MHCA acknowledges it is located on Treaty One land and the homeland of the Metis Nation

Winnipeg fuel cost adjustment clause needs work: Executive Committee

The MHCA Executive Committee has asked that the association seek discussions with the City of Winnipeg senior Administration on the scope of a proposed fuel-cost adjustment clause for roadbuilding contracts.

Discussions regarding the cost adjustment clause were initiated in March, upon dramatic fuel price hikes triggered by the Russian invasion of Ukraine February 24. It is being proposed for inclusion as part of general conditions of Public Works street renewal contracts.

However, the proposal from the department would see the clause apply only to roadbuilding activities, not all components included in the road renewal contract, such as sewer and water works.

The clause would be triggered on fuel price hikes or reductions of 15%; the adjustment would be based on a fuel factor of 2.7% of the entire value of roadbuilding activities in the contract.

At the Executive Committee May 25, the MHCA was instructed to press for all price adjustment for all components of work within the contract. Further, MHCA has requested that the Water & Works department also adopt a fuel cost adjustment clause in its contracts; to date Water & Works has said such a clause is not contemplated.

MHCA was of the understanding, through the bulk of the discussions since February, that Public Works’ approach was to include all components of work in the calculation of the adjustment, but on May 24 received notice it would not apply to the Water & Water portion.

“We are disappointed as this has been the subject of extensive discussions for the better part of three months, now,” MHCA President Chris Lorenc said. “The genesis of the discussion was the fact bid-hourly snow removal work being done in late February and in March was priced at fuel costs in effect well in advance of the Russian invasion. There was no way anyone could have contemplated the price hikes seen in February and so could not bid accordingly.”

The City has yet to discuss how the bid hourly work will be accommodated.

“We have responded to both Public Works and Water & Waste, and now will contact senior City administrators.”

Similarly, discussions with Manitoba Transportation and Infrastructure regarding retroactivity of its fuel cost adjustment clause are ongoing.

The fuel cost adjustment clause consumed much of the discussion at the Executive Committee meeting. Other issues on the table included:

  • A meeting with MTI senior officials will be held in early June to discuss the highways capital program budget, tendering, contract award timing, timely progress and final payment and formal change order processes.
  • MHCA appeared at the Winnipeg Council’s Executive Policy Committee meeting May 18 to speak to the IRPW Committee request to fund about $7.8 million of traffic engineering improvement projects from road renewal budgets. MHCA President Chris Lorenc asked EPC to preserve the intent and integrity of the road renewal program, and the dedicated reserve through which it is funded annually.
  • Construction Industry Wages Act: the newly proposed increases to the construction industry minimum wages will go to a 45-day consultation process; MHCA and others within the construction industry are requesting the proposed increases be phased in starting in September of 2022, and then rise again May 1, 2023, and May 1, 2024.
  • The MHCA, as part of a social enterprise and construction industry working group, has submitted its recommendations to the City of Winnipeg’s proposed Social Procurement Action Plan. The seven elements the MHCA has pressed for, are:
    • The Action Plan and the tools that give it effect in procurement practices be formed and refined with the full consultation of industry
    • Bidders be recognized for their current HR practices and engagement with industry training and recruitment among equity groups
    • Community benefit agreements be considered and reviewed on a project-by-project basis, for appropriateness and project-specific elements
    • There be an alignment with private sector pre-employment, education and training activities
    • Tenders continue to be open, fair and transparent
    • Policy and Action Plan development/progress be reported upon to either the Executive Policy Committee or a standing committee of Council, to ensure engagement with political oversight and direction
    • Consultant Buy Social Canada continue in facilitating the development of the Action Plan, through its three-year rollout.
  • Locates by Bell MTS are being provided within 10 days 95% of the time in rural areas and 85% per cent of the time in Winnipeg, the Manitoba Common Ground Alliance heard at its May 24 meeting
    • Bell MTS continues to ramp up resources to ensure timely locate response in construction season 2022
  • MHCA will review industry concerns expressed regarding City of Winnipeg specifications for and testing of cold weather concrete.