Introduction to Public Procurement Council Workshop December 15, - - PowerPoint PPT Presentation

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Introduction to Public Procurement Council Workshop December 15, 2014

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Canadian Public Procurement

• Canada the most litigious Country in the area of

Public Procurement

• 1981 Supreme Court of Canada Decision

– Ontario v. Ron Engineering & Construction Ltd. – Revolutionary impact on the law of tendering in Canada – Created Procurement “Contract A” environment

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The Five Major Implied Duties

• Canadian procurement case law has established

five major implied duties of procuring agencies:

– Duty to run a fair process – Disclosure duty – Duty to reject non-compliant tenders – Duty to award to the winning bidder – Duty to award the contract as tendered

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Brampton’s Purchasing By-law (2012)

• Required by the Municipal Act, 2001
• Alignment with Inter-Government Agreements

– Agreement on Internal Trade (AIT) – Federal Government and Provinces – Ontario and Quebec Trade and Cooperation Agreement

• Adopts Honourable Madam Justice Bellamy’s

Procurement Recommendations from the “Toronto Computer Leasing Inquiry” (MFP Scandal)

• Reflects Current Canadian Public Procurement

Environment

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Purchasing By-law

• Based on 3 over-arching principles

– Fair, Open and Transparent Procurement – Best value for the taxpayers’ dollars – Procurements conducted when there is no internal capacity to deliver (e.g. snow clearing 15/85)

• By-law developed with extensive consultation

– With all departments and Internal Audit – Internal and external legal counsel – Benchmarking with other public sector entities

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Purchasing By-law Principles

• Principles prescribed by the Agreement on

Internal Trade

– Non-Discrimination – Transparency – Fair Acquisition Process – Exceptions (from competitive procurement) – Canadian Content – Language – Confidentiality

• Additional Principles

– Ethical Procurement – “Green” Procurement

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Council Involvement in Procurement

• Council approves Annual Budget
• Any Council input on a procurement must occur

after budget approval and before a procurement process commences

• Council is directly involved and gives approval to

commence a procurement process for a procurement expenditure for:

– All procurements $1,000,000 and greater, and/or – Procurements of community interest, significant risk

• r security concerns

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Council Involvement in Procurement

• Only prior to procurement process
• Due to procurement case law the opportunity

for Council to affect change at the end of a procurement process is very limited due largely to:

• The Duty to Award to the winning bidder, and
• The Duty to Award the contract as tendered
• The outcome of a procurement process

determines the winning bidder

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Procurement Contract Awards

• Staff conducts procurement in accordance with

Purchasing By-law

• Contract award is an administrative process,

adhering to the 5 Implied Duties:

– Duty to run a fair process – Disclosure duty – Duty to reject non-compliant tenders – Duty to award to the winning bidder – Duty to award the contract as tendered

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Reporting To Council

• Comprehensive reporting to Council

– Enables effective oversight – Provides full, transparent disclosure

• On a quarterly basis the report provides summary of

purchasing activities for the previous quarter and cumulative year-to-date activities

• Reporting includes:
• Contract awards
• Consulting contract awards
• Contract extensions
• Single-Sourced contract awards
• Sole-Sourced contract

awards

• Emergency contracts/Purchase

Orders

• Purchasing By-law

non-compliance

• Non-Standard Results
• Disposal of surplus goods and

equipment

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Exclusions From Competitive Procurement

• Direct Negotiated Process

– Exclusions from competitive procurement are consistent with provisions set-out in Agreement on Internal Trade (AIT) – Single-source and sole source procurements:

• Specifically defined by AIT
• Remain subject to the approval limit requirements of

the By-law

• Must be approved by City Council when they meet the

test of:

– $1 million and greater, and/or – Community interest, significant risk or security concerns

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Exclusions From Competitive Procurement

• Definitions

– “Single-Source” means there is more than one source in the open market but only for reasons of function or service

• ne vendor is recommended

– “Sole-Source” means there is only one source of supply

• Exceptions defined in By-law are consistent with the

Agreement on Internal Trade

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Exclusions From Competitive Procurement

• Emergency Procurements

– Must meet the By-law definition of an emergency

• An unforeseeable, serious emergency situation where the

immediate purchase of goods, services or construction is essential in order to maintain a required service or to prevent danger to life, health or property, and

• The goods, services or construction cannot be obtained in

time by means of an open, competitive procurement method

– Chief Administrative Officer or Department Head(s) are authorized to use the direct (emergency) procurement method for any dollar value

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Tie Bids

• When there are two or more identical winning

bids:

– Tie bid language must be consistent with provisions

• f the Agreement on Internal Trade
• Cannot discriminate on the basis of geographic

location (e.g. local contractor)

– Tie Bid Process

• Tie bid resolved with a coin toss (consistent with

procurement best practice and legally recognized)

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Approval Thresholds

Tenders and RFPs (excluding Consultants)

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Consultants

Approval Thresholds

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Direct Negotiation Approval Requirements

• Limited application as per Agreement on Internal Trade

Approval Thresholds

Procurement Value Required Approvals Up to $5,000 Purchasing Card or Cheque Requisition $5,000 to $100,000 Purchasing Agent and Dept Head $100,000 to $1,000,000 Purchasing Agent and Dept Head and Treasurer $1,000,000 and over Purchasing Agent and Dept Head and Treasurer and Chief Administrative Officer

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Council Workshop

– February 9, 2015 Council Workshop on Procurement – Guest Speaker: Mr. Paul Emanuelli

– Recognized as one of Canada’s leading public procurement lawyers – Hailed by Who’s Who Legal as one of the ten top public procurement lawyers from around the world – Program Director of Osgoode Professional Development’s Certificate in Public Procurement Law and Practice and the author

• f multiple publications, including the leading textbook

Government Procurement – Provided significant guidance in the development of the City of Brampton’s current Purchasing By-law

Due Diligence in Public Procurement