Presentation to MMCD/MED AGM 25 November 2011 Canadian Internal Free Trade Agreements The Unintended...
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Transcript of Presentation to MMCD/MED AGM 25 November 2011 Canadian Internal Free Trade Agreements The Unintended...
Presentation toMMCD/MED AGM
25 November 2011
Canadian Internal Free Trade AgreementsThe Unintended Consequences for
Consulting EngineersBy
Chris Newcomb on behalf of
Consulting Engineers of BC
Unintended Consequences in a NutshellMore bureaucracy in procurement,
Adversarial client relationships,
Poor taxpayer value,
Compromised public safety,
Discrimination against engineers,
Decline of locally-based expertise,
Weaker consulting engineer industry.
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Presentation Outline
• History and Purpose of Trade Agreements,
• Why Consulting Engineers have a problem with Trade Agreements,
• Four unintended consequences of Trade Agreements,
• Six myths about Consulting Engineering.
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History
1995 Agreement on Internal Trade (AIT) 2007 Trade Investment & Labour
Mobility Agreement (TILMA) 2010 New West Partnership Trade
Agreement (NWPTA)
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Purpose
To remove trade barriers through
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Investment liberalisation – we
support!
Labour mobility provisions – we
support!
Procurement provisions for
government-funded work – we
oppose!
NWPTA (Part V – A & C)
Doctors & Lawyers exemptEngineers
not exempt “Services & investments
pertaining to water” exempt
AIT Engineers permanently exempt (Annex 502.1B)
TILMAEngineers exempt for 2 year transition period
Exemptions from Procurement Provisions
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What is Qualifications Based Selection (QBS)?
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International Best Practice for selecting professional consultant
Mandated law in USA and Quebec Enshrined in InfraGuide program of
Canadian municipal best practices Three step process:
1. Shortlist three best-qualified firms2. Select best-quality proposal3. Negotiate fair priceProblem: NWPTA inhibits QBS
How NWPTA Procurement Inhibits QBS – Part 1
Obliges client to broadcast opportunities,
Forbids rotation system,
Forbids arbitrary shortlisting,
Forbids consideration of local knowledge.
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How NWPTA Procurement Inhibits QBS – Part 2Forbids consideration of
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Previous experience with client Timely access to site & approval
agencies Local project knowledge, such as:
Soil conditions & underground utilities Drainage & environmental conditions Snow & wind loads Traffic and safety Socio-economic considerations Local codes & practices
Any other quality measure that infers location
Why NWPTA Procurement Inhibits QBSDoesn’t recognize that:
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Most engineering is site-specific, Engineering is 2% of life-cycle cost,
but influences 100% of life-cycle cost,
Rapid site access enhances problem resolution and public safety,
Professional engineering is not a
commodity.
Broadcasting of Requests for Proposals (RFP’s),
Unlimited numbers of proposals,
Increased cost to produce, Increased cost to review, Same quantity of work awarded.
First Unintended Consequence of NWPTA Rise in procurement costs
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Reduced public safety
Adversarial client relationships Lack of innovation Poor life cycle value
Clients overwhelmed by quantity of proposals
No resources to apply QBS Cheap engineering resulting in:
Selection by lowest fee
Second Unintended Consequence of NWPTA
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• Save On Foods• Laval Bridge
Writing more proposals, and Struggling with adversarial client
relationships Instead of building the province
Waste of talent Our best engineers are:
Third Unintended Consequence of NWPTA
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Small regional firms can’t compete in major urban centres,
Large urban firms taking larger share of regional work,
Outcome: small regional firms are in decline,
Outcome: less local expertise available for small, urgent or emergency assignments.
Fourth Unintended Consequence of NWPTADecline of consulting engineering in small communities
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Just like lawyers, Just like doctors, Just like engineers
are exempt from AIT.
The Solution?
Exempt engineers from NWPTA procurement provisions!
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Wrong! Cronies prosper in a
low bid environment, Cronies lose out in a
transparent QBS environment.
First Myth Supporting NWPTA Status QuoMunicipal officials will award projects to their friends
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Wrong again!! CEBC Memorandum of Agreement
proves 100% oppose procurement provisions,
CEBC & APEGBC do support mobility provisions,
Hence the myth?
Second Myth Supporting NWPTA Status QuoThe Consulting Engineers support NWPTA
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Wrong again!!! CEBC represents firms of all sizes in
all locations, CEBC is trying to protect:
The integrity of professional procurement,
Public safety, Taxpayer value.
Third Myth Supporting NWPTA Status QuoCEBC is trying to protect “local” consultants
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Wrong again!!!!NWPTA catchment area has about 70,000 P. Eng.’sMost specialize in one discipline, not othersNWPTA low-bid environment leads to:
Economic pressure, Lack of innovation, Lack of quality, Short cuts, Compromised value and safety.
Fourth Myth Supporting NWPTA Status QuoP. Eng. seal guarantees project value & public safety
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Wrong again!!!!!In which other industry is:
Local knowledge so important to quality of service?
Cost of service such a small percentage of life-cycle cost?
Timely site access so important to public safety?
Fifth Myth Supporting NWPTA Status QuoExemption for engineers will open flood gates for other industries
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1. Win first project using low price2. Impress the client3. Win subsequent work on quality
Wrong again!!!!!!Clients that hire you using low price, will hire someone else using low price on the next project.
Sixth Myth Supporting NWPTA Status QuoNWPTA allows firms to grow using low-price strategy
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