Industry presses for retroactive fuel price adjustment on provincial work
Manitoba Transportation and Infrastructure is including an updated fuel price adjustment clause for work it is tendering now, but MHCA is strongly pressing the department to move on retroactive adjustments on fuel prices bid in projects tendered before the February price spikes occurred.
“We’ve communicated with the senior offices on the importance of seeing those tender bids or awards also recognize that the spike in fuel prices that occurred in mid-February could not have been foreseen,” MHCA President Chris Lorenc said. “It’s only fair the bids or the price of the award be adjusted, as well.”
The department has assured the association it is working on such a proposal.
Meanwhile, the City of Winnipeg Public Works department has forwarded for administration’s approval a proposal to adjust fuel prices on tender bids and awards that have been made to date, for potential adjustment, where work has not year started.
The City proposal would see adjustments made to compensate on costs where fuel prices rise or fall by more than 15%. The City has proposed a fuel factor (of total construction project costs) of 2.7%, based on Statistics Canada data of fuel as a portion of total transportation engineering construction projects over a 10-year period.
The fuel price adjustment clause would not be optional, contractor by contractor, but optin in would see all a contractor’s projects adjusted for price change. Should fuel fall by more than 15% against bid, payment would be due to the City.
MHCA has requested that the City clause become part of general conditions of road building contracts from now on.
As well, the association has sent letter to the City pressing for the Water and Waste department to adopt a similar clause in its contracts.
