{"id":13567,"date":"2023-02-26T06:01:05","date_gmt":"2023-02-26T14:01:05","guid":{"rendered":"https:\/\/essential.construction\/news\/now-is-not-the-time-to-shoulder-more-risk-in-construction-mollenhauer\/"},"modified":"2023-02-26T06:01:05","modified_gmt":"2023-02-26T14:01:05","slug":"now-is-not-the-time-to-shoulder-more-risk-in-construction-mollenhauer","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/now-is-not-the-time-to-shoulder-more-risk-in-construction-mollenhauer\/","title":{"rendered":"Now is not the time to shoulder more risk in construction: Mollenhauer"},"content":{"rendered":"

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Over the next 12 to 24 months, Ontario will continue to see growth, but if buyers of construction are waiting for prices to come down, they may be disappointed, says John Mollenhauer, president and CEO of the Toronto Construction Association (TCA). <\/span><\/p>\n

\u201cIf you were going to characterize the last 12 months in construction, there has been a tremendous volume of work out for tender or calling proposals, but a great many projects in the last six or eight months have not been awarded.<\/span><\/p>\n

\u201cThis is either because the low number in a tender comes in significantly above what they believed it was going to cost because their budgets often are out of date or not inclusive enough, but also because buyers of construction seem to be under the misguided notion that prices will probably come down,\u201d said Mollenhauer, who recently hosted the TCA\u2019s annual general meeting and Best of the Best Awards Feb. 21.<\/span><\/p>\n

When you aggregate all the elements in a large construction project there are some material or service prices that are coming down a little bit but on balance construction prices are not coming down, Mollenhauer explained.<\/span><\/p>\n

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COURTESY TORONTO CONSTRUCTION ASSOCIATION \u2014 Alberici Constructors Ltd. won the Project Achievement Award in the large category for the Humber Treatment Plant, South Plant Upgrades.<\/figcaption><\/figure>\n

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\u201cIf you hit pause as an owner, as a buyer of construction and try to wait out lower prices, you\u2019re very likely going to be disappointed,\u201d he noted. \u201cAll you actually achieve in that process is delaying your project. You don\u2019t actually very often see any savings. Even if there are savings what owners haven\u2019t wrapped their heads around is you can create the opportunity for savings, you can create indexes for things so that if the price goes down then the buyer of construction is the beneficiary of a lower price but it has to be quid pro quo.\u201d <\/span><\/p>\n

There has to be some give and take between the buyer and the contractor, he added.<\/span><\/p>\n

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COURTESY TORONTO CONSTRUCTION ASSOCIATION \u2014 Brook Restoration Ltd. won the Project Achievement Award for the Dufferin Transfer Station, Tipping Floor and Push Walls project. The project won in the small category.<\/figcaption><\/figure>\n

\u201cOwners want their cake and eat it too,\u201d Mollenhauer said. \u201cThey want a lower price on that component but they\u2019re not offering any protection if it goes the other way. That\u2019s one of the reasons why the industry is so reluctant to share any savings is there is no protection if it goes the other way. They\u2019ve been burned so often in recent years.\u201d<\/span><\/p>\n

There are also a lot of moving parts in the industry at the moment which are impacting construction including labour shortages, price volatility and carbon emissions, greening and the war in Ukraine.\u00a0 <\/span><\/p>\n

\u201cIt\u2019s very difficult for economists and forecasters to accurately predict what the next 12 or 18 months might look like so now is not the time to shoulder more risk, now is the time to mitigate risk, now is the time to be very careful moving forward,\u201d Mollenhauer said.<\/span><\/p>\n

To better serve its members, over the last year the TCA has added a <\/span>live chat feature on its website which offers real time assistance with questions on these very challenges. TCA has also increased paid advertising opportunities for its members.<\/span><\/p>\n

\u201cIt\u2019s our job to find the most effective way to serve our members and to help the industry,\u201d said Mollenhauer. \u201cThe industry has to evolve because of the way it\u2019s changing and so do we. We\u2019re starting to recognize that we have to challenge the status quo and constantly be looking to improve how we serve our members.\u201d<\/span><\/p>\n

During the AGM it was announced Jeff Murva, president of J Murva Consulting, would stay on as TCA chair.<\/p>\n

This year\u2019s Best of the Best Awards were presented to extraordinary and very deserving recipients, Mollenhauer said.<\/span><\/p>\n

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The winner of the <\/span>Donald P. Giffin Construction Industry Achievement Award<\/span> was <\/span>Craig Lesurf of Gillam Group. With over 35 years of experience, <\/span>Lesurf sits on The Construction Institute of Canada (TCIC) Professional Development Committee; is the honourary chairman of the TCIC National Student Bid competition; former chair of the George Brown College Construction Management and Trades Program Advisory Council; sits on the executive board of directors at the TCA; is a past chairman of the TCA and past chair of its General Contractors Section; sits on the OGCA executive board of directors; and is an industry safety advocate including acting as chairman of the of the OGCA Safety Committee and chairing\u00a0the League of Champions. <\/span><\/p>\n

Lesurf said it was an honour to receive the award.<\/span><\/p>\n

\u201cIt\u2019s a great honour to be nominated as well as to win,\u201d said Lesurf, thanking his family for their support. \u201cWhen I was younger I got involved and I realized that I wanted to do things to make a difference because you either complain or you make a change.\u201d<\/span><\/p>\n

He added, \u201cI got involved in a lot of organizations and over the years I have contributed to a number of these organizations\u2026because if you want to influence the outcome you need to get involved, so I decided long ago that I would be part of that.\u201d <\/span><\/p>\n

Other TCA Best of the Best winners include:<\/span><\/p>\n