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

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Take full advantage of your benefits.We have worked with your organization to make it possible for you to save on both your home and auto insurance. That’s why, as a Canadian Institute of Quantity Surveyors Designation Holder, you have privileged access to the TD Insurance Meloche Monnex program, which offers you preferred insurance rates and various additional discounts. Make the most of your benefits — get a quote today and find out how much you could save!

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4 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2016 To return to Table of Contents CLICK HERE

Staff profiles – Sophia Chin You and Aliya Karim. . . . . . . 11Hydro vs. Wind vs. Solar power . . . . . . . . . . . . . . . . . 12PAQS 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16New CIQS video series . . . . . . . . . . . . . . . . . . . . . . 20Affiliate Leadership Profile – Quebec . . . . . . . . . . . . . 21Subsurface conditions and risk allocation . . . . . . . . . 22The Diary – requirements and approaches . . . . . . . . 33

Published four times a year on behalf of the Canadian Institute of Quantity Surveyors by

Third Floor - 2020 Portage AvenueWinnipeg, Manitoba R3J 0K4Tel: 866-985-9780 Fax: 866-985-9799info@kelman.ca www.kelman.ca

Managing Editor . . . . . . . . . . . . . . . . . . . . . . . . . . . Chris KelmanArt Design/Production . . . . . . . . . . . . . . . . . . Kristy UnrauAdvertising Coordinator . . . . . Stefanie HagidiakowMarketing Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . Jeff Kutny jeff@kelman.ca 866-985-9789

Publication Mails Agreement #40065075Send undeliverable addresses to: lauren@kelman.ca

Canadian Institute of Quantity Surveyors90 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

Executive DirectorSheila Lennon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . execdir@ciqs.org

Editor Arif Ghaffur, PQS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . editor@ciqs.org

Send Change of Address to:Canadian Institute of Quantity Surveyors90 Nolan Court, Unit 19, Markham, Ontario L3R 4L9

CIQS BoardChair:Matthew K. Weber, PQS(F)

Vice Chair and Secretary/Treasurer:David Dooks, PQS

Past Chair:Craig Bye, PQS(F)

Registrar and CIQS – Prairies and NWT Rep:Wendy Hobbs, PQS

CIQS – British Columbia Rep:Angela Lai, PQS

CIQS – Maritimes Rep:Erin Brownlow, PQS

CIQS – Newfoundland and Labrador Rep:Royston Lewis, PQS(F)

CIQS – Ontario Rep:Sheri Thompson, PQS

CIQS – Quebec Rep:Guillaume Robitaille, PQS

Education Administrator:David Lai, PQS(F)

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.

Features

Corners MessagesChair’s Message . . . . . . . . . . . . . . . . 6 Executive Director’s Message . . . . . . 8Editor’s Message . . . . . . . . . . . . . . . 9Congratulations. . . . . . . . . . . . . . . . 10

Aspiring Professionals Corner . . . . . 27Legal Corner . . . . . . . . . . . . . . . . . . 28CPD Corner . . . . . . . . . . . . . . . . . . 32

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

CONSTRUCTION ECONOMIST FALL 2016

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

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.

20

Chair’s Message

Matt Weber, PQS(F) A roadmap for the next 24 monthsfter another summer of warm weather, barbeques and a flurry of construction activity, the kids are

heading back to school and the weather is getting cooler. Must be time for the fall edition of the Construction Economist! On that theme, it is my honour to take over as CIQS Chair from our friend and colleague, Mr. Craig Bye, PQS (F) who has done an exemplary job over the last year.

Recently, the Board decided that one year is not sufficient time for a Chair to complete major mandates or initiatives. As the first Chair in over 30 years to hold this position for the next two years, I feel it is my duty to usher in real change on some major initiatives. Speaking of firsts, I will also be the first Chair to work with an Executive Director other than Lois Metcalfe in 38 years. Lois will be greatly missed, and her replacement Sheila Lennon has been nothing short of impressive in my dealings with her thus far. I know we are in good hands for the foreseeable future. In light of all these firsts, I believe there is an opportunity to help forward one of the most important tasks facing our industry—specifically, helping to educate and expand our aging profession to one also reflecting a younger generation who are either still at various levels of schooling, or have graduated and are looking for a career.

Under our new governance model with a Membership Coordinator at the national level, the backlog of applications has been cleared, applicants have a consistent and clearly laid out path to follow and are assessed on a uniform plane. Complaints about the process of applying for membership have dropped to near-zero and we have taken a major

step forward in our growth. Now that the application system is working well, we will focus our efforts on education, ensuring we have updated tests and policies, as well as having the ability to guide applicants through our process efficiently to, maintain the highest levels of members being certified by our Institute.

Also forthcoming are updates to our website platform and the creation of a new CIQS mobile application, which will comprise a working CPD module, an education tracking system, diaries for associates and students, and much more. I believe this will help pilot CIQS into the new digital age of online and mobile application works. At our board meeting in early September 2016, we laid out a roadmap for the next 24 months. The plan generally includes the following goals:• Update our website and online

application processes for the next generation of quantity surveyors

• Make the application process easier to process

• Educate and engage youth and the general public about what we do, promoting better recognition of our profession

• Ensure our industry is professionally recognized nationally and internationally

• Standardize board and committee work by creating and upholding standards

• Leave a lasting legacy to allow future boards to work more efficiently.

As part of our members’ call for more marketing, you will soon see a series of videos launched on our website and on various social media channels (Facebook, LinkedIn, Twitter, Instagram, etc.) over the coming months. In order to help expand our footprint, I ask that anyone reading this article please ‘share,’ ‘like’ and ‘comment’ on posts from CIQS and these videos. We all play a part in expanding our profession, and need your help to spread the word.

One last thing: I would also like to remind everyone of the PAQS 2017/CIQS 2017 Congress event coming to Vancouver in July 2017. I encourage everyone to visit our website at www.paqs2017.com and to make plans to come to Vancouver for this. It will be the first event where we will focus on attracting developers, lenders and consultants by stepping up the level of guest speakers, social activities and entertainment. It is my goal to double the attendance of the last year’s event and, as a result, improve understanding and awareness about our profession. I urge you all to sponsor and/or attend this event.

I am excited and honoured to serve as your Chair for the next two years and am looking forward to working with this outstanding group of board members.

Have a great fall everyone and we wish you all the best!

A I am excited and honoured to serve as your Chair and am looking forward to working with this outstanding group of board members.

6 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2016 To return to Table of Contents CLICK HERE

Message du Président du Conseil

près un autre été de temps chaud, de barbecues et d’activités de construction intense, les enfants sont

de retour en classe et la température devient plus fraîche. Le temps doit être venu pour l’édition d’automne du Construction Economist! Sur ce thème, c’est un honneur pour moi de reprendre la présidence de l’ICÉC de notre ami et collègue, M. Craig Bye, ÉCA (F) qui a fait un travail exemplaire au cours de la dernière année.

Le Conseil a décidé récemment qu’une année n’est pas suffisante pour permettre à un président de compléter des mandats ou des initiatives de grande envergure. En tant que premier président depuis plus de 30 ans à occuper cette position pour deux ans, je sens qu’il est de mon devoir d’initier des changements importants. Sur ce même sujet, je serai également le premier président à travailler avec une directrice générale autre que Lois Metcalfe, et ce, depuis trente-huit ans. Lois nous manquera grandement. À ce jour, j’ai été impressionné lors de mes échanges avec sa remplaçante, Sheila Lennon. Je sais donc que nous sommes entre bonnes mains pour l’avenir. Avec toutes ces premières, je suis convaincu qu’il s’agit là d’une occasion pour faire progresser l’un des plus important enjeux auxquels notre industrie fait face — plus spécifiquement, en aidant à éduquer et à développer notre profession vieillissante en une profession qui reflète également la jeune génération étant soit encore à différents niveaux de scolarité, ou ayant obtenu leur diplôme et qui sont à la recherche d’une carrière.

En ayant un coordonnateur des membres au niveau national, et ce, grâce au nouveau modèle de gestion, le retard quant aux demandes d’adhésion a pu être rattrapé. Les candidats ont

Une feuille de route pour les 24 prochains mois

maintenant un parcours clair et cohérent à suivre et sont évalués sur une base uniforme. Depuis ces changements, les plaintes relatives au processus de demande d’adhésion sont pratiquement inexistantes. Par conséquent, nous avons franchi un grand pas vers notre croissance. Maintenant que le système d’adhésion fonctionne bien, nous allons concentrer nos efforts sur l’éducation, la mise à jour des examens et des politiques ainsi que notre capacité à guider les candidats à travers notre processus de façon efficace, et ce, afin de maintenir les plus hauts niveaux de membres en cours de certification par notre Institut.

Également, des mises à jour de notre site Internet sont à venir en plus de la création d’une nouvelle application mobile ICÉC. Cette application comprendra un module DPC, un système de suivi pour l’éducation, des journaux pour les associés et les étudiants et plus encore. Je crois que tout cela aidera à propulser l’ICÉC dans la nouvelle ère du numérique avec des applications web et mobiles. À notre réunion de Conseil au début septembre 2016, nous avons défini une feuille de route pour les vingt-quatre prochains mois. Le plan inclut les objectifs suivants :• Mettre à jour notre site

Internet et notre processus de demande d’adhésion en ligne pour la prochaine génération d’économistes en construction;

• Faciliter la gestion du traitement des demandes d’adhésion;

• Éduquer et mobiliser les jeunes et le grand public pour une meilleure reconnaissance de notre profession;

• Assurer la reconnaissance professionnelle nationale et internationale de notre industrie;

• Uniformiser les travaux de

conseil et de comité en créant et en soutenant les normes;

• Laisser un héritage durable pour permettre aux conseils futurs de travailler plus efficacement.

Afin de répondre à la demande grandissante pour plus de marketing, nous lancerons au cours des prochains mois une série de vidéos sur notre site Internet et divers médias sociaux (YouTube, Facebook, Linkedin, Twitter, etc.). Afin de renforcer notre position, je vous demande de partager, aimer et commenter toutes les publications de l’ICÉC et ces vidéos en particulier. Nous avons tous un rôle à jouer dans l’expansion de notre profession et nous avons besoin de votre aide pour augmenter notre visibilité.

Un dernier détail: J’aimerais également vous rappeler que le Congrès PAQS 2017 / ICÉC 2017 aura lieu à Vancouver en juillet 2017. Je vous encourage tous à visiter notre site Internet au www.paqs2017.com et à planifier votre venue à Vancouver pour cet événement. Ce sera le premier événement ou nous concentrerons nos efforts pour attirer des développeurs, des prêteurs et des consultants en ayant plus de conférenciers, d’activités sociales et de divertissements. Mon objectif est de doubler le nombre de participants du dernier événement et ainsi renforcer la reconnaissance et la compréhension de notre profession. Je vous encourage vivement à promouvoir et/ou participer à cet événement.

Je suis honoré et enthousiaste de vous servir à titre de président pour les deux prochaines années. Je me réjouis de collaborer avec ce groupe extraordinaire qui compose le conseil.

En vous souhaitant un excellent automne, et tout le succès dont vous rêvez!

A

Fall 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 7CLICK HERE to return to Table of Contents

Executive Director’s Message

Sheila Lennon, CAE

s the season changes from summer to fall and the cooler air moves in, I find myself reflecting on my

first six months at the CIQS as the new Executive Director. With Lois’s retirement and farewell from CIQS in June 2016, the Institute lost its constant, its matriarch for the past 38 years. CIQS looked to succession planning and ultimately finding a new leader to fill the role of Executive Director. Every association should prepare a succession plan no matter what the size of the organization. Being prepared for the departure of a key executive can alleviate stress and concern and provide a level of comfort and stability.

After being selected as the successful candidate for the position, my new adventure began on April 4, 2016. For the first three months, the transition period, I shadowed Lois through the everyday workings of the Institute. Delving into the history, processes and policies and soaking up as much information as possible. It was also an opportunity to get to know my new staff

A Sophie and Aliya and learn their roles and contributions to the CIQS team. Lois and I quickly identified with each other in our work ethic and personality, sometimes finding ourselves finishing each other’s thoughts and sentences. I truly enjoyed my time working with Lois and truly understand why she was so loved and respected by all.

Now that the excitement and celebration of the CIQS Congress and Lois’ farewell has settled, it is my time to put my best foot forward and direct the CIQS into the future. At the September meetings, the Board moved forward in solidifying the strategic plan for the next few years. I see a lot of work ahead in the areas of technology, membership growth, education, marketing and structure.• Technology: Assessing where we

are and where we need to be. Developing useful applications and modules in regards to diaries, CPD and much more, allowing individuals a more efficient way to track their work and progress.

Moving ahead

I see a lot of work ahead in the areas of technology, membership growth, education, marketing and structure.

Did you know the CIQS is now

on Twitter and LinkedIn? If you want to stay connected and contribute to discussions across Canada, follow us on Twitter or join our LinkedIn Group. We look forward to hearing from you.

Stay Connected

• Membership Growth: Creating strategies to engage student members, especially with the aging demographic of the Institute.

• Education: Ensuring standards are at the highest level, implementing new tools for those working towards their professional designation.

• Marketing: Building awareness of the profession amongst industry colleagues as well as the general public. The new CIQS video series launched in September. Be sure to do your part by sharing with your network.

• Structure: Implementing policies and procedures for both the Board of Directors and staff. Linking the strategic plan to the operational plan and providing a resource that outlines roles and responsibilities.

Of course there will be more to come as the strategic plan rolls out and I am very excited about the future of CIQS. As we begin our work on these new initiatives, I know we are all working towards the same goal – “For the good of the Institute.”

8 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2016 To return to Table of Contents CLICK HERE

Arif Ghaffur, PQS

Editor’s Message

The economics of construction up to year 2020 and beyondVision or illusion?

onstruction is undoubtedly a major component of the Canadian economy – over 7% of the Canadian workforce

is employed in construction and construction contributes over $100 billion to Canada’s Gross Domestic Product. During the next ten years, the Canadian construction market is projected to continue to progressively grow, post multi-digit growth and become one of the largest construction markets in the world. Whilst these are impressive statistics, this will require equivalent growth in vision and leadership such that the Canadian construction industry can in fact realise its potential in terms of successful growth. The Canadian construction industry continues to undergo substantial developments as the dynamics of the whole supply chain are noticeably changing with established, emerging and new companies appearing in the market place, right across Canada. Professional and trades bodies are recognizing new and emerging companies as they themselves seek to increase their membership numbers. Irrespective of the nature of the services offered by these companies—be they advisory, design, construction, operate, maintain—both individual and corporate participants continue to change in a dynamic economic environment.

It is clear is that there are more and more new faces coming to the table due to organic growth of existing market players and those relatively new to Canada—not uncommon in a country built on a successive and successful immigration policy. Some of these entities and individuals are serving the need for resources to feed the increasing emphasis on infrastructure development right across Canada, in line with the

C current government’s known commitment to spend substantial amounts to address the infrastructure gap. In contrast to any inward migration, a broader international construction market with increasing buoyancy is likely to continue its search for suitably qualified professionals. Canada will not be immune from this outward-bound ‘brain drain’ as professionals with increasing experience in major construction become more and more sought after by international companies, particularly those operating to a greater extent in emerging markets right across the world.

It is clear that there are more and more new faces coming to the table due to organic growth of existing market players and those relatively new to Canada.

Simply put, irrespective of market pricing, as long as Canada maintains this level of immigration, then those immigrants will need housing. In addition, increasing levels of foreign investment have caused certain Canadian residential sectors to ‘overheat,’ leading to major concerns on housing affordability, and compelling British Columbia to impose a foreign homebuyer’s tax in an effort to ‘cool’ the market. The jury is still out on the overall implications of these measures.

Whilst there is much buzz around infrastructure development in particular, there is also a concern around the capacity and capability of the construction industry to deliver these projects to the expected quality, schedule and price, particularly considering the potential lack of market players. This increase in pressure to deliver projects to restricted budgets and aggressive time-lines, has resulted in greater concerns regarding the quality of construction documents, an example of which is a report from the Canadian Construction Association (CCA) Standard Practices Committee published in April 2016 titled Quality of Documents, derived from information gathered at cross-country workshops from a cross-section of industry stakeholders in their local regions. In analyzing the results of these surveys, the report identifies several key themes and causes of poor documentation. These include lack of final coordination, checking and proofreading; insufficient time for design; lack of coordination between architects and engineers; Owners’ (unnecessary) pressure; insufficient fee/design contingency. Descriptive though it is, the report offers no insights to the behaviour of project participants. It is therefore unlikely that behaviours will change, certainly not in the short term.

In parallel with a potential of such Canadian construction resource loss, there is also the fluid situation in Europe with the impending departure of Great Britain from the European Union and the threat of other countries joining in. This begs the question of whether there will be a mass exodus of people, (including construction professionals), and whether this will be a natural source market to feed the anticipated shortage of construction professionals in Canada. On the theme of immigration, the residential market continues to engage in discussions on capacity and pricing.

Fall 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 9CLICK HERE to return to Table of Contents

Editor’s Message

The CCA report states that the “… quality of construction documents remains an industry-wide issue, and one that affects owners, consultants and contractors alike. There is no party that is infallible, and all stakeholders have an important role to play in addressing this issue.” What is clear is that the blame culture will continue as the primary participants (Architects, Engineers, Contractors and Owners) continue to hold each other accountable for what they perceive to be the responsibilities of the others. Also, other sectors outside the residential and infrastructure sectors continue to undergo a challenging time. The natural resources sector, including mining, oil and gas, stops and starts by an almost daily consumption of commodity prices and their impact on expected financial returns. It is markets such as those in western Canada that continue to take the brunt of the economic downturn in this sector. Some cynics refer to these as ‘boom and bust’ sectors with little sympathy as these sectors have profited in the past to perhaps a greater extent.

What is apparent is that the fluctuation in oil prices is unlikely to stabilize any time soon. As a result, the oil and gas industry continues to suffer with no relief

in sight. Low prices have resulted in reduced investment, prompting oil and gas companies across Canada to scale back or even suspend projects that were slated for commencement only a short time earlier. Whatever the opinions on the woes of locations such as Alberta, the reality is that, the decline has seen capital expenditures for the oil and gas extraction industries totalling $8.8 billion in the second quarter of 2016, down 28.8% from the second quarter of 2015 (source: Statistics Canada). There is also of course the parallel emergence of other energy sources, (wind, solar and hydro), which continue to develop as viable alternatives. These will challenge the traditional sources of power, recognizing that alternative energy in itself has output restrictions and environmental challenges. In conclusion, the construction industry in Canada will be presented with immense opportunities and challenges leading up to and beyond 2020. So, some of you may say, “So what? What’s new?” Well, leading into year 2020 and beyond, irrespective of any specific Canadian Province or Territory, there could well be:1. Shortages of labour with

the requisite skills2. Inadequacies of suitably qualified

construction professionals

3. Lack of capacity/capability of contractors to deliver projects

4. A move towards modernization to address quality concerns and resource limitations

5. A more transient workforce as labour moves between provinces/territories

6. Consolidation of the market with further mergers and acquisitions

7. Entry of more international investors, contractors and consultants

8. Pressure in the public and private sector to deliver projects to quality, time and cost.

Quantity Surveyors can be part of the solution to the challenges, and help to write the success stories that unfold in the construction industry on an almost daily basis. Food for thought…

I hope that you and your families are having a wonderful Fall. If you have feedback, suggestions and, of course, any particular articles that you would like to be considered for publication, please reach out to us at editor@ciqs.org.

Construction Economist OnlineThe Construction Economist is also available in electronic format. Please visit the CIQS website www.ciqs.org and press the ‘Publications’ tab.

Congratulations to the following “Designation Holders” who have qualified as a PQS or CEC (including reinstatements):

CIQS – British ColumbiaKevin Brogan, PQSOfelia Grace Gomez Dizon, PQSKarl Goodwin, CECSimon Marchand, PQSRoland Rahoerason, CECPaul J. Thompson, PQS

CIQS – Members at LargeAbolade Abisogun, PQSGamal Abu-Askar, CECHo Chun Fai, PQSAriel Cordova, PQSLionel Dore, PQS

Stephan Georgette, CECRajeswaran Kumaravelu, PQS John Leong Pei Koe, PQSKodikarage Peiris, CECHakeem Olubodun Smith, PQSJimmy Ali Ukwubile, CEC

CIQS – OntarioBrentnol Archer, CECDerrick Caldwell, CECPankaj Chauhan, PQSAhmed Hamdy, CECKeerthi Hill, PQSLalith Kekulawala, CEC

Brian Kelly, CECKyriacos Orphanides, PQSYogeshkumar Patel, CECElvis Temali, CECBenjamin Thompson, PQSDavid Twiddy, PQSChun Zhen Zhu, CEC

CIQS – Prairies and NWTTofig Baghirov, CECBrent Campbell, CECShailesh Dholakia, PQSWesley Earle, CECDeclan Fitzpatrick, PQS

Gary Foucault, CECAlexander Halili, PQSChristian Hong, CECRamesh Khadka, CECMalik Lasker, CECAndrew Maxwell, PQSShrini Avula N, CECBradley Rawlinson, PQSAndrew Trifaux, CECImran Yousaf, CEC

CIQS – QuebecMartin Gagnon, CEC

10 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2016 To return to Table of Contents CLICK HERE

S TA F F P R O F I L E

On April 1, 2015, CIQS (national) assumed all membership matters. Sophia Chin You and Aliya Karim are the ‘go to’ staff for questions related to membership, payments, exams and general inquiries. Staff profiles on Sophia Chin You, Membership Coordinator and Aliya Karim, Administrative Assistant, highlight their areas of responsibilities and direct you on the appropriate CIQS staff member to contact with your questions.

SOPHIA CHIN YOUSophia joined the CIQS as the Membership Coordinator in March 2015. She is responsible for all aspects of Designation Holders’ memberships. She processes member applications, liaises with the Membership Committee on new applications and current members, fields any questions pertaining to the

current status of files, provides guidance to new applicants and current members through the steps to attain membership and ultimately their professional designation, processes and administers diary applications and submissions, and coordinates the PQS candidate interviews. If you have questions regarding TPE (Test of Professional Experience) pathways, academic credits, membership status, outstanding requirements for professional designation, or diary submissions, contact Sophia at membership@ciqs.org or 905-477-0008.

ALIYA KARIMAliya joined CIQS as the Administrative Assistant in February 2015. Her areas of responsibility are: processing membership renewals and reinstatements, coordinating all exam registrations (including payments and distribution of exam materials), publication and online orders, stamp and

seal orders, processing of all TPE (Test of Professional Experience) registrations and results, preparation of certificates and diplomas, and updating member profiles. Contact Aliya at assistant@ciqs.org with your questions related to membership renewal, exam registration, TPE registration, Diploma inquiries, publication orders and all other payment-related questions.

Do you have any membership questions?AN INSIGHT IN TO OUR MEMBERSHIP STAFF

Fall 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 11CLICK HERE to return to Table of Contents

INTRODUCTIONElectricity is energy produced by behavior of electrons and protons. Electrical energy or power is not actually or potentially supplied by nature; it has to be produced or generated by various secondary means, converting one form of energy into another. In the modern world, there is an unending need for energy to power electrical appliances, such as fans, lights, communication infrastructures, machines and computing systems, and other devices operated by electrical energy. Nowadays, power can be generated from several renewable and non-renewable energy sources, including fossil fuels, nuclear, geothermal, solar, wind, hydro, wood, biomass and more. All these energy sources have pros and cons, but renewable energy sources have comparatively less environmental impact; however, renewable sources, including hydro, solar and wind, also have certain advantages and disadvantages, which make the decision about how to produce the energy optimally even more difficult. Therefore, the in-depth examination of these three renewable power sources will provide an idea about which source works best and in what situations. Though it largely depends on availability of renewable sources in a particular region, the comparison of these sources will give a description about which source is best needed by energy system, when factors like climate, security of supply and environment are considered.

HYDRO vs. WIND vs. SOLAR POWER?A C O M P A R A T I V E A N A L Y S I S

“Renewable energy sources have comparatively less environmental impact.”

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HYDRO POWERHydro power is one of the ancient energy sources; it has been widely used for several hundred years. In ancient periods, energy was generated through water by building hydro wheels to run mills. With time and with technology, hydro power has developed vastly.

Modern age hydro power harnesses the energy of moving water to produce electricity. The electricity produced by hydro power refers to hydroelectricity. It is generated in a hydro power plant, which uses the gravitational force of falling water from higher altitudes or potential energy of water flow in rivers and tidal basins to drive turbine blades. The turbines are further conjugated with huge magnets of an electric generator that produce electricity by converting mechanical energy into electrical energy. The major driving force behind hydro power is dams and water reservoirs (acting like a large battery) that create a large supply of water, used to regulate the energy extraction when needed. The power generated as an output from an electric generator is proportional to the volume and speed of the water falling on turbines. In most countries, electricity needs and demands are moderately fulfilled by hydroelectric power generation. In 2006, nearly 20% of the global electricity consumption was fulfilled with hydro power, making it the most consumed renewable energy source in the world (Maehlum, 2014). It is, by far, the leading renewable source of

energy in most countries. As of 2011, over 160 countries were using hydro power capacity, with 11,000 hydro power stations having a total global installed capacity of approx. 936 GW. China is the leading hydro power generating country, followed by Canada, USA and Brazil (World Energy Sources: 2013 Survey, 2016).

PROS• Hydro power plants are utilized to

produce base-load electricity and balancing electricity, which can meet fluctuations in demand.

• Hydro electric generators can instantly switch on and off; therefore, they are one of the most responsive energy sources during varying energy demands, especially in peak seasons.

• A significant quality of hydro power is that it produces a great amount of electricity, without relying much on climatic conditions, air current flow, and complex start-up processes.

• Besides reliability and large power output, hydro power sources are flexible, because the water flow and electricity output are easily adjusted (Kadar, 2014).

• Operating costs and maintenance costs are typically low, as hydro plants are almost entirely automated and have no fuel requirement.

• Hydro power can provide start-up power, control frequency, and follow load, which assists in protecting

against system-wide failure that could lead to equipment damage (Hydroelectric Power, 2005).

• Also, they have low failure rates and long economic life, i.e., they can be operated for several years due to greater life cycle.

CONS• Despite certain advantages,

the main disadvantage of hydro power is that it is not appropriate for most locations, due to resource inadequacy.

• It has some environmental consequences. Though it causes no greenhouse emissions, damming of water and modifying water flow greatly affects the river ecosystems and has impingement on landscapes. They present migratory obstacles for underwater species, especially fish. In addition, during reservoir construction, there may be formation of carbon dioxide, causing different environmental impacts (Maehlum, Hydroelectric Energy Pros and Cons, 2014).

• Constructing a hydro power plant is expensive.

• The electricity generation from hydro sources depends on availability of water, so it may prove ineffective at times of drought.

• They operate only at high speeds and require sizeable modification of water resources.

Fig. 1 Hydroelectric power generation

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WIND POWERSince ancient times, wind has played a pivotal role as an energy source to drive steam engines. But wind generators for producing electricity were formulated in the 19th century to reduce dependence on hydrocarbons and other sources. Wind energy has been evolved as a major renewable source and is emerging at a rapid rate.

Wind power plants utilize the kinetic energy of flowing air to generate power mechanically. The energy of wind motion is harvested by turbine blades that activate an electrical generator. They have an in-built automated control system, but they require monitoring by manual procedures. The trend of generating electricity from flowing winds is quickly evolving in many countries, as it is one of the eco-friendliest sources of power generation. Wind energy sources constitute about 5% of the total electricity demands. There are typically two types of wind power generation: off-shore and on-shore. Wind power generation is one of the best alternatives to fossil fuels, because it provides environmentally and economically superior output. It is estimated that, by 2050, power generation from worldwide wind energy sources will have increased to 18% from around 3%. The current share of worldwide wind power capacity is around 430 GW, with China and US as the leading wind power producers, followed Germany, Spain and India.

PROS• Wind power is the eco-friendliest and

greenest energy source of electricity generation, as the energy produced is free from harmful gas emissions.

• They perform well in stormy weather conditions.

• The potential of generating power from wind energy sources is massive (over 400 TW); it is 20 times more than global demands (Maehlum, Wind Energy Pros and Cons, 2015).

• They typically have low maintenance and operational costs.

• Wind power sources are space efficient, as they do not require a large area for construction. The land where wind turbines are located can be used for other purposes.

• A highlighting advantage of wind power is that they have good potential for residential use, yielding energy savings and protecting

residents from power outages (Maehlum, Wind Energy Pros and Cons, 2015).

• Available in various sizes, they have low cost per watt hour and predictable power output (Edvard, 2010).

CONS• The biggest disadvantage of wind power

is that wind is sporadic throughout the year; therefore, it cannot meet constant energy demands.

• Initial installation and manufacturing investment is too high in cases of industrial setup and domestic setup.

• It is subjected to generation volatility and unusual behavior in case of frequency deviation (Kadar, 2014).

• Wind power generators create sound pollution as wind turbines are noisy, while operating.

• It may somewhat impose threat to wildlife. Flying creatures, such as bats, birds etc. near wind turbines are in great danger.

Fig. 2 Wind power generation

“It is estimated that, by 2050, power generation from worldwide wind energy sources will have increased to 18% from around 3%.”

Global Wind Power Cumulative Capacity (Data: GWEC)

Year

1996

6.1 7.6 10.2 13.6 17.4 23.9 31.1 39.447.6

59.174.0

93.9

120.7

159.0

197.9

239.1

282.8

319.5

369.7

432.4

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Cum

ulat

ive

Cap

acit

y (G

igaw

atts

)

450

400

350

300

250

200

150

100

50

0

14 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2016 To return to Table of Contents CLICK HERE

SOLAR POWERElectrical energy generation from solar (sun’s) radiation is a comparatively new idea, rapidly booming in the electricity market. Sun is a colossal source of energy. The energy from the sun could be harnessed using solar (photo-voltaic) cells to convert it into electrical energy. When sunlight composing small particles strikes on photo-voltaic cells, the cells absorb energy. This creates an electrical imbalance in the cell, and particles move faster, creating electricity (Dreier).

The two technologies include photovoltaic systems that directly convert sunlight into electricity and concentrated solar power (CSP) that uses the sun’s energy to make steam, which drives turbines to produce electricity. Photo-voltaic technology is widely used, with approx. 98% of installed capacity, whereas CSP share is about 2%. By 2013, the total worldwide installed capacity of solar power was around 142 GW, with Germany being the highest solar power producer, followed by EU, China, US, and Japan (Sawin, 2014). It is estimated to supply approx. 1% of the total electricity consumption, but it is a rapidly growing alternative energy source and is expected to reach 3.5% by 2025 (Solar Generation, 2006).

PROS• It is the most environmentally friendly

source of generation, as it produces no harmful gas emissions or pollution, and poses no threat to wildlife.

• Solar power sources can be used virtually anywhere, as they can harness electricity

in remote locations, not connected to an electrical grid (Bratley, 2010).

• They are the quietest source of electricity generation.

• Maintenance and infrastructure are cost-effective, as they do not require high wiring costs.

• Solar power plants are space efficient, because they are generally installed on roof-tops, so they eliminate the need for a large space.

• They have long-use life, and they are not manually monitored.

• Photovoltaic technology has low material consumption, smooth appearance, simple installation, and unobtrusive operation.

CONS• The biggest disadvantage of solar

power generation is high initial installation cost. Solar cells are expensive, making it costly to generate power from solar energy.

• Output and efficiency vary in different regions, depending on climatic factors.

• Daylight hours are limited; therefore, solar photo-voltaic cells are constrained by intermittency issues (Solar Power).

• The mechanical resistance of cells is weak.

CONCLUSIONIt has been deduced that no single renewable energy source works supremely at all times and in every situation. All these renewable energy sources

have certain environmental impacts. Wind power and solar power are rapidly growing technologies and, in the future, the electricity generation from these sources is likely to increase rapidly. Each power source has specific advantages and disadvantages; hence, they must be used in combination to cover for their drawbacks.

About the AuthorSharib Maradukhel M.Sc., B.Eng., PQS, CET is a Senior Cost Consultant at Altus

Group. With over eight years of industry experience Sharib has been involved in a variety of major projects in Canada and USA. His project experience includes academic, arts & culture, commercial, healthcare, industrial, institutional, mining, research/laboratory, residential and community housing, utility and transportation. Sharib’s expertise is providing electrical estimates/budgets from conceptual to pre-tender stages using architectural sketches and design briefs to finished engineering drawings and specifications, value engineering, life cycle costing and analysis of change. He is a member of the Canadian Institute of Quantity Surveyors (CIQS) and the Ontario Association of Certified Engineering Technicians and Technologists (OACETT). Sharib is also an associate member of the Chartered Institute of Building (CIOB).

Fig. 3 Solar power generation

SolarReceiver

Heat(Steam) Electricity

TurbineConcentratingMirror Field

ConcentratedSolar Radiation

IncidentSolar

Radiation

Fall 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 15CLICK HERE to return to Table of Contents

July 21–26, 2017 | Westin Bayshore

Save the Date!

Join us as a

delegate, sponsor

or exhibitor at

this exciting

conference.

FEATURING

Register before March 1, 2017 and save!

Space is limited, so register today!

PAQS2017.COM

David SuzukiSarika Cullis-Suzuki

Michael Green

Terry Small

and more!

The week’s activities include:

Sightseeing & social outings

Musical entertainment

Evening socials & parties

A cocktail/gala dinner night

along with speeches & workshops

with the industry’s best from

around the world

What is the PAQS Congress?

About PAQS 2017

Delegate Packages

Visit PAQS2017.com to learn more.

PROUDLY SUPPORTED BY

PRESENTED BY

Sponsorships

PAQS (the Pacific Association of Quantity Surveyors) comprises thousands of professionals from Canada, Australia, China, Japan, New Zealand, Malaysia, Hong Kong and many other countries.

Since 1995, quantity surveyors from around the world meet every year to share ideas, explore emerging markets and technologies, and push the frontiers of the construction industry.

The 2017 Congress has been expanded to include lenders, developers, consultants and contractors. Attendance is expected to be double that of previous congresses! Don’t miss out.

The 2017 Congress will be held for the first time ever in Vancouver—a truly global destination and a hub of green development. The focus will be on sustainable construction practices in the context of global environmental responsibility.

There are perhaps no two people better suited to speak to this than our keynote speaker David Suzuki and his daughter Sarika Cullis-Suzuki. Along with our panel of industry experts, celebrity guests and entertainment, this is an event not to be missed!

If you are a construction professional of any discipline, or just want to learn more about what’s on the horizon for the fastest growing construction industry in North America, mark these dates in your calendar.

Delegate registration will commence soon. Discounts apply for PAQS members.

Sponsorship opportunities are available. This is a unique opportunity to showcase your company’s products or services to a national and international audience with close ties to thousands of major building projects.

TM

July 21–26, 2017 | Westin Bayshore

Save the Date!

Join us as a

delegate, sponsor

or exhibitor at

this exciting

conference.

FEATURING

Register before March 1, 2017 and save!

Space is limited, so register today!

PAQS2017.COM

David SuzukiSarika Cullis-Suzuki

Michael Green

Terry Small

and more!

The week’s activities include:

Sightseeing & social outings

Musical entertainment

Evening socials & parties

A cocktail/gala dinner night

along with speeches & workshops

with the industry’s best from

around the world

What is the PAQS Congress?

About PAQS 2017

Delegate Packages

Visit PAQS2017.com to learn more.

PROUDLY SUPPORTED BY

PRESENTED BY

Sponsorships

PAQS (the Pacific Association of Quantity Surveyors) comprises thousands of professionals from Canada, Australia, China, Japan, New Zealand, Malaysia, Hong Kong and many other countries.

Since 1995, quantity surveyors from around the world meet every year to share ideas, explore emerging markets and technologies, and push the frontiers of the construction industry.

The 2017 Congress has been expanded to include lenders, developers, consultants and contractors. Attendance is expected to be double that of previous congresses! Don’t miss out.

The 2017 Congress will be held for the first time ever in Vancouver—a truly global destination and a hub of green development. The focus will be on sustainable construction practices in the context of global environmental responsibility.

There are perhaps no two people better suited to speak to this than our keynote speaker David Suzuki and his daughter Sarika Cullis-Suzuki. Along with our panel of industry experts, celebrity guests and entertainment, this is an event not to be missed!

If you are a construction professional of any discipline, or just want to learn more about what’s on the horizon for the fastest growing construction industry in North America, mark these dates in your calendar.

Delegate registration will commence soon. Discounts apply for PAQS members.

Sponsorship opportunities are available. This is a unique opportunity to showcase your company’s products or services to a national and international audience with close ties to thousands of major building projects.

TM

The Pacific Association of Quantity Surveyors (PAQS) established the PAQS - Iwata Foundation in 2008 for the purpose of promoting

the QS profession and the professional development of young quantity surveyors in the PAQS region. Therefore, the Foundation is now sponsoring an international essay competition for young members from PAQS member countries.

The competition winner will receive travel fares, three nights’ accommodation and full registration for their attendance at the next PAQS Annual Congress which will be held from July 23-25, 2017 in Vancouver, Canada.

Entries for the competition are now being accepted and will close on Friday, April 6, 2017. Properly completed essays should be emailed to the PAQS Secretariat at secretariat@rism.org.my.

Entries will be judged by a PAQS-Iwata Foundation panel who will announce the result by May 15, 2017. The panel’s decision is final.

The topic for the essay competition for 2017 is: “Green development – The new era”

NOTE:

The PAQS - Iwata Foundation has been named in honour of Mr Toshiyuki Iwata (1914 – 2014) who although in his eighties, attended the PAQS Annual Congresses in the very early days of the association. He attended a few congresses well into his nineties. During the 13th PAQS Kuala Lumpur congress in 2009, he gave a televised congratulatory message to the 2009 PAQS-Iwata Foundation essay winner.

CONDITIONS OF ENTRY:

1. Entrants must be 40 years of age or younger and be a member of their national QS/Cost Engineering institute (all grades of members are eligible).

2. The essay must have a cover sheet showing the entrant’s name, residential address, email address and the member institute/association to which they belong.

3. The length of the essay is to be between 1,000 and 1,500 words and essays must be typed in accordance with the below rules.

4. All competition entrants agree to give the PAQS copyright for their essays.

5. Any plagiarism by an entrant will result in disqualification of the entry.

6. Entrants agree that if they win the competition that they will attend the PAQS Congress (and present their paper if invited to do so by the Congress committee).

7. The award is not transferable and not convertible to cash.

8. The winner agrees to write and submit a one (1) page report on their attendance at the PAQS Congress to the PAQS Secretary within four weeks of attending the Congress – this report may be published in the PAQS Newsletter and member journals/newsletters.

9. The winning essay may also be submitted to the ICEC for entry in the K Humphreys Awards.

10. Entries must be emailed to the PAQS Secretariat at secretariat@rism.org.my by the closing date.

11. PAQS member institutes will be asked to translate essays into English where they have been submitted in another language.

RULES FOR ESSAY WRITING AND SUBMISSION - entries are to be:

1. Typed in a MS Word compatible program

2. With type font being Arial size 11

3. Lines are to be double spaced

4. Headings are to be Arial size 16, centred and bold

5. Sub headings are to be Arial size 12, left indented and bold

6. Footnotes and referencing is to be in accordance with the Harvard system eg: Smith, T. and Tang, H. (2006). The rise of globalisation in the QS profession. Australasian Journal of Quantity Surveying Vol 4 Issue 2, pp 34-36.

The PAQS–Iwata Foundation

2017 Travelling Scholarship CompetitionBy Ian Duncan, PQS(F)

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:

u YouTube www.youtube.com/watch?v=pnKhchdWyCo

u Facebook www.facebook.com/canadianinstituteofquantitysurveyors/

u Twitter twitter.com/CIQS _ Official/

u LinkedIn www.linkedin.com/company/

ciqs---canadian-institute-of-quantity-surveyors

As part of our marketing plan, we recently launched the first videos of a new series to be released over the coming months.

See why the Professional Quantity

Surveyor (PQS) and Construction Estimator

Certified (CEC) are key members of the

project team.

Help us spread the word In order to increase awareness of our profession, we encourage all of you to spread the word. Please LIKE, COMMENT and SHARE with your industry colleagues and friends!

More great videos are coming soon. Make sure to SUBSCRIBE to be notified when new videos come out!

New CIQS video series

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).

We offer competitive salaries, benefits, training and potential for growth. Relocation assistance will be provided.We sincerely thank all applicants, but only those candidates which meet our requirements will be contacted.

Fax: 514-846-8913 | Phone: 514-846-8914 | E-Mail: MONTREAL@LCOGROUP.COM

Please send resume in strictest confidence to: LCO - Construction and Management Consultants Inc.

QUANTITY SURVEYORS, ESTIMATORS, PLANNERS

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Tell us a little about your career?Guillaume Robitaille (GR): Eighteen years ago, in order to assist my uncle, I quit my job as a fire fighter in the town of Repentigny and became the water supply foreman on a construction project. From then on, I was hooked. I spent every day on construction sites, gradually improving my skills in order to advance through the ranks, first as a project manager, then on to construction director.

In addition to being a quantity surveyor, I gained extensive experience and knowledge in the field of construction, always seeking more efficient ways of working. I am passionate about learning and am always looking to extend my knowledge base. I continued my academic education in evenings and on weekends.

Since 2007, I have collected a Certificate in Administration, a professional studies diploma in Construction Company Management, a Certificate in Economics and Construction Project Estimating, a Construction Management Certificate and a Sustainable Buildings Certificate. Presently, I am studying to obtaining a Building Systems Certificate and a Certificate in Real Estate Evaluation and Management.

“I am passionate about learning and am always looking to extend my knowledge base…”

How do you see the role of QS’s evolving?GR: Technologies used on construction sites and in offices are evolving faster than ever. Values have changed, and collaborative work has become much more commonplace. The best example is without doubt the introduction of BIM (Building Information Modelling), which allows all phases of a given building’s construction to be coordinated.

When used with collaborative work methods, the interoperability of different applications and software are said to provide a return on investment in the range of 300 to 500% (McGraw Hill, 2009) on each project. The latest trend is towards multi-service firms that offer all services under the same roof, such as project management, cost consulting, building codes and standards, estimating, real estate evaluation and due diligence inspection.

As quantity surveyors, we need to be concerned about staff replacement. We tend to forget that the financial and strategic acumen that quantity surveyors offer serves to make many of them excellent managers. Maintaining a competitive construction market in Québec demands that we acknowledge and promote the importance of both appropriate training programs for new quantity surveyors and the transfer of knowledge by means of continuing professional development.

Parlez nous un peu de votre carrière?Guillaume Robitaille (GR) : Il y a dix-huit ans, pour prêter main-forte à mon oncle, j’ai quitté mon emploi de pompier à la Ville de Repentigny pour devenir contremaître aqueduc sur un projet de construction. De là, j’ai eu la piqûre. Je passais mes journées sur les chantiers à évoluer professionnellement en tenant le poste de gérant de projets, puis de directeur de construction.

«Je suis passionné par les études et je recherche toujours de nouvelles connaissances»

Ainsi, depuis 2007, je cumule plusieurs certifications : certificat en administration, diplôme d’études professionnelles en Gestion d’entreprise de construction, Certificat en économie et estimation de projets de construction, Certificat en gestion de la construction, Certificat en bâtiments durables. Je poursuis actuellement mes études en vue d’obtenir un Certificat en mécanique du bâtiment et un Certificat en évaluation et gestion immobilière.

Comment voyez-vous le rôle des ÉCA?GR : Les technologies utilisées sur les chantiers de construction et dans les bureaux ne sont plus les mêmes. Les valeurs changent, le travail collaboratif est en pleine expansion. Le meilleur exemple est sans nul doute l’avènement du BIM (Building Information Modeling) qui permet de coordonner toutes les phases de la construction d’un édifice donné. L’interopérabilité des différentes applications, logiciels, mises en commun avec le travail collaboratif permet un retour sur investissement de 300 à 500% (McGraw Hill, 2009) sur chaque projet.

La nouvelle tendance est aux cabinets multiservices qui offrent tous les services sous un même toit, que ce soit gestion de projets, consultation de coûts, codes et normes du bâtiment, estimation, évaluation immobilière et inspection diligente.

Comme économistes nous devons nous soucier également de la relève. Le transfert de la connaissance et la formation de nouveaux économistes est un enjeu majeur

afin que le marché de la construction demeure compétitif. On oublie souvent que les économistes sont d’excellents

gestionnaires puisqu’ils connaissent bien les coûts des projets.

About the authorGuillaume Robitaille, PQS is the founder and president of the new Québec Affiliate of

the Canadian Institute of Quantity Surveyors.

A propos de l’auteurGuillaume Robitaille, PQS, économiste en construction, Fondateur et président du

nouveau chapitre du Québec de l’institut canadien des économistes.

Affiliate Leadership Profile Québec

Fall 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 21CLICK HERE to return to Table of Contents

Introduction

The scope of this paper is to review and compare domestic and international standard form construction contracts (SFCC) with respect to subsurface conditions,

to understand how risk is usually allocated, if the allocation is fair, and how risk should be allocated. Subsurface conditions are often thought of as, or associated with, the geological state of the ground below the earth’s surface. In the context of SFCCs, as is further evidenced by the interrelated structuring and classification of same, subsurface conditions are not necessarily limited to the preceding definition, and may include other subsurface conditions located below (or behind) the surface of existing structures, and are included as a subsection of concealed, unknown, or otherwise unforeseeable conditions. Notwithstanding that the latter definition is ostensibly broader than that related to geology, subsurface conditions within the framework of this paper will include other matters which are otherwise located below (or behind) the surface of existing structures; collectively referred to as the ‘Subsurface Conditions.’ A central theme amongst Subsurface Conditions is the general uncertainty with respect to the state of the Subsurface Conditions prior to the commencement of the work on a construction project, and the general propensity of the primary parties of a construction contract (the Owner, the Architect, and the Contractor) to attempt to allocate the associated risks to the other parties.

“[W]e know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.”

- Donald Rumsfeld, February 12, 2002

Standard form construction contracts, domestic and internationalThe Canadian Construction Document Committee (CCDC)1, and the International Federation of Consulting Engineers (FIDIC)2, are the most widely recognized industry Organizations with respect to the production and use of SFCCs in Canada, and Internationally (located in 34 countries). The two SFCCs produced by the foregoing organizations referenced in this paper are as follows;

1. CCDC 2 – 2008 Stipulated Price Contract (CCDC 2); and2. FIDIC Conditions of Contract for Construction for Building

and Engineering Works Designed by the Employer (FIDIC Contract).

Standard Form Construction Contracts in CanadaThe CCDC 2 is an SFCC between the Owner, and the Contractor that establishes a fixed price for the work associated with a construction project (pre-determined scope of work and construction schedule), irrespective of the Contractor’s actual cost of construction.

The CCDC 2 is organized into an Agreement between Owner and Contractor, Definitions, and General Conditions of the Stipulated Price Contract (12 Parts). Part 6 Changes in the Work, GC 6.4 Concealed or Unknown Conditions, 6.4.1 states;

“If the Owner or the Contractor discover conditions at the Place of the Work which are: 1] subsurface or otherwise concealed physical conditions

which existed before the commencement of the Work which differ materially from those indicated in the Contract Documents; or

2] physical conditions, other than conditions due to weather, that are of a nature which differ materially from those ordinarily found to exist”

CCDC 2 allocates the risk of Subsurface Conditions to the Owner (subject to the Subsurface Conditions not having been identified in the Contract Documents, therefore forming part of the Work). Part 6 Changes in the Work, GC 6.4 Concealed or Unknown Conditions, 6.4.2 states;

“The Consultant will promptly investigate such conditions and make a finding. If the finding is that the conditions differ materially and this would cause an increase or decrease in the Contractor’s cost or time to perform the Work...will issue appropriate instructions for a change in the Work...”

The Ontario Superior Court of Justice dealt with the issue of Subsurface Conditions in Inscan Contractors (Ontario) Inc. v. the Halton District School Board and Decommissioning Consulting Services Ltd. (Inscan v. Halton).4 Ultimately, the Court held that Concealed Conditions were the responsibility of the Halton District School Board (the Owner); however, the court applied an inherent onus on Inscan Contractors (Ontario) Inc. (the Contractor) to have been proactive in its discovery of Subsurface Conditions, as indicated below;

Subsurface conditions and risk allocation

22 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2016 To return to Table of Contents CLICK HERE

[94] The plaintiff has demonstrated satisfaction of these conditions on a balance of probabilities. I will address each in turn.

[95] Before doing so, I should address the defendants’ argument that the plaintiff had a duty to investigate the site by virtue of the provisions of section 5 of the instructions to tenderers included in the Contract Documentation, that it failed to do so and that, therefore, the risk of the concealed condition falls upon the plaintiff rather than the defendant. I agree with the defendant to the extent that the plaintiff cannot assert a claim if it could reasonably have undertaken an investigation which would have revealed the condition and failed to do so (underscored for emphasis)5 or was presented with information from which it ought reasonably to have understood that an unusual condition existed at Lord Elgin. However, the defendant has failed to demonstrate either of these circumstances.

CountryCommon forms of contract for large projects

Common forms for international projects

Common forms for engineering contracts

Brazil Bespoke contracts common, especially for large projects. Standard form contracts, especially FIDIC contracts more popular in recent years due to the influence of international players, multilateral investment agencies and promotion by FIDIC. The Red Book and Silver Book contracts are particularly common.

FIDIC contracts common.

Same contracts apply as for construction projects.

Canada Local standard forms published by the Canadian Construction Documents Committee (CCDC), Canadian Construction Association (CCA), Royal Architectural Institute of Canada (RAIC), and both local and national governments and authorities.

Bespoke and FIDIC contracts common. Local Canadian forms available but rarely used.

Local standard forms developed by the RAIC, Association of Consulting Engineers of Canada and other provincial and architectural associations.

Germany Bespoke contracts. Local contracts containing standard terms and conditions (STC), whose content is governed by the Civil Code (BGB). Parts of the General Contract Provisions for the Performance of Construction Works (VOB) are usually included.

FIDIC contracts common.

FIDIC contracts common. Engineering contracts have more content than traditional construction contracts so the VOB are generally not agreed on, and build, operate, transfer (BOT) models are becoming more popular.

Russian Federation

FIDIC contracts common, with significant modifications for mandatory local law.

FIDIC contracts common.Other various international standard form contracts sometimes used.

Same contracts apply as for construction projects.

United States

Local standard forms used, published by the American Institute of Architects (AIA), Engineers Joint Contract Documents Committee (EJCDC) and Associated General Contractors (AGC). Bespoke contracts commonly used for large projects.

FIDIC contracts common.

Local engineering, procurement and construction (EPC) form of contract used for a design and build (D&B) projects. EJCDC contracts used for non-D&B projects.

Chart No. 1 provides an overview of some of the types of standard form construction contracts which are utilized throughout the world, including the two listed above. Chart No. 1: International Standard Forms of Construction and Engineering Contracts3

[93] [I] am satisfied that the provisions of section 6.4.1 apply to the present matter. In order to be triggered, section 6.4.1 requires satisfaction of the following:1. the condition must be substantially different from

that detailed in the Contract;2. the condition must be substantially different from

that described or observed during the pre-tender site investigation;

3. the condition must differ significantly from those conditions ordinarily found to exist on asbestos abatement projects;

4. the condition must differ substantially from that which could have reasonably been determined to exist or inferred from available information; and

5. the plaintiff shall have notified the Board or DCS prior to disturbing the condition and in no event later than five working days after the first observance of the condition.

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[96] [T]he defendant was unable to identify an investigation that the plaintiff could reasonably have undertaken that would have revealed the condition...Had he observed the residue, the only reasonable investigation he could have undertaken would have been to ask DCS about the residue. The only answer DCS could have given, based on its understanding from the results of the McGowan test removal, was that it was easily removable...

[97] Similarly, it is unreasonable to suggest, as defendants’ counsel urged on the Court, that the plaintiff should have investigated by asking the other prospective bidders at the pre-tender meeting, who were its competitors in the market generally as well as for the Project, whether they had any experience with this residue.

[98] It is also unreasonable to expect that each bidder would have conducted its own test removal at one or more other areas during or after the meeting prior to submitting a tender rather than rely on a competent environmental consultant, who had supervised a test removal for this very purpose, to advise it of any unusual conditions.

[99] The evidence of the other contractors was that they had never seen an enclosure at a pre-tender site meeting relocated at the request of a prospective bidder...It is also of some significance that none of the other prospective bidders felt the need to conduct their own test removal, although this should be given less weight, because most of the bidders may have been satisfied that they knew the site conditions from previous experience.

[100] [T]here was no information available to the plaintiff from which it might reasonably have concluded there was a problem condition...The only possible information was the package of photographs handed out at the pre-tender meeting...These photographs convey no information with respect to the degree of difficulty of removal of the residue. In any event, as mentioned above, while the fact of the test removal might well prompt questions of prospective bidders, in the circumstances of the present action, the answers to those questions would not have alerted the plaintiff to any unusual difficulty associated with the residue.

[101] Turning to the five provisions of section 6.4.1, the plaintiff has demonstrated that the underlying conditions for asbestos removal were substantially different from those detailed in the Contract. The presence of the residue was not set out in the Contract Documentation and, accordingly, the difficulty of removal was also not addressed...The evidence of the other contractors satisfies me that the contractual documentation customarily used in the industry does not address this rare possibility.

[102] [A]s set out above, the defendants have not satisfied the Court that the enclosure at the pre-tender meeting was set up under the McGowan test removal site...It was therefore unreasonable to conclude that if Kelly had seen it the plaintiff would have understood that the residue presented a difficulty in removal. DCS also made

no mention of the difficulty of removal at the meeting. On this basis, the condition was substantially different from those described and observed at the pre-tender site meeting.

[103] [A]s mentioned, the evidence demonstrates that the problem residue was rarely found outside Lord Elgin, and at that location it was found only in the original section of the school...

[104] [A]s set out above, there was also no other information available to the plaintiff from which the presence of this residue could reasonably have been determined to exist or inferred. It did not have access to any reports or previous environmental consultants to the Board or to the exposure sheet or any report relating to the test removal site...

In a strictly literal interpretation of CCDC 2, coupled with the Court’s decision in Inscan v. Halton, the risk of Subsurface Conditions is allocated to the Owner, not the Contractor; however, if a claim for Subsurface Conditions should be asserted by the Contractor, it should be in a position to justify, and substantiate how the Subsurface Conditions differ materially from those indicated in the Contract Documents, or physical conditions differ materially from those ordinarily found to exist and generally recognized as inherent in construction activities of the character provided for in the Contract Documents (CCDC 2). In addition, the condition must be substantially different from that observed during the pre-tender site investigation, and the condition must differ substantially from that which could have reasonably been determined to exist or be inferred from available information (Inscan v. Halton), failing which, a court may determine that the Contractor is responsible for Subsurface Conditions, with all that that entails.

Standard Form Construction Contracts in international countriesThe FIDIC Contract is an SFCC (General Conditions only; the Agreement Between the Owner and the Contractor is a separate document, which forms part of the Contract Agreement) between the Owner, and the Contractor that establishes a Bill of Quantities (unit price) for the work associated with a construction project (having a pre-determined scope of work, not quantities, and predetermined construction schedule). The FIDIC is organized into 20 Clauses. Clause 4, 4.12 Unforeseeable Physical Conditions, states;

“In this Sub-Clause, “physical conditions” means natural physical conditions and manmade and other physical obstructions and pollutants, which the Contractor encounters at the Site when executing the Works, including sub-surface and hydrological conditions but excluding climatic conditions.If the Contractor encounters adverse physical conditions which he considers to have been Unforeseeable, the Contractor shall give notice to the Engineer...This notice shall describe the physical conditions... and shall set out the reasons why the Contractor considers them to be Unforeseeable.

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The Contractor shall continue executing the Works...shall comply with any instructions which the Engineer may give. If an instruction constitutes a Variation, Clause 13 [Variations and Adjustments] shall apply.”

The FIDIC Contract allocates the risk of Subsurface Conditions to the Owner (subject to the Subsurface Conditions being “unforeseeable”, therefore, forming part of the Work). Clause 4, 4.12 Unforeseeable Physical Conditions, further states;

“If and to the extent that the Contractor encounters physical conditions which are Unforeseeable, gives such a notice, and suffers delay and/or incurs Cost due to these conditions, the Contractor shall be entitled subject to notice under Sub-Clause 20.1[Contractor’s Claims] to:(a) an extension of time for any such delay, if completion is or

will be delayed, under Sub-Clause 8.4 [Extension of Time for Completion], and

(b) payment of any such Cost, which shall be included in the Contract Price. Upon receiving such notice and inspecting and/or investigating these physical conditions, the Engineer shall proceed in accordance with Sub-Clause 3.5 [Determinations] to agree or determine (i) whether and (if so) to what extent these physical conditions were Unforeseeable, and (ii) the matters described in subparagraphs (a) and (b) above related to this extent.

Unlike CCDC 2, the FIDIC Contract places a stringent burden of proof on the Contractor as to why the Subsurface Conditions were unforeseeable, as opposed to unknown, or concealed. In addition, the FIDIC Contract contains a mechanism which would permit the re-evaluation of other parts of the work to determine if they were conceivably “more favourable” than what could have been reasonably foreseen. This would be required prior to any final valuation of costs, and could be used as a means of off-setting the unforeseeable costs (but not resulting in a net credit) with those which were determined to be more favourable. Clause 4, 4.12 Unforeseeable Physical Conditions, further states;

“However, before additional Cost is finally agreed or determined under sub-paragraph (ii), the Engineer may also review whether other physical conditions in similar parts of the Works (if any) were more favourable than could reasonably have been foreseen when the Contractor submitted the Tender. If and to the extent that these more favourable conditions were encountered, the Engineer may proceed in accordance with Sub-Clause 3.5 [Determinations ] to agree or determine the reductions in Cost which were due to these conditions, which may be included (as deductions) in the Contract Price and Payment Certificates. However, the net effect of all adjustments under sub-paragraph (b) and all these reductions, for all the physical conditions encountered in similar parts of the Works, shall not result in a net reduction in the Contract Price. The Engineer shall take account of any evidence of the physical conditions foreseen by the Contractor when submitting the Tender, which shall be made available by the Contractor, but shall not be bound by the Contractor’s interpretation of any such evidence.”

Unlike CCDC 2, in the FIDIC Contract, the risk of Subsurface Conditions is not inherently allocated to the Owner; there is a test which the Contractor must satisfy with respect to transferring the risk to the Owner, part of which is to prove that the Subsurface Conditions were not foreseeable. This remains with the Contractor in advancing its claim, and is subject to further review by the Engineer.

Allocation of risk, for better, or worseIn the Canadian model (CCDC 2) the allocation of risk related to Subsurface Conditions is borne by the Owners; however, in the International model (as highlighted in-part in Chart No.1), the Contractor bears the initial risks, with an opportunity (and the onus) of transferring it to the Owner. The FIDIC Contract creates a notion that should one part of the Work become more difficult (costly) as a result of Subsurface Conditions, than other parts of the Work related to Subsurface Conditions which may have been easier (less costly), could become subject to a cost adjustment (credit). In theory, this approach seems reasonable enough; however, in practice, this approach has the potential to upset one of the fundamental characteristics of competitive bidding: calculated risk (one that the Contractor bears). Contractors may take certain calculated risks in responding to tenders based on their previous experiences, regional knowledge, and other environmental (built and non-built) conditions. If Contractors should become concerned that “easier” parts of Subsurface Conditions may result in credits, how will this affect the initial bid amount? It is fair to assume that this practice may result in an increase to the cost of the bid for the Contractor (as risk is increased, i.e. potential credits), and a decrease in value to the Owner. As a result, the risk/reward ratio may determine that fewer construction projects are viable, leading to fewer bids to any particular tender, leading to an overall increase in construction costs.

ConclusionIt is frequently said that the allocation of risk should be to the party which is best equipped to manage it. This may be true in a number of circumstances; however, the allocation of risks associated with Subsurface Conditions should not apply so freely to this general rule, as there is often an opportunity to eliminate the risk, prior to a requirement to manage it. Construction projects are often developed over several years, and in-turn, are frequently tendered over a period of several weeks. It would be unreasonable to suggest that a Contractor would be able to familiarize itself with a construction project to the same extent that an Owner may, given the significantly reduced timelines, and often restricted or limited access to potential Subsurface Conditions,6 as the Owner would have been afforded. For this reason, the onus should remain with the Owner to ensure that all material information is made available to Contractors so as to allow them to provide complete, competitive and transparent bids. Should the Owner elect not to address potential Subsurface Conditions proactively, in an up-front and transparent manner,

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SFCCs should provide for equitable adjustments in the value and time of the construction contract, as required. It would be remiss not to draw attention to the fact that SFCCs are more often than not significantly altered through supplementary conditions; therefore, the allocation of risk associated with Subsurface Conditions will be borne by the party willing to accept it, for better, or for worse. End notes:1 The Canadian Construction Documents Committee (CCDC)

develops, produces, and reviews standard construction contracts, forms and guides. It is a national joint committee, formed in 1974, and includes representation from across the Canadian construction industry. The committee includes two construction owner representatives from each of the public and private sectors, as well as representatives from four national organizations. All CCDC Documents are endorsed by these national organizations: Association of Consulting Engineering Companies – Canada (ACEC); Canadian Construction Association (CCA); Construction Specifications Canada (CSC); and Royal Architectural Institute of Canada (Architecture Canada). CCDC representation also includes a lawyer from the Canadian Bar Association (Construction Law Section), who sits as an ex-officio member.

2 FIDIC is the International Federation of Consulting Engineers. Its members are national associations of consulting engineers. Founded in 1913, FIDIC is charged with promoting and implementing the consulting engineering industry’s strategic goals on behalf of its Member Associations and to disseminate information and resources of interest to its members. Today, FIDIC membership

covers 97 countries of the world. FIDIC, in the furtherance of its goals, publishes international standard forms of contracts for works and for clients, consultants, sub-consultants, joint ventures and representatives, together with related materials such as standard pre-qualification forms.

3 PLC Cross-Border Construction and Projects Handbook 2010/11 (Update)

4 Inscan Contractors (Ontario) Inc. v. Halton District School Board, 2005 CanLII 8728 (ON SC)

5 “cannot assert a claim if it could reasonably have undertaken an investigation which would have revealed the condition and failed to do so”

This is interesting and important, as the Court suggests that if a reasonable investigation could have been undertaken, perhaps the risk of the Subsurface Conditions would have been that of the Contractor, not the Owner. This obviously begs the question as to what constitutes a reasonable investigation, and could it have been undertaken at the time of tender.

6 This is particularly true with respect to Design-Bid-Build construction projects, whereas, a Contractor would not be permitted to perform bore tests, or remove portions of existing building components during the tender period to satisfy themselves with the Subsurface Conditions.

About the authorArran Brannigan, LL.M., MBA, PQS, is a senior construction executive whose principal focus has been on General Contracting in the Industrial, Commercial and Institutional sectors

of the Canadian Construction Industry.

“...the onus should remain with the Owner to ensure that all material information is made available to Contractors so as to allow them to

provide complete, competitive and transparent bids.”

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Aspiring Professionals Corner

s far as I can recall, I always wanted to work in the construction world. I began my studies at the Claude

Bernard Lyon I University in France, where I graduated with a Licence, a Master Degree and a post-master in Mechanics, to finally obtain an Advanced Studies Diploma in Thermal and Energy. I started my professional career in design and construction of ventilation and air conditioning systems in Morocco, my birth country.

While studying in Lyon, I became interested in moving to Québec, Canada, an opportunity that many students in France were offered. I took the opportunity in 1999 without hesitation. Upon my arrival in Montréal, I applied for an internship as cost estimator with an HVAC contractor. Unfortunately, when the internship was completed, the province’s economic situation was not conducive to finding a permanent position in construction, so I decided to go back to school and acquire further qualifications – I was told this was the best way to penetrate Québec’s job market. I completed a degree in Building Estimating Technology at the Grasset Institute in 2006.

I had my first real Canadian experi-ences working for companies which specialized in post-disaster renovation and related markets automated regulation.

There I discovered my passion for worksites and management. Although the nature of the work was highly interesting, I soon realized that the routine was far from my liking. I decided to go to work for a general contractor in the institutional sector where I was hired as Estimator and Project Manager. It was at that moment that my Program Manager from my days at the Grasset Institute contacted me to refer me for a position at Macogep.

Coincidentally, a major crisis exploded in Quebec’s construction industry leading to the creation of a Public Hearing Commission to look into the many allegations of corruption. This compelled me to accept the challenge and apply for the position at Macogep, a project management firm, especially as I knew that it had always positioned itself as completely independent from architects, engineering and construction companies. Two years later, I was promoted to Chief Estimator, Mechanics/Electricity. Today, I supervise the personnel in charge of preparing cost estimates in heating, ventilation, air conditioning, process mechanics and electricity.

My passion is to use my knowledge and skills to improve innovative projects which I can follow at each and every step, from planning to commissioning. Amongst those many challenges, I can mention:

ASPIRING PROFESSIONAL QUANTITY SURVEYOR

MOHAMMED FARES, BEPD, MEPD, CECChief Quantity Surveyor, Mechanics/Electricity, Macogep Inc.

A

I had my first real Canadian experiences working for companies specialized in post-disaster renovation and related markets automated regulation, where I discovered my passion for worksites and management.

implementation of a biomethanization system at a wastewater treatment plant; redevelopment of life units at a residential and long-term care centre; and construction of a sports complex aiming for LEED Gold certification. My experience with Macogep and its multidisciplinary team led me to discover a profound interest in construction management and I recently had the privilege to actively participate in the construction of a brand new plant in Quebec City for Olympus NDT Canada (a manufacturer of test, measurement and imaging instruments).

Whether in project management or construction management, I firmly believe that cost control is mandatory – and so does Macogep, as the firm highly values the PQS certification – its team counts four PQS and five CEC professionals. I am thrilled to think that once I get my certification, I will be able to use my skills in the cost estimating field all over Canada, while at the same time helping Macogep to win challenging new projects. My new PQS title will not only be a personal achievement, but will be shared with the team.

I wish to thank the Construction Economist, for giving me the opportunity to write this article. It was a real pleasure sharing with you all the paths that are currently leading me to the PQS certification.

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Legal Corner

The dangers of misinterpreting contractual claim submission requirements (especially in standard form contracts)

nyone who has been involved in advancing, administering or responding to a claim for a contract change should be aware of the recent decision of the Ontario Court of Appeal in

Ross-Clair v. Canada (Attorney General), which upheld a determination of the owner denying the contractor’s claim for compensation. This decision provides important guidance from the courts on the proper interpretation of claims provisions within a contract, as well as useful commentary on the amount of deference that courts will give on appeal of a decision interpreting a standard form contract.

BackgroundRoss-Clair entered into a contract with Public Works and Government Services Canada (PWGSC) to construct office facilities for the Millhaven Institution in Bath, Ontario on a fixed-price basis with an original completion date of January 24, 2009. NORR Limited, as the Engineer, was the decider in first instance of any disagreements under the contract, and the Engineer’s decisions were final and a precondition to entry into the formal dispute resolution mechanisms under the contract.

The contract contained several interrelated provisions governing Ross-Clair’s entitlement to a change due to soil conditions or delays to the project. First, Ross-Clair was required to give the Engineer written notice of any intention to claim within 10 days of the occurrence of the originating event. Once such notice was given, GC 35.3 and 35.4 required Ross-Clair to give the Engineer a written claim within 30 days of the date that a Final Certificate of Completion was issued, noting that:

A written claim referred to in GC 35.3 shall contain a sufficient description of the facts and circumstances of the occurrence that is the subject of the claim to enable the Engineer to determine whether or not the claim is justified and the contractor shall supply such further and other information for that purpose as the Engineer requires from time to time.

If the Engineer determined that a claim was justified, then GC 35.5 required PWGSC to make an additional payment in an amount that is calculated “in accordance with GC 47 to GC 50” which addressed how costs for changes were to be determined.

If Ross-Clair failed to give a notice referred to in GC 35.2 or a claim referred to in GC 35.3 within the times stipulated, then it lost its entitlement to compensation for such claim.

During the course of the project, Ross-Clair advanced two claims under GC 35.3 totalling $2,204,676. The correspond-ence is described in greater detail to better illustrate the sequence of communication as it unfolded:

First Claim • December 5, 2008. Ross-Clair sent a letter to Engineer

providing notice of claim in the amount of $1,437,976 due to delays in the start of construction caused by PWGSC.

• December 16, 2008. Engineer stated in response that there was insufficient evidence to support the claim that the delay was caused by PWGSC and requested additional detail of projected costs and the impact on the project to support Ross-Clair’s claim.

• March 2, 2009. Ross-Clair replied to PWGSC explaining that the additional costs were as a result of delays due to, among other things, weather conditions, site conditions contract alterations, and disruptions to construction sequencing. Included in the letter was a document titled Additional Costs Summary listing various costs attributed to the work of subcontractors.

• April 2009 - October 2009. PWGSC wrote to Ross-Clair on 3 occasions requesting additional documentation to support Ross-Clair’s request for an extension of time and associated compensation including specifically referencing provisions of the contract and requiring a more in-depth analysis of the delays in order to properly allocate responsibility.

Second Claim• March 31, 2011. Ross-Clair submitted a second claim for

compensation as a result of further delays to the project and change order work performed from September 13, 2009 to April 20, 2010 in the amount of $766,700. This letter provided no additional information in support of that claim.

• April 20, 2011. PWGSC wrote to Ross-Clair advising that its second claim did not contain a sufficient level of detail to determine if the claim was justifiable and

Ethan McCarthy Richard Wong

A

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requested supporting information to substantiate the costs on the two outstanding claims.

• February 10, 2012. The Engineer certified Ross-Clair’s work as complete and a Final Certificate of Completion under GC 35.3 was issued.

Finally, on May 28, 2013, Ross-Clair provided PWGSC with a report prepared by Knowles in support of both claims entitled Analysis of Delays and Additional Costs.

Initial decision While PWGSC acknowledged that Ross-Clair properly submitted the required notices of intent to claim, it disputed that Ross-Clair provided sufficient information for the Engineer to make a determination on either claim under GC 35.4. Without a decision, Ross-Clair could not proceed through the dispute resolution process under the contract, so Ross-Clair brought an application for a court order compelling the Engineer to make a determination on both claims. The application judge identified the core issue of the dispute as the level of documentation required under GC 35.4 for the Engineer to consider a claim, deciding that the clause required more than mere notice of the claim but less than the proof of the claim an arbitrator would require.

Using that test, the application judge concluded that the first claim met the documentation requirements contained in GC 35.4 particularly given that the Engineer should have been an active participant in reviewing the progress of the project, but the second claim did not. Importantly, the provision of the Knowles report could not remedy the non-compliance of the second claim given that it was delivered outside of the timeline set forth in GC 35.3, a principle that the Ontario Court of Appeal had confirmed in an earlier decision in Technicore Underground Inc. v. Toronto (City). Therefore, the application judge ordered the Engineer to make a determination with respect to the first claim, which order PWGSC then appealed.

Standard of appeal The Court of Appeal first considered which standard it would apply in reviewing the application judge’s order: a standard of deference unless there was a ‘palpable and overriding error’ or a less deferential standard to re-review the order under a strict standard of ‘correctness.’ The court, acting unanimously, held that the standard of correctness applied and ruled that the application judge committed an extricable error of law for the reason of having interpreted GC 35.4 in isolation without

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Legal Corner

construing the contract as a whole, violating one of the fundamental principles of contractual interpretation.

Note in passing that PWGSC had advanced an alternative argument that the court should review the order based on a standard of correctness for the reason that the underlying contract was in fact a standard form agreement, consistent with other legal precedent. However, the court declined to do so, in this particular case, on the basis that it had insufficient evidence before it regarding the formation of the contract and those portions of the contract that were alleged by Ross-Clair to have been negotiated as opposed to being standard. Unfortunately, it is beyond the scope of the present article but there is much to be said on whether a given form of contract and its usage will be considered to be a standard form agreement for purposes of setting the standard of review.

Appeal decision and outcomeIn reviewing the contract under a standard of correctness, the court set aside the application judge’s order and declared that both of Ross-Clair’s claims were barred by operation of the contract because the information submitted was not detailed enough, even considering that the Engineer was intimately familiar with the project.

The court specifically found that the application judge failed to consider GC 49 and 50 of the contract, which described how costs for changes were to be determined and specified the type of information that should be submitted by Ross-Clair. Therefore, even though the word “detailed” was not expressly used within GC 35.4, because the Engineer required proof that the claim is justified to make a decision as to the validity of the claim, GC 35.4 should have been interpreted that a claim submitted to the Engineer must have been supported by detailed information as contemplated in the rest of the contract including GC 49 and 50. Under this test, the court reasoned that the December 5, 2008 and March 2, 2009 letters

noted above provided little support for the first claim, even considering the application judge’s finding that the Engineer was intimately familiar with the project, and found the letters to be lacking in specificity, confusing in terms of identifying the parts of the project affected by the delay and providing skeletal information of various sub-contractors costs but no breakdown.

However, the court did agree with the application judge’s finding that the Knowles report failed to meet the timeliness requirement of GC 35.3 and so could not be considered.

Lessons learnedThe court’s focus on interpreting the contract as a whole in Ross-Clair should serve as an important reminder to contract drafters, contract administrators (both on the owner and contractor side) and independent engineers of the importance of observing the procedural and substantive provisions of a construction contract as they relate to claims as well as changes, wherever they may reside in the contract. Evidentiary requirements should be met, especially in circumstances where the claims procedure sets an express time limit to provide the entire claim rather than just notice of the claim, as failure to do so in the appropriate time limit may result in loss of entitlement to compensation.

Some commentators have criticized the court as overstepping its boundaries to substitute its own judgment for that of the application judge who heard all the facts. This criticism may be unwarranted since the court found that the application judge did not consider GC 49 and 50 when interpreting GC 35.4. GC 49.2 specifically provided a list of information that Ross-Clair was required to submit to facilitate the approval of a change including the costs for each subcontract, a breakdown of labour, plant and material costs, and percentage mark-ups. To not consider whether this list of requirements should inform the interpretation of the evidentiary requirement under GC 35.4, which also dealt

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with changes to the contract, was a fundamental oversight on the part of the application judge in the eyes of the court. This fundamental error meant that threshold for overturning the application judge’s interpretation of GC 35.4 dropped from palpable and overriding error to correctness. Once the court found that the application judge incorrectly interpreted GC 35.4 in light of the contract as a whole, it necessarily fell to the court to reweigh the facts before it based on the correct interpretation, which although not ideal, is not beyond the role of an appellate court.

Also note that the contractor’s documentation requirements appeared to be materially unaffected by the involvement and knowledge of the Engineer in the day-to-day activities of the project, essentially requiring the contractor to independently submit the relevant claim documentation as opposed to relying on assumed or imputed knowledge of the engineer. While some may criticize this approach as being unduly formalistic, in our view given the size, complexity, and duration of today’s projects with multiple stakeholders including procurement authorities, lenders, counterparties, and other stakeholders, and given the realities of the labour market where key personnel may retire or move on during a project, this approach will lead to the creation of a free-standing record that will provide greater clarity for any relevant party including outside counsel in assisting in the resolution of the dispute with maximum efficiency.

Finally, while not an express factor in the court’s decision, it could not have hurt that PWGSC, in the chain of correspondence above, appeared to reply promptly, repeatedly, and clearly in its requirements to Ross-Clair for further information, which emphasizes the need for effective communication by any party when it comes to addressing claims.

Note: These comments are of a general nature and are not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.

About the authors:Richard Wong is a partner and co-chair of Osler’s Construction & Infrastructure Group, advising clients on project development issues from procurement to disputes. Richard has spoken at CIQS/RIQS events in 2015 and 2016 and is also engaged by Professional Engineers Ontario (PEO) to evaluate P.Eng Professional Practice.

Ethan McCarthy is an associate in Osler’s Construction & Infrastructure Group and a P. Eng (Civil). The key focus of his commercial practice is construction, infrastructure and energy, and has advised clients including Bruce Power, Atomic Energy of Canada Limited, and Pattern Energy.

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Tips on earning extra CPD points

CPD Corner

or the most part, technology makes our lives easier. We have all experienced the joys of having a computer automate

a task that used to take you hours, in mere seconds. Sadly, there are sometimes bumps in the road with any new technology. In this context, since users experienced some difficulties with our CPD web tracking system, we have decided to take it down from the webpage so that we can build a new and improved version. We hope to have it up and running soon and we look forward to everyone taking it out for a test drive.

With specific reference to CPD points, please remember that attending events is certainly not the only way

to attain more points. Serving on your affiliate board or with your local chapter provides a great opportunity to obtain CPD points. This would of course be a win/win by providing some assistance in organizing events. Many hands make light work! You can also contribute to the knowledge base by writing articles for the Construction Economist. Volunteering to speak on a topic is another great way of adding points, and I am sure your local Affiliate would be delighted to organize a location where that could occur and to email the members about the event. Another win/win!

Hope everyone has a great Autumn — filled with more treats than tricks! About the author

Wendy is a professional quantity surveyor with experience across all sectors of construction in construction loan monitoring, cost consulting, and risk management. During her office duties she was involved in a wide range of complex projects of values exceeding $100 million. Wendy has been a guest lecturer in construction financing and quantity surveying at SAIT Polytechnic and the University of Calgary. This experience reawakened the joy of teaching and led her to join the instructional team at SAIT’s School of Construction.

She sits on the Board of Directors for the Canadian Institute of Quantity Surveyors – Prairies and Northwest Territories, as President. She also sits on the national board as the Prairies and Northwest Territories representative, CPD Director and as Registrar.

Wendy Hobbs, PQS

F Serving on your affiliate board or with your local chapter provides a great opportunity to obtain CPD points.

QS Online Cost Consultants Inc.Halifax, Nova Scotia

p. 902 405-1504 halifax@qsonlinecostconsultants.com

www.qsonlinecostconsultants.com

• Feasibility Study • Cost Planning & Control • Project Monitoring • Contract Administration• P3s Monitoring

Alpha Cost Consultants Inc. 90 Winges Road Unit # 17, Woodbridge, ON, L4L 6A9 Ph: 289-845-3594 & Cell: 416-561-5667. www.alphacostcon.com; info@alphacostcon.com

32 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2016 To return to Table of Contents CLICK HERE

Introduction - Student and Associate mem-bers of the Institute wishing to attain either the Construction Estimator Certified (CEC) or Professional Quantity Surveyor (PQS) designa-tions are required to maintain a diary of their day-to-day professional duties. The purpose of this article is to provide a brief commentary on the diary process, designated as Part B of the Test of Professional Experience (TPE).

What is so important about these diaries? They are an integral part of the total examination process towards attaining one’s professional designation and, in the process, provide the vehicle that enables the Institute to assess the student’s practical day-to-day knowledge of the profession.

How long are students expected to maintain this diary process? CEC candidates can achieve their goal in as little as six months. To achieve the PQS designation, holders of the CEC designation will be required to provide about six more months of diaries. Candidates vying directly for their PQS designation could expect to complete their diary process in about 12 months. During these relatively brief periods, students are required to describe in acceptable detail, their professional work to the satisfaction of the administering body. The diary process is comprised of three separate paths each designed for a different purpose and with each being combined with successful completion of specific Academic Courses specifically:1. The Class D1 Diary Requirement is

designed to accommodate those students seeking their CEC designation and must be accompanied by the successful completion of 14 courses for Architectural Students, 15 for Mechanical Students and 16 for Electrical Students.

2. The Class D2 Diary Requirement is designed to accommodate those students who have attained their CEC designation, and are seeking their PQS designation. It must be accompanied by the successful completion of 25 courses for Architectural Students, 26 for Mechanical Students and 27 for Electrical Students.

3. The Class D3 Diary Requirement is designed to accommodate those students who having successfully completed all their academic courses and wish to attain

their PQS designation through the diary route.

Students will also be required to provide evidence of at least 3,600 hours of structured training or approved working experience. Complete details of the diary process can be found in Note # B2, Rules and Guide to the TPE of the Institute’s Education Policy Guidance Notes.

To achieve the standards expected by the Institute of every student compiling diaries, the National Council created and adopted standardised forms and instructions, and entrusted the administration of the process to the TPE Committee. The following illustrate the two forms that every student is mandated to use throughout his/her diary process. These forms, together with instructions and miscellaneous information to assist the student, will be issued upon commencement of the diary process.

The Diary SheetYou may ask, “Why do I need a diary sheet?” Why? So that you can record all those seemingly endless hours you spend doing Quantity Surveying ‘stuff’ to satisfy your demanding boss! And, whereas the Institute does not wish to stifle creativity, it is ‘hands-off’ to students wishing to make any modifications to this form.

Also, unlike professional diarists, who are entitled to write into their diaries whatever whimsical thoughts come to mind, a QS student is not permitted that latitude. He or she has to abide by the protocols designed to standardize the appearance and quality of the product and to follow the policies and instructions during their diary process. You may ask, “Why?” The answer is quite simple. As an employee of any contracting or consulting firm, you are generally required to conform to the policies and conventions set out by your employer. The Institute expects the same conformity to its policies and conventions.

Some ‘Dos’ the student must follow 1. Students are expected to follow the

format of the Sample Diary Sheet.2. ‘Supervisor’s Signature or Initials’

block must be retained at the bottom of each sheet.

3. Sub-group headings in italics must precede the Work Description. A student may ask, “Why is it necessary to provide a Work Description heading?” Answer: It provides the student with a benchmark to compose the Work Description, closely aligning it with the associated heading.

4. Each diary sheet to be independent of each other; this means when the bottom of the sheet is reached, start a fresh one.

The DIARY Requirements and approaches – an insight from the Chair of the TPE Committee

CIQS - On TPE DIARY SHEET Page 1 of

NAME: A.V.G. Student

ADDRESS: 1234 Anyplace Street, Big City, ON

Period CoveredWork Description

Project $Value or

GFAFrom To Work Hours Sub-Area

Office Tower $Value or GFA

May 1 May 1 6 6.2.1.7 Preparing, Monitoring and Finalizing Progress Claim

Preparing 2nd progress claim and collating sub-contractor progress claims (spc)

6.2.1.4 Site visits, evaluating site conditions including location

2 Site visit to establish authenticity of spc

Warehouse & Office Complex $Value or GFA

May 16 May 16 8 6.2.1.3 Contract Documents Review & Preparation of Bid Packages

Review Instructions to Bidders and General Conditions

96 Supervisor’s Signature or Initials

Fall 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 33CLICK HERE to return to Table of Contents

Company Page Phone # Website/E-mail

Alpha Cost Consultants Inc. 32 289-845-3594 www.alphacostcon.com

Altus Group 36 905-953-9948 www.altusgroup.com

CB Ross Partners 19 416-487-3330 www.cbross.ca

Exactal 2 512-768-8111 www.exactal.com

George Brown College 3 800-265-2002 www.coned.georgebrown.ca

Goldman Sloan Nash & Haber LLP 26 416-597-9922 www.gsnh.com

Insite SiteWork 4 877-746-7483 www.insitesoftware.com

Intrepid Quantity Surveying Inc. 31 416-628-5346 www.intrepidqs.com

Lakeland Consulting Inc. 35 905 829 4000 www.lakelandconsulting.com

LCO Construction and Mgmt 20 514-846-8914 www.lcogroup.com

Macogep 29 514-223-9001 www.macogep.com

Ontario General Contractors Association 11 905-671-3969 www.ogca.ca

Osler, Hoskin & Harcourt LLP 29 416-362-2111 (Toronto Office) www.osler.com

QS Online Cost Consultants Inc. 32 902 405-1504 www.qsonlinecostconsultants.com

QSM – Mechanical Quantity Surveying 31 416-949-8540 www.qsmcon.ca

TD Insurance 4 866-269-1371 www.melochemonnex.com

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Some ‘Don’ts’ the student must follow.1. Do not follow on from

one sheet to another.2. Do not place the Heading on

one sheet with the Work Description on the following sheet.

3. Do not modify the sheet to suit some bizarre alternative design.

As mentioned herein, full instructions will be issued to students upon commence-ment of their diary process.

The analysis of Diary SheetYou ask, “What, another sheet to worry about? Why do I have to fill in something else?” Why? So that you can collate, in some form of intelligent order, all those endless hours compiled on your diary sheet to provide, at a glance, your progress to-wards completing the requisite hours.

This illustrated sheet individually refers to ‘Class D1 Requirement Candidates.’ Do not worry though. You Class D2 and Class D3 Candidates will be just as indi-vidually accommodated!

Great care and accuracy should be taken when compiling the hours on this sheet. It is used to quantify the total hours on a quarterly basis enabling the Committee to assess the students’ progress towards his/her chosen designation. In conclusion, if the student believes this diary process is an

therefore be treated with equal importance. So, to those many students approved to commence your diaries: Get cracking! Your Committee is looking forward to reading your professional experience!

onerous task, well it is! But remember it is no more onerous than studying for and successfully completing the many academic courses required to eventually becoming a Professional Quantity Surveyor, and should

About the AuthorGraham Randall, PQS(F)’s Quantity Surveying career spanned nearly 60 years, starting in Kenya in 1957 as an articled pupil in a Chartered Quantity Surveying office, followed by an on-site QS for a Nairobi City Council housing estate, and on to the resident QS for a Swedish-financed,

multi-building college campus. In 1967, Graham immigrated to Canada, where he held senior positions with a consulting firm and thereafter with many construction companies, culminating as Vice-President of Estimating with a well-known design/build construction company. Ill health forced Graham into early retirement in 2003. In 2006, Lois Metcalfe persuaded him to take on a new challenge: assisting Gordon Pattison with the review of the TPE diaries. In March 2007, he was appointed Chair of the TPE Committee, a position he continues to hold. Over the intervening years Graham assisted the Education Committee in modernizing the diary process to its current standard, the standard with which today’s students work.

AREA OF REQUIRED EXPERIENCESUB- AREA

Month1

Month2

Month 3

Total1-3

Month 4

Month5

Month6

Total 4-6

Month 7

Month 8

Month 9

Total 7-9

Month10

Month11

Month 12

Total 10-12

SUB-TOTAL

Core Requirements. (Minimum of any 3 Sub-Sections for Class D1 and any 5 Sub-Sections for Class D2 and D3 Requirements to be completed).

6.2.1 0.00 0.00 0.00 0.00 0.00 0.00

Budgeting including Preparing and Using Historical Cost Data 6.2.1.1 0.00 0.00 0.00 0.00 0.00

Quantity Take-Off 6.2.1.2 0.00 0.00 0.00 0.00 0.00

Contract Documents Review & Preparation of Bid Packages 6.2.1.3 0.00 0.00 0.00 0.00 0.00

Site Visits, Evaluating Site Conditions including Location 6.2.1.4 0.00 0.00 0.00 0.00 0.00

Estimating and/or Negotiating Change Orders 6.2.1.5 0.00 0.00 0.00 0.00 0.00

Pricing Analysis, Progress Cash Flow Charts 6.2.1.6 0.00 0.00 0.00 0.00 0.00

Preparing, Monitoring and Finalizing Progress Claims 6.2.1.7 0.00 0.00 0.00 0.00 0.00

Optional Requirements. (At least 3 Sub-Sections for Class D1 and at least 5 Sub-Sections for Class D2 and Class D3 Requirements to be completed).

6.2.2 0.00 0.00 0.00 0.00 0.00 0.00

Feasibility Studies 6.2.2.1 0.00 0.00 0.00 0.00 0.00

Reserve Fund Studies/Costs 6.2.2.2 0.00 0.00 0.00 0.00 0.00

Life Cycle Costing Supplies 6.2.2.3 0.00 0.00 0.00 0.00 0.00

ANALYSIS OF DIARY SHEETS FOR MONTHS 1 to 12 (Revised August, 2015)This sheet is intended for use by Class D1 Diary Requirement Candidates.

NAME:BUILDING INDUSTRY _ ENGINEERING _

SUPERVISOR’S NAME:POSITION:

34 | CONSTRUCTION ECONOMIST | www.ciqs.org | Fall 2016 To return to Table of Contents CLICK HERE

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