b'REPRISAL CLAUSES REPRISAL CLAUSES IN PUBLIC CONSTRUCTION CONTRACTS BY KRISHA RUCHLEWICZ, POLICY ANALYST, OSWCAT here has been a longstanding controversyincreasingly difficult, and the prospect of engaging in amongst purchasers and suppliers within thea dispute resolution process, increasingly likely. The construction industry surrounding the inclu- industry finds itself in the unfortunate and unique sion of reprisal clauses in public procure- position of decreased production and significant ment policies and/or bylaws. Reprisal clausesdelays beyond the companies control, compounded exclude, or permit the exclusion of, suppliersby contractually bound fixed deadlines, legal liabilities from bidding on, or being awarded, publiclyand liquidated damages concerns.funded projects if the supplier is, or has previously been, engaged in litigation with the public buyer. Aggravating these concerns are the threat of reprisal Essentially, these clauses coerce suppliers into makingclauses, which will permit the exclusion of suppliers a choice between 1) exercising their right to accessfrom bidding on public projects if the supplier is, or the courts to resolve disputes on their claims; and 2)has been, engaged in litigation with the purchaser. bidding on future public contracts. Considering manyConsidering there is no recognized standard of claims occur in the ordinary course of business, aprotocols informing firms on how to manage opera-policy which offers public buyers the ability to restricttions with sufficient regard to public health during suppliers, in any litigation with the public buyer, froma global pandemic outbreak, many suppliers are bidding on future projects, without recognizing theanticipating the need to utilize the courts to resolve merits, or lack therein, of a suppliers previous litiga- their disputes concerning delays and cost increases on tion, is a flagrant violation of public policy. public contracts. However, troublingly, engaging in this dispute resolution process may expose these companies While a discussion regarding public policy concerns,to the risk of potential restrictions with regards to among the many others, is beyond the scope of thispursuing future public projects.article, the Association offers the following comments on the way in which the issues associated with reprisalIt is also noteworthy that many public buyers have clauses are exacerbated by the ongoing effects ofexpressed their expectation that ongoing projects COVID-19. More specifically, production delays andare to remain on schedule through the COVID-19 costs arising from labour-related challenges and supplypandemic, and proponents are expected to take all chain disruptions, as well as changes inadditional and necessary health precautions, while operating rules and necessaryalso complying with the contractual obligations additional precautions associ- in respect of the delivery of the Project. It is for ated with the pandemic,this reason, precisely, that transparent and make complying with theexpeditious access to third-party dispute contractual obligationsresolution post-COVID-19 is particu-in respect to thelarly imperative to ensure fairness to delivery of a Projectall parties.20 H 2 OSWCASpring 2020'