Procurement Ombud Urges Use of Mediation Services to Address Issues in Administration of Federal Construction Contracts
News release
The Office of the Procurement Ombud (OPO) released a new research study under its Knowledge Deepening and Sharing initiative, examining recurring issues related to the administration of federal construction contracts.
Over the past few years, OPO received numerous complaints from procurement stakeholders about issues related to the administration of federal construction contracts. OPO launched this research study to identify the underlying causes of these issues and to provide practical recommendations for improving contract administration practices.
Some of the common issues raised include poorly defined scopes of work, inconsistent use of standard contract documents and a lack of clarity and effectiveness of substantial performance clauses and inadequate dispute resolution mechanisms. These issues disproportionately affect small and medium-sized enterprises (SMEs), often leading to project delays, cost overruns, and disputes. Ultimately, they undermine the fairness and efficiency of federal construction projects and jeopardize the achievement of best value for Canadian taxpayers.
Contract administration plays a critical role in preserving the value established during the contract award process. Effective administration ensures proper stewardship of taxpayer dollars and helps deliver the infrastructure Canadians rely on—on time and on budget.
As the only federal organisation mandated to investigate and mediate issues related to the administration of construction contracts, OPO is encouraging federal departments and suppliers to use its Alternative Dispute Resolution (ADR) services. These services offer a timely, cost-effective way to resolve disputes early and keep construction projects on track.
Quotes
“My office has seen a growing number of supplier complaints about the administration of construction contracts. Improving the administration of these contracts—often high in dollar value—is essential to avoiding delays and cost overruns, and to ensuring that Canadians get good value for their money.”
OPO is here to help - Our ADR services provide a practical, cost-effective way to resolve disputes early and keep construction projects moving forward.”
Alexander Jeglic
Procurement Ombud
Quick facts
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The Office of the Procurement Ombud (OPO) was established to promote fairness, openness and transparency in federal procurement.
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This study on construction contract is the 14th publication under OPO Knowledge Deepening and Sharing initiative launched in 2018 to provide better understanding of key issues in procurement.
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OPO has received written complaints and requests for dispute resolution on construction contracts, which have accounted for 89 cases and 155 issues between 2020 and 2024.
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As the Canadian International Trade Tribunal (CITT) does not have the mandate to deal with contract administration issues, the Office of the Procurement Ombud is the only federal organization mandated to resolve disputes that occur during the administration of federal contracts through Alternative Dispute Resolution (ADR).
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OPO can provide mediation services with respect to a dispute on the interpretation or application of the terms and conditions of a contract.
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Alternative dispute resolution (ADR) has increasingly become common in construction contracts, as an alternative to litigation.
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Media Inquiries
Office of the Procurement Ombud
Phone: 613‑947‑9755
Email: MediaBOA.OPOMedia@boa-opo.gc.ca