Review of a complaint: Administration of a Construction Services Contract by the Parks Canada Agency New

March 2023

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The complaint

1. On August 29, 2022, the Office of the Procurement Ombudsman (OPO) received a written complaint from a supplier (the Complainant) regarding the administration of a contract awarded by the Parks Canada Agency (PCA). The contract was for upgrades to the wastewater system at a National Park. The contract, valued at a maximum of $98,900.00 (applicable taxes extra), was awarded on August 31, 2021.

2. The Complainant contacted OPO alleging the PCA project manager for the contract in question, had, on at least 3 occasions, given instructions for the Complainant to perform work, which had cost the Complainant over $50,000 in effort. The Complainant stated PCA had then: (1) cancelled the contract after the project was substantially complete; (2) refused to pay for extra work it had agreed to; and, (3) retained holdback for extra work in excess of the actual values without any evidence or supporting documentation.

3. In addition, the Complainant requested an in-depth general investigation into PCA’s behaviour. The Complainant alleged it had been wrongfully prejudiced by PCA and that PCA had made misrepresentations and blatantly lied regarding its agreements with the Complainant. The Complainant alleged PCA accused the Complainant of fraud, with no evidence of actual fraud, in an effort to cover up for PCA’s systemic corruption. The Complainant alleged PCA had failed to negotiate in good faith over the period of 8 months for agreed-to-in-writing work and that PCA had cancelled 2 previous contracts with the Complainant and had then awarded them to another contractor for the personal financial gain of the PCA employees.

4. Regarding the contract in question, the Complainant raised 3 issues:

5. On September 12, 2022, OPO confirmed the complaint met the requirements of sections 15 and 16 of the Procurement Ombudsman Regulations (Regulations) and it was considered filed.

Mandate

6. This review of complaint was conducted under the authority of paragraph 22.1(3)(c) of the Department of Public Works and Government Services Act and sections 15 to 22 of the Regulations.

7. The Procurement Ombudsman’s review is limited to the allegation found in paragraph 4b) above, i.e. PCA failed to negotiate in good faith and had refused to pay for the full value of the extra work to which it had agreed. As the ground of complaint regarding the value of any performed extra work met the conditions of Sections 15 and 16 of the Regulations, the Procurement Ombudsman is required to review this aspect of the complaint.

8. The issues raised in paragraph 3, and issues a) and c) of paragraph 4 relate to the application or interpretation of the terms and conditions of the contract. As subsection 18(1) of the Regulations prohibits the Procurement Ombudsman from reviewing issues and concerns relating to the interpretation and application of the terms and conditions or the scope of the work of a contract, such issues are beyond the Procurement Ombudsman’s legal mandate for review and therefore do not form part of this review.

9. Pursuant to subsection 18(2) of the Regulations, the Procurement Ombudsman requested the Complainant and PCA provide all documents and information necessary for the review. PCA was also asked to provide a written response to the issues identified in the Complaint.

10. The documents and information were necessary to conduct the review in accordance with Section 20 of the Regulations, which specifies the Procurement Ombudsman shall take into consideration, for the purpose of the review, any relevant factors, including the following:

11. PCA provided OPO with a response to the issues highlighted in the complaint, as well as supporting documents. In addition to the complaint, the Complainant provided OPO with documents and written communications exchanged between the Complainant and PCA associated with the administration of the contract as well as additional correspondence with other non-PCA personnel regarding the issues at hand.

12. The findings in this report are based on the records provided by PCA and the Complainant. The failure by either PCA or the Complainant to disclose any relevant records or information could impact the findings of this report.

Analysis of issue and findings

Issue: Did the Parks Canada Agency fail to negotiate in good faith with the Complainant regarding the amount owing for the extra work it asked the complainant to perform and pay for such extra work?

13. On August 31, 2021, PCA awarded the Complainant a contract for construction work in one of Canada’s National Parks. The work consisted of upgrading part of the Park’s waste management system and included the: (1) removal and replacement of a lift station; (2) removal and replacement of an abandoned holding tank; and the (3) supply and installation of cover boxes for 8 shower valves. The contract included mobilization and demobilization and required the Complainant to connect the new lift station and holding tank and rehabilitate all disturbed areas associated with the holding tank including using stockpiled native topsoil and redistributing it over the disturbed area and to supply and install PCA-recommended seed with mix.

14. Once the work started, additional work beyond the original scope of the contract was identified by the Complainant as being required to complete the project. On October 10, 2021, the Complainant advised PCA that, for safety reasons, a large, above-ground propane tank located near the to-be-replaced lift station would have to be moved. On November 5, 2021, a previously unknown foundation for an old building was found in the planned location of the new holding tank. A new location had to be determined and cleared, etc., for the new holding tank. The Complainant claims it should be paid for all costs associated with performing both these elements of the work. While not disputing the work was necessary, PCA considers the work and costs associated with the propane tank to have already been included in the contract, and it disputes the amount the Complainant claimed it should be paid for carrying out the relocation of the new holding tank.

15. In its June 1996 decision in Kei – Ron Holdings Ltd. V. Coquihalla Motor Inn Ltd., the Supreme Court of British Columbia, set out four elements that must be established in determining liability for the cost of extra work:

The cases employ different wording and approach the problem of extras from different angles, but share common underlying principles. In determining liability for the cost of extra work, the first question to be answered is whether the work performed was, in fact, extra work; that is, it did not fall within the scope of work originally contemplated by the contract. If so, did the owner give instructions, either express or implied, that the work be done or was the work otherwise authorized by the owner? Next, was the owner informed or necessarily aware that the extra work would increase the cost? Finally, did the owner waive the provision requiring changes to be made in writing or acquiesce in ignoring these provisions? If the plaintiff can establish these elements, the defendant is liable to pay a reasonable amount for the extra work. These elements must be proved with respect to each extra claimed.

The Propane Tank

16. There is no specific reference to moving the propane tank in the contract. The contract was for, among other services, to remove and replace the lift station. However, the Complainant identified safety concerns due to the proximity of the propane tank to the lift station and the possibility of a cave-in during the lift station removal/replacement. Ultimately, the Complainant did move the propane tank.

17. PCA asserted, by virtue of clauses 3.1. and 3.2 of Section 02 41 00 of Annex B of the contract’s specifications, the Complainant was responsible for protecting existing structures, providing safe work conditions, and making arrangements with and performing work associated with utility companies if a disruption is required:

18. PCA also noted there had been an optional site visit, and access to the site had been unrestricted during the tender period, which it claimed meant any bidder visiting the project location would have seen the tank and submitted their bid price accordingly.

19. The Complainant stated, under architectural standards, a loose propane tank was supplied by PCA and is not a utility and that the specification did not say anything about relocating utilities or services. The Complainant also advised PCA that site visits and walk-throughs do not dictate the work under the contract.

20. For PCA to be required to pay a reasonable amount for the extra work, each of the 4 questions identified in Kei – Ron Holdings Ltd. V. Coquihalla Motor Inn Ltd. noted at paragraph 15 above must be answered in the affirmative:

  1. Was relocating the propane tank “extra work”; or did it fall within the scope of work originally contemplated by the contract?
  2. Did PCA give instructions, either express or implied, that the propane tank would have to be moved or was the work otherwise authorized by PCA?
  3. Was PCA informed or necessarily aware that moving the propane tank would increase the cost?
  4. Did PCA waive the provision requiring changes to be made in writing or acquiesce in ignoring these provisions?

21. As noted in paragraph 8 above, subsection 18(1) of the Regulations prohibits the Procurement Ombudsman from reviewing issues and concerns relating to the interpretation and application of the terms and conditions or the scope of the work of a contract. Regarding the work associated with moving the propane tank, the parties disagree on whether moving the propane tank is within the scope of work originally contemplated by the contract. Therefore, the Procurement Ombudsman does not have the authority to review this aspect of the complaint or to make a recommendation with respect thereto.

The Holding Tank

22. The contract also required the Complainant to remove and replace an abandoned holding tank but in a location different from the removal location (herein called “contract specified location”) On November 5, 2021, during the conduct of the work, the contract specified location of the new holding tank was found to be compromised because a foundation from a forgotten demolished building was discovered at that site. The foundation’s location was not disclosed in any of the information provided to bidders.

23. PCA asked the Complainant to provide options for addressing the issue. That same day, the Complainant advised PCA this work was outside of the scope of the contract and provided PCA with 2 costed options for the additional holding tank work: (1) do extra work to render the contract specified location useable ($24,228); or, (b) relocate the tank to a new location (herein called “new location”) ($26,262). The next day, the Complainant submitted an updated estimate for the “new location” option ($21,7[2]0). PCA ultimately decided the new holding tank should be installed at the new location. Unlike the propane tank, there was no disagreement between the Parties about whether this work was part of the original scope of work; both agree that to install the new holding tank at a location different from the contract specified location, the Complainant would be performing extra work beyond that included in the original contract.

24. On November 8, 2021, PCA went back to the Complainant, with clarifying questions regarding the costing for the new location:

“New location” quote line items, PCA asked to clarify items with a *:

  1. Excavator hours*
  2. Tree removal
  3. Trucking waste materials off-site*
  4. Truck rental to removal grubbing to a different off-site location
  5. Additional site supervisor*
  6. Additional Living Out Allowance (LOA)*
  7. Additional plumbing*
  8. Profit and overhead*

25. The Complainant responded that same day. On November 9, 2021, PCA advised the Complainant to proceed with the new location option and that “[q]uote details will continue to be negotiated”.

26. On November 17, 2021, the Complainant informed PCA the costs for trucking the waste materials removed to allow installation in the new location would be over $5,000 more than estimated because the original yard would not take the load and so a different, more distant yard would have to be used. PCA told the Complainant to proceed with the work, but that “…disposal of material outside the National Parks remains [the Complainant’s] responsibility. PCA cannot dictate where the material should go or how the work is to be executed”. Regarding prices, PCA advised they would “…continue to sort out the price in accordance with Standard Acquisition Clauses and Conditions (SACC) [Public Services and Procurement Canada’s Standard Acquisition Clauses and Conditions] manual General Condition (GC)6—‘Delays and Changes in Work’”.

27. After the work had been completed, on December 1, 2021, the Complainant submitted what it claimed were its cost overages for the propane tank ($1,500) and the “new location” work ($38,441) and included an overall 20 percent overhead and profit margin ($7,988.20) for a total of $47,929.20, and stated “…see attached cost overages, we should be able to make a deal on this that’s [sic] more reasonable”.

28. According to that e-mail, the Complainant included options for seeding and having to move boulders, which had not been included in previous estimates and which the Complainant claimed were also outside the scope of the contract. The e-mail also noted site rehabilitation was not included because it had not yet happened. On December 7, 2021, PCA responded to the Complainant’s submission, stating the only extra work should have been for “…tree removal, additional excavating for the location change, and some small extras for subsurface conditions/hauling”. PCA asked for clarification on a majority of the listed cost elements. The Complainant did not respond to PCA’s comments until March 10, 2022, but, as will be described in the next paragraph, this estimate had been superseded.

29. On February 17, 2022, PCA sent the Complainant a reformatted copy of the Complainant’s November 6, 2021 cost estimate (with a math error fixed, which increased the value from the Complainant’s $21,7[2]0 to $22,428), “…populated with the additional costs stated in your previous email that is meant to assist with organization and tracking purposes, and is not to be considered acceptance of costs. As discussed, PCA requires further detail on the breakdown of costs prior to finalizing a change order”. On March 10, 2022, the Complainant provided its comments on its December 7, 2021 $47,929.20 submission. When it was questioned by PCA, the Complainant acknowledged this was an error. On March 18, 2022, the Complainant provided its comments on PCA’s February 17, 2022 $22,428 submission.

30. On May 4, 2022, PCA advised the Complainant it had reviewed the Complainant’s March 18, 2022 cost submission and had some further questions regarding 6 of the 8 line items. PCA asked the Complainant “…[p]lease respond to each of these in writing and provide the necessary supporting documentation. Please include a detailed explanation on the scope of work for each line item that you are claiming extras for, including quantities, rates, time, and all other pertinent information that will assist me in understanding how the submitted costs were developed”. On May 5, 2022, the Complainant provided its response. On May 19, 2022, the Complainant followed up asking if PCA required any further clarification. On May 20, 2022, the Complainant provided copies of 2 invoices related to the work in question.

31. On April 6, 2022, while the Parties were exchanging information, PCA advised the Complainant it had found an issue with one of the invoices submitted by the Complainant in its supporting documentation. After exchanged submissions regarding this issue, PCA terminated the contract on July 4, 2022.

32. In its July 4, 2022 letter terminating the contract, PCA informed the Complainant of how much PCA would pay for the extra work stating the value was “… not a starting point for negotiations but rather a best and final offer made in good faith as an attempt to close out this contract in a timely manner”. PCA’s final offer of $15,759.09 included the amount remaining in the contract, and a release of the holdback, $14,214 for the costs associated with the extra work with $5,300 subtracted for deficiencies.

33. To get paid that amount, the Complainant was required to, and did, on August 22, 2022, submit an invoice for the amount listed in PCA’s July 4, 2022 letter. PCA paid this amount to the Complainant on September 23, 2022. Between when the Complainant submitted its invoice and it getting paid, the Complainant filed its complaint with OPO. OPO launched this review on September 27, 2022 and was unaware of the final invoice and its payment until PCA filed its information with OPO on October 19, 2022.

34. For PCA to be required to pay a reasonable amount for the extra work, each of the 4 questions identified in Kei – Ron Holdings Ltd. V. Coquihalla Motor Inn Ltd. noted at paragraph 15 above must be answered in the affirmative. As PCA has already paid the Complainant $14,214 for the extra work, OPO must determine if the actual amount owed is greater or less than this amount. OPO considered the 4 aforementioned questions as follows:

  1. Was relocating the holding tank to a location other than as specified in the Statement of Work (SOW) “extra work”; or did it fall within the scope of work originally contemplated by the contract?

    i. OPO considers the work contemplated by the contract had to be amended due to the discovery of a foundation in the area originally selected as the site for the new holding tank. This is consistent with the actions of the Parties, i.e., the Complainant provided a quote for the extra work and PCA advised the Complainant to pursue the option of installing the new holding tank in the new location. Therefore, OPO concludes that installing the holding tank in the new location is “extra work”.

  2. Did PCA give instructions, either express or implied, that relocating the holding tank to the new location be done or was this work otherwise authorized by PCA?

    i. On at least 2 occasions, PCA staff told the Complainant to proceed with the work of installing the new holding tank in the new location and that the costs would be determined at a later time. Therefore OPO concludes that PCA gave express instructions to the Complainant to install the new holding tank in the new location.

  3. Was PCA informed or necessarily aware that that relocating the holding tank to a new location would increase the cost?

    i. On November 5, 2021 when PCA received the 2 costed options for the additional holding tank work: (1) do extra work to render the contract-specified location useable ($24,228); or (b) relocate the tank to a new location ($26,262) and on November 6, 2021 an updated estimate for the “new location” option ($21,7[2]0). Therefore OPO concludes that PCA was duly informed and was well aware that there would be extra costs associated with this extra work.

  4. Did PCA waive the provision requiring changes to be made in writing or acquiesce in ignoring these provisions?

    i. PCA required the Complainant to submit documents, outlining the additional work to install the new holding tank in a new location, and their costs, on 2 occasions prior to authorizing the Complainant to proceed with the work on November 9, 2021. In both cases, PCA advised the Complainant to proceed with the work and that the quote details would be determined in the future. By telling the complainant to do the work to install the new holding tank in a new location and the cost would be worked out later, PCA acquiesced in ignoring the requirement of a formal change order.

35. In consideration of the above, OPO finds the work involved to install the new holding tank in a new location was outside of the work contemplated by the contract and attachments dated August 31, 2021 and as such constituted extra work. PCA cannot be unjustly enriched by having this work done without incurring reasonable costs for doing so.

Conduct during Negotiations

36. The Complainant alleged PCA had failed to negotiate in good faith during the 8 months prior to the Complainant filing its complaint with OPO, i.e., from November 2021 to August 2022. During that time, the Complainant and PCA had a number of exchanges—e-mails, by phone and face-to-face—where details of the work and costs were discussed. Though the Parties could not come to any agreement until 9 months after the initial estimate, it does not necessarily mean one or both of the Parties were acting in bad faith.

37. Black’s Law Dictionary defines bad faith as:

The opposite of “good faith,” generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one’s rights or duties, but by some interested or sinister motive.

Regardless of the status of the Parties current relationship, OPO’s review of the correspondence relating to the extra work at issue indicates the 2 sides were both working collaboratively toward meeting the same goal, i.e., finishing the work and having a working, upgraded wastewater system in the National Park in time for the Park opening in 2022.

38. OPO notes delays in the information exchange process on both sides, e.g., the Complainant did not respond to PCAs December 7, 2021 questions until March 10, 2022; PCA did not respond to the Complainant’s March 18, 2022 submission until May 4, 2022. Delays were exacerbated by the issues which arose regarding other contracts between the parties or which were fundamentally separate from the negotiations regarding changing the location proposed for the holding tank. As these issues are separate from this contract, and outside of the scope of OPO’s review, OPO cannot conclude on these issues under this review of complaint.

39. Referring back to the Black’s Law Dictionary definition of bad faith noted above, and based on the information provided by both Parties, OPO does not consider the actions of either Party to constitute bad faith. OPO considers the submissions made by the Complainant as legitimate attempts to recoup costs it claimed it incurred, and PCA’s requests for more information or explanations served as legitimate requests to receive more context and support for the Complainant’s claimed amount.

Conclusion

40. The Procurement Ombudsman finds PCA is required to pay for the cost of the extra work undertaken by the Complainant to install the new holding tank in a location (the new location) different from that specified in the contract (the contract specified location).

Cost of extra work

41. Section 21 of the Regulations specifies the Procurement Ombudsman may not make recommendations:

  1. altering the terms and conditions of a contract; or
  2. providing a remedy other than as specified in the contract.

42. Related to these circumstances, the contract incorporated Standard Acquisition Clause R2865D (2019-05-30); the wording of that clause is lengthy and is included in Annex I to this Report.

43. The Parties agreed in Section GC6.4 of the contract how to calculate the value of extras, so as between them, this method of calculating the cost of extra work is deemed to be “reasonable”.

44. In OPO’s review of the documentation, it is clear the Parties endeavoured to get the bulk of the work of the contract done in the available window of time, with the expectation that the details, including finishing up the landscaping and finalizing prices, would be done after the holding tank and new lift station were installed.

45. The Procurement Ombudsman believes PCA should have progressed further in the discussions with the Complainant regarding cost implications before proceeding with the extra work. When significant details of the extra work and the associated costs are not known, the existing contractual terms will not by themselves mitigate the risks of a likely dispute.

46. As noted above, in response to the 4 questions noted in Kei – Ron Holdings Ltd. V. Coquihalla Motor Inn Ltd., PCA told the Complainant to proceed with the extra work involved to install the new holding tank in a new location and was aware there would be additional costs associated with this work. OPO notes the Complainant was already contractually required to remove and replace the holding tank for the amount it quoted in its bid and which was included in the contract, but at the contract specified location.

47. Regardless of where the new holding tank was going to be installed, the Complainant was required to: (1) remove the old tank; (2) dig a hole for the new tank; (3) install the new tank and hook it up to the wastewater system; and then, (4) cover up the tank with soil and grass to make it blend in with the existing landscape. PCA would then pump out the tank when required.

48. Having already dug the hole for the contract specified location (that is how the foundation was discovered), it was in digging the hole for the new location where OPO believes the Complainant incurred additional expenses above the amount in the contract which included the cost of digging the hole at the contract specified location (one location). Both sides acknowledge a second hole had to be dug and there were boulders which had to be removed at that second site. OPO can find nothing in the submissions which would indicate the requirement to move boulders, or even whether their existence, had been contemplated when the Complainant submitted its initial estimate for the extra work to dig the second hole. The boulders were likely under the soil and, like the foundation at the contract specified location, only discovered when excavation began. In its December 1, 2021 cost overage submission, the Complainant attributed $3,900 to moving these boulders:

49. OPO accepts these costs, with the exception of the LOA, which should be $198.45 in keeping with other LOA charges accepted by PCA.

50. The new location also required the Complainant to incur costs above its estimate for additional backfill ($621) and a site supervisor ($315) to oversee the falling of 4 trees which had to be removed from the new location to allow placement of the new tank.

51. These costs all fall under sub-paragraph 2 of GC6.4.2 Price Determination Following Completion of Changes:

2. The cost of labour, Plant and Material referred to in subparagraph 1)(a) of GC6.4.2 shall be limited to the following categories of expenditure:

  1. a) payments to Subcontractors and Suppliers;
  2. b) wages, salaries, bonuses and, if applicable, travel and lodging expenses of employees of the Contractor located at the site of the Work and that portion of wages, salaries, bonuses and, if applicable, travel and lodging expenses of personnel of the Contractor generally employed at the head office or at a general office of the Contractor provided they are actually and properly engaged on the Work under the Contract;
  3. …
    f) payments for Material that is necessary for and incorporated in the Work, or that is necessary for and consumed in the performance of the Contract;

52. In consideration of the above, and the submissions of the Parties during the negotiations, OPO finds PCA to be required to pay for additional reasonable costs in the amount of $5,207.89 made up of $4,734.45 for the work and $473.44 for profit, associated with the extra work the Complainant had to perform to install the holding tank in a location different from that specified in the contract.

Recommendation

53. In accordance with Section 22 of the Regulations, the Procurement Ombudsman recommends that, in addition to the amount of $14,214.00 already paid by PCA for the cost of the extra work performed by the Complainant in locating the replacement holding tank in a new location, PCA pay to the Complainant a further amount of $5,207.89.

Annex 1—Text of incorporated clause R2865D (2019-05-30)

Remarks—Recommended Use of Standard Acquisition Clauses and Conditions Item

This clause is for optional use by other government departments. R2860D is used for Public Works and Government Services Canada (PWGSC) contracts.

Legal text for Standard Acquisition Clauses and Conditions item

GC6.1 (2008-05-12) Changes in the Work

  1. At any time before issuance of a Certificate of Completion, Canada may issue orders for additions, deletions or other changes to the Work, or changes in the location or position of the whole or any part of the Work, if the addition, deletion, change or other revision is deemed by Canada to be consistent with the general intent of the Contract.
  2. An order referred to in paragraph 1) of GC6.1 shall be in writing and given to the Contractor in accordance with GC2.3, "Notices".
  3. Upon receipt of an order, the Contractor shall promptly perform the work in accordance with the order as if the order had appeared in and been part of the original Contract.
  4. If anything done or omitted by the Contractor pursuant to an order increases or decreases the cost of the Work to the Contractor, payment for the work shall be made in accordance with GC6.4, "Determination of Price".

GC6.2 (2008-05-12) Changes in Subsurface Conditions

  1. If, during the performance of the Work, the Contractor encounters subsurface conditions that are substantially different from the subsurface conditions described in the tender documents supplied to the Contractor, or a reasonable assumption of fact-based thereon, the Contractor shall give notice to Canada immediately upon becoming aware of the situation.
  2. If the Contractor is of the opinion that the Contractor may incur or sustain any extra expense or any loss or damage that is directly attributable to the changed subsurface conditions, the Contractor shall within 10 days of the date the changed subsurface conditions were encountered, give Canada written notice of intention to claim for that extra expense, loss or damage.
  3. If the Contractor has given a notice referred to in paragraph 2) of GC6.2, the Contractor shall give Canada a written claim for extra expense, loss or damage no later than 30 days after the date that a Certificate of Substantial Performance is issued.
  4. A written claim referred to in paragraph 3) of GC6.2 shall contain a sufficient description of the facts and circumstances of the occurrence that is the subject of the claim to enable Canada to determine whether or not the claim is justified, and the Contractor shall supply such further and other information for that purpose as Canada requires.
  5. If Canada determines that a claim referred to in paragraph 3) of GC6.2 is justified, Canada shall make an extra payment to the Contractor in an amount that is calculated in accordance with GC6.4, "Determination of Price".
  6. If, in the opinion of Canada, the Contractor affects a saving of expenditure that is directly attributable to a substantial difference between the information relating to subsurface conditions at the site of the Work that is contained in the tender documents, or a reasonable assumption of fact-based thereon, and the actual subsurface conditions encountered by the Contractor, the Contract Amount shall be reduced by the amount of the saving of expenditure determined in accordance with GC6.4, "Determination of Price".
  7. If the Contractor fails to give a notice referred to in paragraph 2) of GC6.2 and a claim referred to in paragraph 3) of GC6.2 within the times stipulated, an extra payment shall not be made to the Contractor in respect of the occurrence.
  8. Canada does not warrant the content expressed in any subsurface report available for the perusal of the Contractor that does not form part of the tender and contract documents.

GC6.3 (2008-05-12) Human Remains, Archaeological Remains and Items of Historical or Scientific Interest

  1. For the purposes of this clause
    1. "human remains" means the whole or any part of a deceased human being, irrespective of the time of death;
    2. "archaeological remains" are items, artefacts or things made, modified or used by human beings in antiquity and may include, but not be limited to, stone, wood or iron structures or monuments, dump deposits, bone artefacts, weapons, tools, coins, and pottery; and
    3. "items of historical or scientific interest" are naturally occurring or manufactured objects or things of any age that are not archaeological remains but may be of interest to society because of their historical or scientific significance, value, rarity, natural beauty, or other quality.
  2. If, during the course of the Work, the Contractor encounters any object, item or thing which is described in paragraph 1) of GC6.3 or which resembles any object, item or thing described in paragraph 1) of GC6.3, the Contractor shall
    1. take all reasonable steps, including stopping work in the affected area, to protect and preserve the object, item or thing;
    2. immediately notify Canada of the circumstances in writing; and
    3. take all reasonable steps to minimize additional costs that may accrue as a result of any work stoppage.
  3. Upon receipt of a notification in accordance with subparagraph 2)(b) of GC6.3, Canada shall promptly determine whether the object, item or thing is one described in, or contemplated by paragraph 1) of GC6.3, and shall notify the Contractor in writing of any action to be performed, or work to be carried out, by the Contractor as a result of Canada's determination.
  4. Canada may, at any time, enlist the services of experts to assist in the investigation, examination, taking of measurements or other such recordings, placing of permanent protection around or removing of the object, item or thing encountered by the Contractor, and the Contractor shall, to the satisfaction of Canada, allow them access and co-operate with them in the carrying out of their duties and obligations.
  5. Human remains, archaeological remains and items of historical or scientific interest encountered at the site of the Work shall be deemed to be the property of Canada.
  6. Except as may be otherwise provided for in the Contract, the provisions of GC6.4, "Determination of Price", and GC6.5, "Delays and Extension of Time", shall apply.

GC6.4 (2013-04-25) Determination of Price

GC6.4.1 Price Determination Prior to Undertaking Changes

  1. If a Lump Sum Arrangement applies to the Contract or a part thereof, the price of any change shall be the aggregate estimated cost of labour, Plant and Material that is required for the change as agreed upon in writing by the Contractor and Canada plus a negotiated allowance for supervision, co-ordination, administration, overhead, margin and the risk of undertaking the work within the stipulated amount.
  2. If a Unit Price Arrangement applies to the Contract or a part thereof, the Contractor and Canada may, by agreement in writing, add items, units of measurement, estimated quantities and prices per unit to the Unit Price Table.
  3. A price per unit referred to in paragraph 2) of GC6.4.1 shall be determined on the basis of the aggregate estimated cost of labour, Plant and Material that is required for the additional item as agreed upon by the Contractor and Canada, plus a negotiated allowance.
  4. To facilitate approval of the price of the change or the additional price per unit as applicable, the Contractor shall submit a cost estimate breakdown identifying, as a minimum, the estimated cost of labour, Plant, Material, each subcontract amount, and the amount of the negotiated allowance.
  5. If no agreement is reached as contemplated in paragraph 1) of GC6.4.1, the price shall be determined in accordance with GC6.4.2.
  6. If no agreement is reached, as contemplated in paragraphs 2) and 3) of GC6.4.1, Canada shall determine the class and the unit of measurement of the item of labour, Plant or Material and the price per unit shall be determined in accordance with GC6.4.2.

GC6.4.2 Price Determination Following Completion of Changes

  1. If it is not possible to predetermine, or if there is failure to agree upon the price of a change in the Work, the price of the change shall be equal to the aggregate of
    1. all reasonable and proper amounts actually expended or legally payable by the Contractor in respect of the labour, Plant and Material that fall within one of the classes of expenditure described in paragraph 2) of GC6.4.2, that are directly attributable to the performance of the Contract;
    2. an allowance for profit and all other expenditures or costs, including overhead, general administration costs, financing and interest charges, in an amount that is equal to 10 percent of the sum of the expenses referred to in subparagraph 1)(a) of GC6.4.2; and
    3. interest on the amounts determined under subparagraphs 1)(a) and 1)(b) of GC6.4.2 calculated in accordance with GC5.12, "Interest on Settled Claims";
  2. The cost of labour, Plant and Material referred to in subparagraph 1)(a) of GC6.4.2 shall be limited to the following categories of expenditure:
    1. payments to Subcontractors and Suppliers;
    2. wages, salaries, bonuses and, if applicable, travel and lodging expenses of employees of the Contractor located at the site of the Work and that portion of wages, salaries, bonuses and, if applicable, travel and lodging expenses of personnel of the Contractor generally employed at the head office or at a general office of the Contractor provided they are actually and properly engaged on the Work under the Contract;
    3. assessments payable under any statutory authority relating to workers' compensation, employment insurance, pension plan or holidays with pay, provincial health or insurance plans, environmental reviews, and Applicable Taxes collection costs;
    4. rent that is paid for Plant, or an amount equivalent to the said rent if the Plant is owned by the Contractor, that is necessary for and used in the performance of the Work, if the rent or the equivalent amount is reasonable and use of that Plant has been approved by Canada;
    5. payments for maintaining and operating Plant necessary for and used in the performance of the Work, and payments for effecting repairs thereto that, in the opinion of Canada, are necessary for the proper performance of the Contract, other than payments for any repairs to the Plant arising out of defects existing before its allocation to the Work;
    6. payments for Material that is necessary for and incorporated in the Work, or that is necessary for and consumed in the performance of the Contract;
    7. payments for preparation, delivery, handling, erection, installation, inspection, protection and removal of the Plant and Material necessary for and used in the performance of the Contract; and
    8. any other payments made by the Contractor with the approval of Canada that are necessary for the performance of the Contract in accordance with the Contract Documents.

GC6.4.3 Price Determination—Variations in Tendered Quantities

  1. Except as provided in paragraphs 2), 3), 4) and 5) of GC6.4.3, if it appears that the final quantity of labour, Plant and Material under a price per unit item shall exceed or be less than the estimated tendered quantity, the Contractor shall perform the Work or supply the Plant and Material required to complete the item and payment shall be made for the actual Work performed or Plant and Material supplied at the price per unit set out in the Contract.
  2. If the final quantity of the price per unit item exceeds the estimated tendered quantity by more than 15 percent, either party to the Contract may make a written request to the other party to negotiate an amended price per unit for that portion of the item which exceeds 115 percent of the estimated tendered quantity, and to facilitate approval of any amended price per unit, the Contractor shall, on request, provide Canada with
    1. detailed records of the actual cost to the Contractor of performing or supplying the tendered quantity for the price per unit item up to the time the negotiation was requested; and
    2. the estimated unit cost of labour, Plant and Material required for the portion of the item that is in excess of 115 percent of the tendered quantity.
  3. If agreement is not reached as contemplated in paragraph 2) of GC6.4.3, the price per unit shall be determined in accordance with GC6.4.2.
  4. If it appears that the final quantity of labour, Plant and Material under a price per unit item shall be less than 85 percent of the estimated tendered quantity, either party to the Contract may make a written request to the other party to negotiate a change to the price per unit for the item if
    1. there is a demonstrable difference between the unit cost to the Contractor of performing or supplying the estimated tendered quantity and the unit cost to the Contractor for performing or supplying the final quantity; and
    2. the difference in unit cost is due solely to the decrease in quantity and not to any other cause.
  5. For the purposes of the negotiation referred to in paragraph 4) of GC6.4.3
    1. the onus of establishing, justifying and quantifying a proposed change lies with the party making the request for negotiation; and
    2. in no event shall the total price for an item that has been amended as a result of a reduction in quantity pursuant to paragraph 4) of GC6.4.3 exceed the amount that would have been payable to the Contractor had 85 percent of the tendered quantity actually been performed or supplied.

GC6.5 (2008-05-12) Delays and Extension of Time

  1. Upon application of the Contractor made before the date first fixed for completion of the Work or before any other date previously fixed under this clause, Canada may extend the time for completion of the Work by fixing a new date if Canada determines that causes beyond the control of the Contractor have delayed its completion.
  2. The Contractor's application shall be accompanied by the written consent of the bonding company whose bond forms part of the Contract Security.
  3. Subject to paragraph 4) of GC6.5, no payment, other than a payment that is expressly stipulated in the Contract, shall be made by Canada to the Contractor for any extra expense, loss or damage incurred or sustained by the Contractor due to delay, whether or not the delay is caused by circumstances beyond the control of the Contractor.
  4. If the Contractor incurs or sustains any extra expense or any loss or damage that is directly attributable to any neglect or delay that occurs after the date of the Contract on the part of Canada in providing any information or in doing any act that the Contract either expressly requires Canada to do or that would ordinarily be done by an owner in accordance with the practice of the trade, the Contractor shall give Canada written notice of intention to claim for that extra expense or loss or damage within ten working days of the date the neglect or delay first occurred.
  5. When the Contractor has given a notice referred to in paragraph 4) of GC6.5, the Contractor shall give Canada a written claim for the extra expense, loss or damage no later than 30 days after the date that a Certificate of Completion is issued and not afterwards.
  6. A written claim referred to in paragraph 5) of GC6.5 shall contain a sufficient description of the facts and circumstances of the occurrence that is the subject of the claim to enable Canada to determine whether or not the claim is justified and the Contractor shall supply such further and other information for that purpose as Canada may require.
  7. If Canada determines that a claim referred to in paragraph 5) of GC6.5 is justified, Canada shall make an extra payment to the Contractor in an amount that is calculated in accordance with GC6.4, "Determination of Price".
  8. If the Contractor fails to give a notice referred to in paragraph 4) and a claim referred to in paragraph 5) of GC6.5 within the times stipulated, an extra payment shall not be made to the Contractor in respect of the occurrence.
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