Ontario Construction News staff writer
Ottawa’s leading general contractors are grappling with a complex web of project risks, cautiously exploring the transformative potential of Artificial Intelligence (AI), and managing persistent supply chain volatility exacerbated by tariffs, all while emphasizing the critical need for clear communication and industry collaboration.
These themes dominated the General Contractors Leadership Panel at the Ottawa Construction Association (OCA) symposium last Wednesday (April 16). The discussion featured insights from Hubie Splinter (president, Graebeck Construction), Nathan Stewart (vice-president of operations, EllisDon), Allesandro Guarna (Vice-president finance, McDonald Brothers Construction), and Travis Grimes (vice-president, Laurin Construction), moderated by Sean Lundy (president, Lundy Construction).
Assessing and mitigating project risk
Choosing the right projects and understanding inherent risks emerged as paramount concerns. Nathan Stewart of EllisDon stressed a meticulous approach: โWhen we’re assessing an opportunity… we’re looking at the contract model (and) all the information that’s readily available… it’s very important that we are very detailed and meticulous in understanding precisely what those risks are.โ This involves identifying potential pitfalls like onerous supplementary general conditions (SGCs) or liquidated damages clauses. EllisDon adheres to a โno bad workโ philosophy, making informed decisions about project pursuits.
Travis Grimes of Laurin Construction added that risk assessment includes evaluating overall partnerships, strategic fit, project experience leverage, available manpower with the right skills, experience with the consulting team, and the client’s ability to pay.
Hubie Splinter, president of Graebeck Construction, described a formalized โgo/no-goโ process to reach decisions quickly. He considers client selection one of his biggest responsibilities. โI consider probably one of the biggest responsibilities I have in the company is to make sure I choose the right client for us… if I make a wrong decision, there’s going to be a massive impact on the staff. The wrong client is going to directly impact the quality of life of the people working in the company.โ He advised trusting one’s instincts: โFollow your gut.โ
Allesandro Guarna of McDonald Brothers Construction noted that overly complex SGCs are an immediate red flag. โIf the SGC are, like, three times the size of a regular contract, your first gut instinct is going to be like, okay, which lawyer got all of this… and really… balance all of the conditions of the owner’s favour away from the GC.โ He emphasized the need to evaluate the potential impact and confirmed his firm has turned down otherwise suitable projects, like affordable housing developments, due to irreconcilable contract terms. โIt’s important that we do make those critical decisions and not just accept… work for the sake of work.โ
Collaboration and advocating for contract fairness
When faced with unfair or one-sided contract terms, panelists stressed the importance of pushing back and leveraging industry associations. โIf we sign contracts that are not fair, that’s putting the company at risk,โ Splinter said. He urged the industry to โkeep getting smarter… in terms of being clear and communicating what is fair and acceptable to us.โ He outlined the process where concerns about SGCs are routed through the General Contractors Association of Ottawa (GCAO) for discussion before bids close.
Grimes echoed this, stating, โAs an industry, we need to come together with the associations … and advocate for fairness … That’s how we can drive some consistency across the board and create a level playing field.โ Failing to do so, he warned, leads to inflated pricing as contractors build risk premiums into bids.
Guarna added that consultants, like architects, can also be key allies, sometimes flagging problematic SGCs to the OCA before tenders are even issued.
Effective communication with owners is crucial. Stewart advised framing discussions around mutual value. โIf we’re communicating with our clients and explaining to them the effects and consequences and how it affects them… that’s a meaningful way to communicate… What does this mean for you? And not just what does it mean for us?โ
Splinter provided an example regarding liquidated damages, asking clients whether they prefer the project team focuses on solving problems or on defensively papering files.
AI in construction: Cautious exploration
The potential impact of AI generated significant discussion, with contractors exploring its uses while acknowledging the industry’s traditionally slow technology adoption.
Splinter is actively experimenting, calling AI tools like ChatGPT โan extension to my brainโ. He uses it for tasks like initial contract reviews and is exploring construction-specific tools like Document Crunch for contract analysis and Buildots, which uses 3D photometrics (like Matterport or OpenSpace) to track site progress against schedules. He sees AI’s value in accelerating analysis to make better decisions based on data, while stressing it doesn’t exclude the human element.
Grimes expressed optimism, particularly for document administration efficiencies, and believes AI will play a major role in boosting productivity and streamlining pre-construction. โI just see nothing but positives in terms of AI in our industry.โ
Stewart, while self-admittedly not an early adopter, recognized AI’s inevitability and potential. EllisDon has a dedicated group exploring technologies and has used tools like Buildots, finding them โenormously powerfulโ for rapid data analysis. He emphasized AI should โaugment and support our decisions,โ not make them, and highlighted the untapped value in leveraging the vast amounts of data construction companies possess.
Guarna linked AI directly to competitiveness: โ…what better way to be low bid and to be able to do more with less?” He envisioned AI automating tasks like quantity take-offs in estimating, processing accounts payable invoices, and managing submittal logs.
The discussion also touched upon the rapid pace of AI development, the difficulty in standardization, and the critical โhuman componentโ in ensuring successful adoption and managing the transition for staff.
Tariff turmoil and supply chain strain
The ongoing uncertainty surrounding tariffs and their ripple effects on supply chains remains a significant headache. Stewart emphasized starting from โa point of understanding and planning,โ including direct conversations with clients about contract relief mechanisms and substantiation requirements. Maintaining a constant feedback loop with clients and sub-trades is essential.
Splinter described the constant news cycle as โGroundhog Dayโ, creating uncertainty that hinders the industry. He noted some success in mitigating exposure by sourcing Canadian-manufactured alternatives during early project stages where possible.
Guarna highlighted communication as the only real strategy: โVery, very upfront… as often as you can and as clear as you can.โ This applies throughout the construction chain, from suppliers warning of price changes or delays (even indirect ones) to GCs relaying information promptly to owners. The goal is cost certainty, but achieving it is difficult when the situation is constantly shifting. Early procurement and pre-payment for critical items can help but aren’t always feasible. Timely information allows for crucial discussions about alternatives or redesigns if products face long delays or significant cost increases.
Grimes observed that while tariffs create immense volatility, they are also fostering closer communication within the Canadian industry. Transparency and collaboration are key to navigating the day-to-day challenges.
The panel painted a picture of an industry navigating significant external pressures through diligent risk management, strategic adoption of new tools, and fundamentally, open communication and strong relationships within the Ottawa construction community.