of five premiers (and now a sixth), construction was delayed.

In 2013 the province instructed a team to proceed with design and preliminary work on both the hospital and an attached care home. In 2015, the instruction was to refocus on the hospital only. Ultimately, political changes led to further delays and alternative planning.

Two teams were prequalified to submit proposals to design, build, finance and maintain the facility. The final stage of the procurement process kicked off in January 2018. After 17 months, in June 2019, the Corner Brook Health Partnership was selected as the preferred proponent. The successful team consists largely of Plenary Group, PCL, Marco Services, Parkin Architects Limited, John Hearn Architect, Johnson Controls, among others. The second team, with the ultimately unsuccessful bid was the Atlantic Healthcare Partnership, led by Sacyr Concesiones of Spain and DIF infra of the Netherlands, both of which have offices in Toronto. Atlantic Healthcare Partnership also included Canadian design firms, Allied Construction Management of St. John’s and Brook Construction (2007) of Corner Brook.

The new 600,000 SF facility comprises seven storeys and 164 beds. Once complete, the hospital will be connected to a $120 million, 145-bed, long-term care home that began construction in 2017 and was completed this past February.

www.plenarygroup.com/projects/americas/corner-brook-acute-care-hospital

www.plenarygroup.com/projects/americas/corner-brook-acute-care-hospital

www.marcogroup.ca/projects/corner-brook-acute-care-hospital

In the earlier planning years, the Provincial PCs estimated the project would cost around $800 million. The deal inked with Croner Brook Health Partnership is somewhere between $700 million and $750 million.

At the outset of the project, the Government of Newfoundland & Labrador noted the project is expected to contribute $460 million to the provinces GDP. A massive project such as this comes with a significant schedule to match the complexity and value. The sod turning was on August 16, 2019. Steel erection

34 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2020

was completed in mid-October 2020.

With steel finished, concrete work will continue until Christmas 2020. PCL’s team indicates they are on track for their targeted completion date of November 7, 2023. The construction team has noted the COVID-19 pandemic has not slowed the schedule. The significant use of a workforce made up of largely of Newfoundland and Labrador skilled trades has meant no self-isolation or quarantine requirements for workers, which otherwise would delay crews and scopes of work.

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www.marcogroup.ca/projects/corner-brookacute-care-hospital

www.vocm.com/2019/07/02/province-awardscontract-for-new-corner-brook-hospital

The building does have some unique characteristics such as the 375 geothermal wells drilled under one of the parking lots for sustainable heating and cooling. In addition, there is the prefabricated exterior wall system, providing several advantages for construction crews, including speed of

erection and avoiding extended use of a temporary fall arrest system.

As with all significant projects – particularly outside major centres – employment and opportunity is one of the main focuses for local firms and workers.

At the outset of the project, the provincial government projected the project would generate over 4,000 person years of employment. Project administrators, who track ongoing workforce and employment statistics, reported that, by mid-August 2020, work had topped 100,000 hours, 90% of which by Newfoundland and Labrador workers.

Once completed, the hospital will serve the residents of the province’s west coast with the same services as the existing Western Memorial Regional Hospital it is replacing, (which is overdue for retirement). It will include space for a PET scanner and an expanded cancer care program that includes radiation services, a treatment that currently requires area residents to travel long distances to receive. For the next few years, the project is one of the area’s major employers and once operational, will serve as a landmark health complex for west-coast residents.

About the author Carl Pedersen, B. Tech (CM), PQS, GSC is an Estimator for Bird Construction in Manitoba. With a background in hands-on construction work through a broad range of residential and ICI experience, he now has a primary focus on design-build industrial and light industrial project planning, development and cost management. Carl has also served in various roles on the CIQS Prairies & NWT Chapter including Vice President, Secretary, and Winnipeg Chapter Representative.

Carl is also an Assistant to the Editor for the Construction Economist.

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Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 35

Federal government takes the long view to address economic slump with stimulus

CIQS pushes collaboration

to speed delivery

T

he early story of the COVID-19 pandemic has been the tremendous personal toll it has taken on many thousands of Canadian families. Even many who have had and recovered from COVID-19 continue to see lingering effects of the illness. In my view, there is no more fitting comparison for the toll the pandemic has also taken on the economy.

Early stage shutdowns of local economies saved countless lives, while putting hundreds of thousands of businesses at risk, and putting millions of Canadians out of work. Compassion dictates that this was the right thing to do for Canadian families, but I argue it was also the right thing to do for the economy. While we will feel lingering effects for years to come, Canada will recover.

Canada is in an enviable position.

Compared to many other countries – especially to our friends in the US – we are coming out of the emergency phase and adjusting to life with a new set of considerations in play. By moving quickly and early, we flattened the pandemic curve. As a result, policy makers are better positioned to plan for recovery.

The pandemic has been a catalyst of enormous change throughout the economy. The prevailing notion in Ottawa is that the construction sector has been less hard hit than retail, tourism, hospitality, and other personal services sectors. Decision makers are starting to understand that fueling an economic recovery does not just mean filling the cracks that were exposed during the pandemic. They are now considering what investments could catapult Canada’s economy forward while the public’s appetite for fiscal activism remains high.

The CIQS has taken a leading role in encouraging the government to bring forward investments quickly.

The organization wrote to the Prime

Minister and has educated senior officials at Public Services and Procurement Canada about the ways CIQS members can ensure projects are delivered more quickly and cost-effectively.

Over the weeks and months ahead, the CIQS will promote its pre-budget submission to the House of Commons Standing Committee on Finance as a path forward for the economy as a whole. When working with government, aligning with the priorities of the party in power can yield strong results. Typically, in a minority government situation, it would be more important to work with the leading opposition party but, right now, the NDP and Bloc Quebecois hold the balance of power. These parties are more aligned with the Liberals’ vision of a ‘green recovery’; it makes substantial investments in energy efficiency projects, green infrastructure, and retrofits for the built environment that would create significant economic activity over the coming years.

The federal government has committed to bringing forward a stream of infrastructure projects valued at $3.3 billion to combat COVID-19. These investments will be targeted at projects with $10 million or less in eligible funding, to reach as many communities and projects as possible. Each successful proponent will have had to show how its project directly supports community needs for adapting to life during the pandemic: upgrading ventilation systems, adding space in community housing, delivering broadband internet and mobile phone service to assist in physical distancing, and more. There is perhaps no clearer indication that the government is planning for a multi-year battle with the virus that could extend past 2022.

As part of the Investing in Canada Infrastructure Program (ICIP), this stream will require provincial and municipal investments, but the federal government is increasing its contribution to up to 80% of total project costs.

36 | CONSTRUCTION ECONOMIST | www.ciqs.org | Winter 2020

The CIQS has recommended that the government expedite the delivery of construction projects by bringing forward investments in other streams of ICIP. The plan is currently back-loaded, and bringing investments forward to 2021-2022 and 2022-2023 for streams like urban transit and green infrastructure. Social streams of the program will stimulate economic growth and help the sector recover.

Finally, the CIQS is making another important recommendation related to the growth and support of the profession. The federal government – and the provinces for that matter – will be running historic deficits for this fiscal year and likely for many years to come. As a result, there will be increased pressure from taxpayers to ensure every dollar is spent as efficiently as possible. The CIQS will be encouraging the federal government to study the significant benefits of engaging Professional Quantity Surveyors on all federal projects, and possibly encouraging their inclusion in bids and project plans.

The CIQS has already engaged Public Services and Procurement Canada on these efforts and looks to developing more relationships in Ottawa that will create traction on this recommendation.

About the author Rob LeForte is Vice President of Impact Public Affairs.

His experience includes advocacy successes for Canada’s construction sector, including infrastructure investments and tax policy changes to benefit small businesses. He recently facilitated ongoing collaboration between stakeholders and government to deliver prompt payment legislation in Ontario and at the Federal level.

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A

Quantity surveyors and integrated project delivery

lthough not new, integrated project delivery or IPD, is not necessarily a household term for most quantity surveyors. “IPD – an approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results, increase value to the owner, reduce waste, and maximize efficiency through all phases of design, fabrication, and construction.” i (American Institute of Architects). In Canada, there is now a dedicated CCDC contract: CCDC 30, 2018.

IPD follows the following process: Pre-Validation, Validation, Detailed Design, and Implementation. So where does the Quantity Surveyor fit in?

Pre-Validation In this stage, the client produces the business case for the project and works to establish the IPD team. During this period, the QS is required to establish a robust budget and cash flow for the project that will form the allowable cost. It is important that the QS working through this stage has strong conceptual estimating skills and understands any client factors associated with the project. The business case allowable cost should be set with realistic contingencies and allowances for the project, with well-rounded scope assumptions. Remember, the allowable cost must capture all construction and design costs, fixed profit amounts for the IPD team, along with a contingency or risk amount. It is also important to understand warranty costs and how these will be funded through the project.

This stage presents great opportunity for the QS to support the client in its team procurement, reviewing the proposed contractors, and supporting client communications with the proposed team, demonstrating the allowable cost assumptions and the financial model. At this stage of the process, it is critical that a good financial management system is set up to separate cost from overhead and profit. Transparency is key at this stage of CLICK HERE to return to Table of Contents

the process as the team will succeed or fail together with the IPD structure.

It is imperative that QS outlines and agrees on their role to the client and formalizes the expected review and support processes they wish to follow to ensure accurate and timely cost feedback to the client through the subsequent validation stage.

Validation This is the stage where certainty for the IPD team is established, culminating in a GO/NO-GO process for the project.

Here, the team works to develop the design only far enough for cost certainty to be achieved. In many cases, IPD will utilize a Target Value Design (TVD), a collaborative process involving all the project stakeholders to produce a design that meets the target cost and provides the best value for the Owner. Because this calls for designing to a budget, decisions are driven by continual estimating rather than estimating only at design milestones.

“I cannot stress enough the importance of strong conceptual estimating skills during the validation stage, as it is often where cost estimates fall short of the required standard,” said Kelly Fawcett, Director, IPD advisor with P1 Consulting who has previously supported three IPD projects. She added, “It is important that gap analyses are regularly conducted during the validation stage, to understand where the allowable cost varies from the target cost and to keep the team appraised of these changes to allow decisions to be made.”

The quantity surveyor is the ideal person to lead the TVD because the QS can quickly identify cost drivers in the project and better leverage industry benchmarks and past experience to set cost targets for the team to design to. It is important to note that, as a best practice, the QS should outline the level of effort to the client during the pre-validation stage.

An important element of the target cost is the risk allowance. When estimating a project at an early stage, there are allowances inherently made throughout the process, to allow for uncertainties in design

or scope. When the QS is developing cost, they should work to separate the known scope from allowances and uncertainties.

Those areas which are unknown should be identified, to allow the team to better define and capture them in the base cost or, otherwise, move them from the base cost to risk. Unknown items are often found in both base cost and risk allowances, driving the cost up and possibly requiring scope reduction in more developed areas. Often, risk development is performed by a team other than the design team. So, it is important for the QS to be involved in the risk development.

In summary, there is a great deal of benefit that a quantity surveyor can bring to the IPD process. Strong, early, conceptual estimating allows for quick decisions to be made on design and accurate cost tracking. Also, forecasting helps to mitigate delays in designing to the target cost. Setting a robust foundation during the pre-validation and validation stages leads to a successful implementation stage, and best value for the owner. The best IPD teams understand the importance of prompt change management and continuous cost forecasting. This is where the QS can be a great asset to the IPD team. The QS is well placed to keep the client and IPD team continuously appraised of cost forecasts, to drive value, and help to manage and mitigate project risk.

Footnote i American Institute of Architects

About the author Jon Gilford, PQS, MRICS, is an Associate Director with Turner & Townsend, and leads the Ottawa cost management team. He specializes in cost and commercial management and is currently supporting some of the largest real estate projects in Eastern Ontario.

Winter 2020 | www.ciqs.org | CONSTRUCTION ECONOMIST | 37

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