August 21, 2013
Associations support local practices
National associations representing the construction industries in Canada, the United States and Mexico have endorsed a joint position statement dealing with foreign contractors and local practices.
The Canadian Construction Association (CCA), the Associated General Contractors (AGC) of America and the Mexican Chamber of the Construction Industry, have affirmed that construction firms operating in North America should abide by the “local, recommended and prevailing business practices” established by the industry in the country in which the construction project is located.
“We also recommend that our respective member firms when operating outside their home country consider joint venturing and subcontracting with local member firms whenever appropriate,” the associations said in their statement.
The one-page document was signed by CCA chair Frank Rizzardo and the presidents of the other two associations at a recent meeting in San Francisco of the North American Construction Federation. The organizations have been meeting annually since 1995 to discuss items of common concern.
The statement notes that each of the associations develops and promotes the use of ethical business practices by its member firms when conducting the business of construction in their home countries.
These practices include:
Serving clients and customers with honesty and integrity;
Treating competitors, subcontractors and suppliers in a fair and even-handed manner;
Conforming to local labour and safety laws and established and accepted prevailing industry practices associated with procurement, contracting and payment, including the use, wherever feasible, of standard industry contract forms.
In an interview, CCA president Michael Atkinson said the impetus for release of the statement came from the Mexican association. A number of European contractors, and particularly Spanish firms, have entered the Mexican market in recent years to bid on public works projects.
“They (the Mexicans) haven’t been exactly thrilled with the manner in which they have been treated or with how their own government has responded,” Atkinson said. “I think they are trying to use this (statement) as a bit of a tool in their lobby efforts with their own government — to show that the Americans and the Canadians agree that these are some of the fundamental principles (that should be observed).”
Atkinson said a senior Mexican government official witnessed the signing of the statement at the meeting. In Canada, foreign competition “is beginning to become a bit of an issue,” Atkinson said.
“I think what is upsetting to the industry is when large international firms come into a market and impose their way of doing business, not abiding by local practices or stripping away the use of local contractors and subcontractors.”
In the United States, where construction investment still hasn’t recovered to pre-recession levels, foreign competition appears to be less of an issue, Atkinson said.
Other items on the agenda for discussion at the Aug. 1 to 3 meeting included public-private partnerships, Building Information Modeling, lean construction, online procurement, and prompt payment legislation.
In the U.S., Congress drafted legislation mandating prompt payment in contracts with the federal government more than 30 years ago.
Legislation has also been enacted at the state level.
“Because of the Ontario bill, we asked them (AGC officials) how successful prompt payment legislation has been,” Atkinson said, noting that the U.S. association’s experience with such legislation has primarily been at the federal level.
“I think, if nothing else, they agreed that the legislation has had more of a positive than negative impact.”
Next year’s meeting of the North American Construction Federation will be held in the city of San Miguel de Allende in Mexico.
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