BCA Chairman Says Contractors Must Not Become Complacent

Now that the economy is turning around contractors must not allow themselves to become complacent again about issues affecting The Bahamas' construction industry, Terrance Knowles, Chairman of The BCA told members of The Rotary Club of New Providence recently.

"Right now the response from the government is very good. They understand and actually appreciate what the construction industry does and the numbers of people who we employ. We attract the people they want to get off the streets and I think they realize that�we've made such great inroads that we must continue the charge. Now the economy is turning around and contractors are busy again there's a tendency to become complacent but we've made too much progress and we cannot lose credibility at this stage," Mr. Knowles said.

Thus far he said the BCA's efforts have led to an amendment to the Business Licence Act which ensures that foreign contractors awarded a contract must pay a Business Licence of 1% of a contract's value at the time of the award to ensure that government gets that revenue.

Mr. Knowles explained that the BCA was founded during the 1960's by contractors who felt threatened by increasing numbers of foreign contractors from The United Kingdom. Though dormant for many years the Association was re-energized in the late 1990s and has a total active membership of 70 contractors at this time.

He estimated that there are currently more than 800 contractors in The Bahamas and said the general perception of Bahamian contractors is that they are unprofessional, unethical and lacking in competency, expertise and integrity. "That's the general perception and to a large extent that is true. The Bahamian Contractors' Association acknowledges that, accepts that fact and is striving to change that perception so we're very selective about the contractors who enter our association," he said.

According to Knowles contractors applying to join the BCA must have sufficient and relevant years experience in their trade and must have demonstrated expertise through customer references. They must also be financially stable, must possess a current business license and be up to date in their national insurance payments. As the voice of the construction industry of The Bahamas Mr. Knowles said there are a number of issues The BCA has focused on over the past several years and continue to work on. He said the BCA's agenda includes: 1. Developing a licensing programme through the enactment of the Contractors' Bill, 2. Establishing better relations with current and new developers through the institution of a Construction and Development Advisory Committee, 3. The amalgamation of a Preferred Contractor's List for Mortgage Houses, 4. The Establishment of local chapters in Grand Bahama and some of the major Family Islands, for example, Abaco and Exuma; and 5. Encouraging a Policy Statement by the Government on a Local Preference Act.

Mr. Knowles explained that a proposed Contractors' Bill which includes provisions for the licensing of the entire construction industry has been with successive Governments for more than 20 years now, however, he said there is a lack of motivation for any Government to enact this bill because of the complacency of contractors and The Bahamian public in applying pressure for the bill to be enacted. He further stated that governments may not be motivated to enact the bill because it may perceived as nationalistic, protectionist and excluding foreign participation in developments.

"The BCA has undertaken of its own efforts to say regardless of whether the Government enacts this bill or not we will license our own members. We are in the process of developing a licensing programme for contractors that is based upon the State of Florida's Programme," Mr. Knowles said. He explained that the licensing programme will provide assurance to developers and homeowners that BCA contractors are qualified and certified to meet their obligations in the same way that companies such as Sears and Home Depot pre-qualify and stand behind their own contractors and tradesmen. When the Contractor's Bill is eventually enacted he said the BCA's licensing programme will more than likely be adopted by the Government.

With regard to its position on foreign contractors Mr. Knowles said the BCA is no longer perceived as the "Bitchin Contractors Association" that wants to kick all foreign contractors out. "Although some of our members still feel the same way that has changed somewhat where we recognize that we, as Bahamian contractors, must compete on the same level as the foreign based contractors. Our concerns, however, are that we must level the playing field and that if foreign contractors are doing business in this country they must operate under the laws of the land, for example, they must pay their business licenses like we all do as business owners, they must pay their national insurances and they should not be allowed to operate out of office trailers that they brought here ten years ago," Mr. Knowles said.

According to Mr. Knowles Bahamian contractors do not have the cost advantages that foreign contractors do and are unable to compete on certain levels, for example, he said foreign contractors have greater access to qualified manpower resources and low interest financing at 3% in the United States and Canada compared with 8 to 9% interest in The Bahamas.

In addition they are able to bring in their operating equipment under leasehold agreements with leasing companies. We, on the other hand, are unable to bring in our equipment under lease agreements. We must pay a bond on them plus the deposits necessary to be left with those leasing companies are so outrageous so you must purchase the equipment yourself. Also because of the cyclical nature of the construction industry expensive equipment may end up sitting idle for months," Mr. Knowles said.

For these reasons he explained that the BCA is in talks with government to level the playing field for Bahamian contractors through a Local Preference Act similar to those enacted in Dade County, Broward County and Palm Beach Country, Florida to protect local contractors from "snow-birders" or contractors who come from the Northeast looking for work. A Bahamian Local Preference Act would put local contractors in a better position to win bids because it would automatically lower a Bahamian contractors' bid by approximately 5-10% ( the cost difference of doing business) thus making them more competitive with foreign contractors.

Another item on the BCA's agenda is to persuade the government to put in a place Construction and Development Advisory Committee that would provide advice to relevant Government Ministries who currently do not have in-house expertise on Construction and Development Matters.

"This committee would comprise the various sectors of the whole decision making industry, for example, the Ministry of Financial Services and Investments, The Ministry of Public Works, Developers, and Members of the BCA. The purpose of this is really to provide the expertise and advice to the government in hopes that they will be in a better position to make decisions to ensure greater participation of Bahamian contractors in these developments that are coming on stream in the near future. The Government has not said yes to this but we are strongly encouraged by their words that this is a possibility to be formulated through the Ministry of Financial Services and Investments," said Mr. Knowles.

(April 2005)