Item - 2014.AU16.17
Tracking Status
- City Council adopted this item on July 8, 2014 without amendments and without debate.
- This item was considered by the Audit Committee on June 27, 2014 and adopted without amendment. It will be considered by City Council on July 8, 2014.
AU16.17 - Cost Benefits of Extended Warranties for Construction Projects Are Unknown
- Decision Type:
- ACTION
- Status:
- Adopted on Consent
- Wards:
- All
City Council Decision
City Council on July 8, 9, 10 and 11, 2014, adopted the following:
1. City Council request the City Manager to review the costs and benefits of the standard use of a two-year warranty period in construction contracts.
2. City Council request the City Manager to standardize procedures for warranty administration. Policies and procedures should hold construction contract project managers responsible for tracking and monitoring construction performance bonds, warranty periods, inspections and defects requiring repair.
3. City Council request the City Manager to develop warranty documentation standards and reports to improve information tracking and communication between staff.
4. City Council request the City Manager to review technology currently available to improve warranty administration and communication Citywide.
Background Information (Committee)
https://www.toronto.ca/legdocs/mmis/2014/au/bgrd/backgroundfile-70618.pdf
AU16.17 - Cost Benefits of Extended Warranties for Construction Projects Are Unknown
- Decision Type:
- ACTION
- Status:
- Adopted
- Wards:
- All
Committee Recommendations
The Audit Committee recommends that:
1. City Council request the City Manager to review the costs and benefits of the standard use of a two-year warranty period in construction contracts.
2. City Council request the City Manager to standardize procedures for warranty administration. Policies and procedures should hold construction contract project managers responsible for tracking and monitoring construction performance bonds, warranty periods, inspections and defects requiring repair.
3. City Council request the City Manager to develop warranty documentation standards and reports to improve information tracking and communication between staff.
4. City Council request the City Manager to review technology currently available to improve warranty administration and communication Citywide.
Origin
Summary
The Auditor General’s Audit Work Plan included a review of City construction contract warranties. This review was selected due to the significant amount of funds involved and previous Auditor General reports identifying deficiencies in construction project warranty tracking and follow-up.
This report provides four recommendations which will strengthen controls over construction contract warranties. The implementation of the four recommendations included in this report will improve warranty and performance bond tracking, and provide information related to the cost effectiveness and benefits of construction project warranties and performance bonds. Potential cost savings may be realized by reducing the warranty period on certain construction projects from two years to one year.
Background Information
https://www.toronto.ca/legdocs/mmis/2014/au/bgrd/backgroundfile-70618.pdf