Policy Letter No. 1 –
Improving Time and Cost Performance of Construction Projects in Ontario Through Innovative Project Controls Funding

Ontario's infrastructure investments ultimately depend on thousands of decisions made during construction. When projects encounter cost, schedule, risk or change pressures, taxpayers may bear greater costs, communities may wait longer, Contractors may face additional commercial pressure and public confidence may be affected.

Project Controls are the people, processes, systems, data, technology and professional practices used to establish project baselines, measure progress, forecast cost and schedule outcomes, manage risk and change, maintain reliable project records and provide decision-makers with timely information.

Yet project-specific Project Controls are often embedded within the Contractor's construction price and treated as overhead. Competitive pressure can create an incentive toward a minimum compliant control environment, even though both the Owner and Contractor will rely on that environment throughout construction.

When project-specific Project Controls scope and costs are included within the competitively evaluated Construction Bid Amount, the Owner may have limited visibility into the staffing, systems, reporting, analytics, data arrangements, integration and other capabilities that will be used to understand and manage project performance.

Public Owners already pay for Project Controls. The policy question is whether the project-specific capability and cost should be sufficiently visible for the Owner to understand what it is purchasing and approve an approach suited to the project.

This framing reflects the final distinction between the Construction Bid Amount and the specific Project Controls scope identified in advance for separate development and funding.

Policy Letter No. 1 does not propose changing how the construction Contractor is selected.

It proposes changing how the project-specific Project Controls scope and budget are developed, approved and funded.

Bidders would continue to compete through the Owner's disclosed construction procurement criteria, including price, capability, experience, technical compliance and other stated requirements.

During the competitive stage, bidders would only confirm that they understand, accept and can comply with the disclosed Project Controls Execution Plan (PCEP) process. They would not be required to incur the cost of preparing detailed PCEP options while competing for the construction contract.

After the Preferred Bidder is selected, it would prepare at least two compliant PCEP options:

The Owner would evaluate the options against disclosed requirements and criteria, require reasonable revisions where necessary and approve a final PCEP and corresponding Project Controls Budget. The final PCEP could consist of one submitted option or an agreed combination of elements, provided that all mandatory requirements are satisfied.

The approved project-specific Project Controls scope and budget would then be separately identified, substantiated, funded, monitored and auditable.

More visibility for the Owner

No dilution of Contractor accountability

The Contractor would remain responsible for implementing and maintaining the approved PCEP and for construction means and methods, safety, quality, schedule, cost, performance and contractual compliance. Ordinary estimating, construction planning, supervision, internal management and internal controls would remain within the Construction Bid Amount.

Creating Room for Innovation

Construction projects are different. Their risks, interfaces, constraints, information needs and delivery challenges are different.

Yet when Project Controls are treated primarily as overhead and competitive pressure rewards minimum compliance, there may be limited incentive to invest in better methods, systems, analytics, integration, automation or technology.

The proposed PCEP model creates a structured opportunity for the Preferred Bidder to propose project-appropriate improvements after selection, while maintaining the mandatory Project Controls requirements established for the project.

This can create a positive cycle:

Greater transparency → room for better Project Controls → innovation in methods, systems and technology → better information and decision-making → stronger project delivery → lessons for future projects

Project Controls innovation and project-delivery innovation can reinforce each other.

What Ontario is Being Asked to Do

Stoneboy is asking the Government of Ontario to review the policy concern, engage affected stakeholders and develop an Ontario-appropriate framework for more transparent and intentional Project Controls funding.

A time-limited interministerial and stakeholder working group could examine the procurement, legal, commercial, technical, data, governance and implementation considerations and help develop an appropriate framework.

When suitable projects and implementation capacity are available, Policy Letter No. 1 recommends testing the model through a controlled program of up to 10 suitable Ontario public-construction projects.

The pilots would allow Ontario to:

• Establish appropriate baselines;
• Measure implementation costs and project outcomes;
• Obtain feedback from Owners and Contractors;
• Refine the framework; and
• Independently evaluate the results before considering broader implementation.

Ontario does not need to commit to province-wide implementation in order to examine the idea. Policy review, stakeholder consultation and framework development can begin before the first pilot project is selected.

Measure before scaling

Evidence before broader adoption

The pilot is therefore an evidence-building pathway, rather than an all-or-nothing condition for considering the policy proposal.