geotechnical engineering practices in canada - the Office of ...

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CHAPTER 2
INNOVATIVE CONTRACTING AND PERFORMANCE-BASED
SPECIFICATIONS
History and Development
The MTO is in the process of streamlining its organizational structure. For a 3-year period,
the MTO is under an edict to reduce staff by approximately two-thirds. Because of the
significant reduction in force, the MTO has had to define and implement innovative
contracting procedures to accomplish the same amount of work that it performed in the past.
To date, most of the innovative contracting procedures have been implemented with the
recognition that lessons will be learned and modifications to the processes will be made upon
project evaluation.
In project development, the MTO has instituted a Total Project Management (TPM)
approach that requires the consultant to perform all scoping services, in addition to project
design. Such services include subsurface investigations, the establishment and purchase of
land acquisition, and utility relocation needs. Under this approach, the standard contracting
selection process for consultants is based on the best bid of registered consultants—that is,
cost, qualifications, and additional evaluation criteria are used in the selection process. The
first step is to prequalify consultants. A performance index assigned for each contract is
based on the attributes of quality (60 percent), safety (15 percent), timeliness (15 percent),
and contract execution (10 percent), as outlined in Contractor Rating, 1997 (MTO, 1997).
Value engineering proposals are then reviewed, and the final selection is based on cost and
quality.
The MTO qualifies engineering consultants and subconsultants and maintains a registry.
Under the TPM process, points are assessed to consultants based on technical competence
and cost. There are no qualification requirements, similar to the Brooks Act, for selection of
engineering services.
For design-build projects, an adjusted best-bid award process is commonly used, and eight
design-build projects have been awarded by the MTO. Bidders are prequalified, and,
typically, three to five are selected to submit proposals. Unlike the prime contractor,
subcontractors are not prequalified, but they are typically registered with the MTO and must
be selected by the prime contractor prior to award. The MTO must approve changes if the
prime elects to change subcontractors after award. This restricted bid practice was
established as a result of a process evaluation of past performance of design-build projects.
Awards are based primarily on low bid; however, in several cases, final selections have
included quality criteria. In Ontario, no current legislation limits or directs the use of
innovative contracting. On one design-build project, Highway 407, a Toronto bypass, a “buy
Ontario” provision was required for 30 percent of the work.
Partnering and team concepts, like those used in the United States, have not been
incorporated in the contracting process. For design-build projects, only preliminary design
(approximately 20 percent), including baseline geotechnical information, utilities, and land
acquisition information, is completed by the owner; but this information is provided to the
contractor “for information only.” The baseline geotechnical information is developed by a
consultant retained by the MTO, and contractors are required to submit the design codes