b'WASTEWATERObviously, a thorough review is sorelyment for bonds is still happening evenand intervention could have prevented needed, and one of the key questions thatasprojectsizesandvaluesincreasethe worst impacts of this default.should be answered is: Why wasnt thethough bonds often cost only a fractionOther provinces have enacted legis-project protected by surety bonds?of a percent of contract value. Riskinglationtorequirepromptpayment AcrossCanada,governmentsatallmillions for small savings! tocontractors.InOntarioandNew levelstypicallyrequirethatpubliclyHopefully,thereviewandauditofBrunswick, these measures are supported fundedconstructionbeprotectedbythis project will be carried out with arms- by a requirement for all public construc-performance and payment bonds in thelength integrity and uncover how such a amountof50percentoftheprojectkey infrastructure project could spin sotion to be protected by performance and value. A performance bond protects thewildly out of control. We believe thatpayment bonds in the amount of 50 per governmentandtaxpayersbyguaran- suretyprequalification,ongoingmoni- cent of the project value. Its time that teeing that the work will be carried outtoring and early problem identificationBritish Columbia followed their lead.inaccordancewiththetermsofthe contract. A payment bond guarantees that billsfromsubcontractorsandsuppliers willbepaidinfull.Shouldtheproject contractor default, the bonding company willactunderthebondstohavethe projectcompleted,absorbthefinancial shortfall and pay the bills of the unpaid trade subcontractors and suppliers.Anoften-overlookedfunctionof surety bonds is the bonding companys up-front diligence to thoroughly evaluate everyproposalandcontractorbefore green lighting and putting its faith (and its money) behind the deal. Surety industry statistics over the decades show that this ounceofpreventionhasbeenworth tonsofcure.Anunbondedcontractor is10timesmorelikelytofailthanitsbonded counterpart.Thelackofabondisanespecially big deal as B.C. still doesnt have prompt paymentlegislationtoensurethat paymentsaremadeontime.Delayed paymentsareamajorissueinB.C.s construction sector, with most contrac-tors reporting not being paid on time, and 62 per cent reporting at least one occa-sion where they havent been paid at all for work completed in the past year.Its not the large multi-national compa-nies that are most severely impacted. In B.C., 92 per cent of construction industry employers are small businesses with 20 employees or less. This uncertainty aboutTRS BUILDING being paid slows down construction andENVELOPE CORP.ties up resources in contract disputes that would be better used building the housingTOMTAR ROOFINGand infrastructure the province needs. & SHEET METAL LTD.Sadly, Metro Vancouver isnt the first public owner to learn the hard way thatUnmatched Industry Experience.adefaultcanbringaboutcatastrophic results, even when the contractor is tooServing the Interior & Western Canadabig to fail. And yet, waiving the require-www.rcabc.orgl11'