Public Purchasing

haldimandcounty.on.ca

Public Purchasing - Haldimand County

Public Purchasing


Role of

Support

Services

Division

• Centralized procurement expertise

/decentralized accountability

• Approximately 1.5 FTE’s administer purchasing

function in Support Services

◦ Manager of Support Services, Cathy Case

Purchasing Coordinator, Lori Friesen CPPB

◦ Administrative Assistant, Marla Garbutt

◦ Cayuga Customer Service Representatives

• Comprehensive Policy & Procedures

• Develop & maintain templates

• Act as a resource for developing bid

specifications

• Review formal documents prior to being issued

• Review case law and industry best practices

• Follow up with vendors – debriefings, legal

challenges, negotiations


2011 Purchasing Activity

(excluding Direct Purchases)

1% 1%

2%

25%

1% 3%

5%

19%

11%

32%

RFP (17)

Tender (47)

RFQ (29)

Informal Quote (38)

Single Source (3)

Sole Source (1)

Emergency (1)

Contract Renewal (7)

Prequalification (2)

Cooperative (4)


2011 Purchasing Activity

(excluding Direct Purchases)

Total $ Awarded

$ awarded*

Goods 6,836,000

Services 3,217,000

Construction 15,451,000

Total $25,504,000

*over life of contract and not

necessarily in 2011

Method of Award

Volume

Council Reports 36

Bid Award Forms 93

Other 20

Total 149

• 25% of awards were made via

Council report

• 75% of awards were made via

delegated authority


Legal

Framework

Fair & Open

Competition is the

Law for the MASH

Sector

• Statutes

• Regulations

• Policy

Directives

• By-laws

• Common Law


Legal Framework

• The Agreement on Internal Trade (AIT)

Equal access for all Canadian suppliers

Annex 502.4 specific to MASH sector

Main premise – fair, open and transparent competition for public

funds

Competitive bids required for goods & services $100,000 or >

Competitive bids required for construction $250,000 or >

Dividing procurement to avoid thresholds is prohibited

Municipalities must adopt procurement policy

• Discriminatory Business Practices Act

Prohibits local preference

• The Competition Act

Address issues such as bid-rigging


Legal Framework

• The Municipal Act

Must adopt policy related to procurement of goods & services

• Municipal Freedom of Information & Protection of

Privacy Act (MFIPPA)

• Municipal Conflict of Interest Act

• Broader Public Sector (BPS) Directive

Applicable to schools & hospitals; recently imposed by Province;

Speculation that it may be extended to municipalities in the future

Open competitive bids $25,000 or greater


Other Key Principles

Safeguarding of Public Funds

Increased competition competitive pricing, better quality

Curb monopolies Reasonable contract terms & thresholds for direct

purchasing

Consolidation of contracts efficiencies and volume discounts

Public Confidence ~ Supplier Confidence

Ensure all bidders are afforded access to government contracts on a

level playing field – fairness principle

Transparency and fairness cornerstones of public procurement

E-Health Scandal, 2009 – favouritism shown toward certain

companies without giving other firms a chance to compete

Bellamy Report, 2005 – MFP Scandal - lack of competitive tendering,

conflict of interest and ethical issues cited.

Gomery Commission/Sponsorship Scandal – lack of public tendering

cited as key factor.


Case Law Affecting County Purchasing

1. Tercon Contractors v. B.C. Ministry of Transportation (2003)


Fairness dispute – lack of full disclosure

2. Tarmac Canada v. Hamilton Wentworth Region (1999)


Conflict of interest and local preference; privilege clause

3. Maystar General Contractors v. Town of Newmarket (2008)


Fairness dispute – post-bid clarifications

4. Bell Mobility v. Dept of Public Works & Govt Services (2008)


Sole source dispute - government amended an existing contract

and didn’t do a competitive bid process – violation of trade treaty

rules


Claims Against County

1. Reid & Deleye v. Haldimand County (2004)

Fairness dispute – alleged County accepted late bid for Grandview

Lodge Redevelopment project

Statement of Claim $1.8M

Settled in 2009

Revisions in 2005 Procurement Policy as a result of this claim

2. Jarlian Construction Ltd. v. Haldimand County (2006)

Claiming Breach of Contract as County cancelled work after award

was made

Statement of Claim $145,000

Ongoing

3. Other Issues (no Statements of Claim)



Rejection of bids at opening

Alleged non-compliance of contract by unsuccessful bidder


Procurement

Policy 05-01

• Initial policy adopted by Transition

Board in 2001 for both Haldimand &

Norfolk Counties

◦ Required a “tender” for any purchase over

$20,000

◦ Required all tenders to be reported to and

awarded by Council

• Revised policy adopted in 2005

• Legal framework

• Efficiencies & increased $ thresholds


Non

Competitive

Purchasing

◦ Under $5,000

Direct Purchases

◦ Staff discretion to purchase directly

without securing multiple prices

◦ No advertising required

◦ Manageable without a PO system

◦ Insurance & WSIB may be required due

to nature of the work


Direct Purchase Limits – Comparison

Municipality

Direct Purchase Limit

Norfolk County Less than $5,000

City of Kingston Less than $5,000

City of Niagara Falls No direct purchase

Brant County Less than $5,000

Chatham-Kent Less than $1,000

City of Belleville Less than $5,000

City of Hamilton Less than $5,000

Region of Niagara Less than $10,000

City of Sudbury Less than $1,500

City of Brantford Less than $5,000

City of Kawartha Lakes Less than $5,000

Haldimand County Less than $5,000


Three primary methods:

Competitive

Bidding

◦ Informal Quote

◦ Request for Quotation/Tender

◦ Request for Proposals


Competitive Bidding Methods

Informal Quote

For goods/services valued at $5,000 up to $50,000

3 prices solicited by invitation

Over $10,000 must be advertised (specific Council direction)

Key areas:

• Specifications, timeline, price, binding signature

No formal public opening

Awarded to lowest compliant bid


Competitive Bidding Methods

Request for Quotation (RFQ) / Tender (RFT)

RFQ for goods/services valued at $50,000 up to $100,000

RFT for goods/services valued $100,000 or greater (must be

advertised electronically for minimum of 15 days per AIT)

Key areas:

• Legal Terms & Conditions, Specifications, Submission Instructions,

Pricing Page, Bidders Covenant

Bid document forms a legal contract (Contract A)

Formal Public Opening

Bids received form legal contracts (Contract B)

All specifications are mandatory

Awarded to lowest compliant bid


The Importance of Specifications

Item Required:

◦ Wood Burning Stove

Specifications:

◦ Guaranteed to burn up to

four hours

◦ Fire box dimensions must be

24”h X 24”w X 36”d

◦ To be furnished complete

with “through the wall” type

stovepipe


Competitive Bidding Methods

Request for Proposals (RFP)

For any dollar value where a specific solution cannot be easily

identified

Most often used for Consulting Services, Design-build contracts

Advertised openly

Key areas:

• Legal Terms & Conditions, Scope of Work, Submission Instructions,

Evaluation Criteria, Bidders Covenant and Pricing Information

No Public Opening of proposals/pricing

2 envelope process

(cont’d)


Competitive Bidding Methods

Request for Proposals

Evaluation Committee - minimum of 2 members of staff

Blackout period during evaluation

Allows evaluators to focus on technical elements without being

influenced by pricing

Stage 1 - Technical evaluation – objective vs. subjective

Benchmark score must be met to proceed to Stage 2

Can incorporate additional review prior to pricing – ie. interviews

Stage 2 - Pricing evaluation

Price is divided by points to determine the Price Per Point

Awarded to lowest price per point


Two Envelope RFP - Example

Bidder A

Bidder B

Example 1

Technical Score 75/100

Technical Score 85/100

Bid Price $200,000 Bid Price $250,000

$200,000/75 = $2666.66 per point $250,000/85 = $2941.18 per point

Bidder A is awarded the contract

Example 2

Technical Score 72/100

Bid Price $400,000

Technical Score 85/100

Bid Price $450,000

$400,000/72 = $5555.56 per point $450,000/85 = $5294.12 per point

Bidder B is awarded the contract


Other

Purchasing

Methods

1. Prequalification (RFPQ)

2. Cooperative Purchasing

3. Multi-year Contracts

4. Negotiations

5. Emergency Purchase (noncompetitive)

6. Single Source (non-competitive)

7. Sole Source (non-competitive)

8. Best & Final Offer (BAFO)


Co-operative Purchasing

• Member of the Grand River Purchasing Cooperative


Brantford, Brant County, Norfolk County, GEDSB, BHNCDSB,

Haldimand County, Brant Community Healthcare, Long Point

Conservation Area, John Noble Home (LTC)

• Ontario Supply Chain Management

• Delegated Authority up to $250,000 to Manager,

Support Services to utilize other cooperatives


Risk

Management

Risk Management

◦ Bid Deposits

◦ Agreement to Bond

◦ Performance Bond

◦ Labour & Material Bond

◦ Maintenance Bond/Warranty

◦ Insurance Certificate(s)

◦ WSIB Clearance Certificate

Exclusion of Bidders in Litigation

Bidder Suspensions

No Local Preference


No Local Preference

• Discriminatory Business Practices Act


Unlawful to discriminate based on geographical location

• AIT


Requires general reciprocal non-discrimination across Canada

• Narrows competition

• Risk retaliatory protectionist measures by neighbouring

municipalities

• Difficult to define “local”


When is a

Council

Report

Required?

1. Exceeds delegated authority $

2. Bid is over budget or not

included in current budget

3. Prescribed by statute

4. A project requiring debt

financing

5. When directed by Council

6. After an emergency purchase

7. Annually for purchases between

$25K - $250K


Delegated Authority to Award Contracts

Dollar Value Authority Approval Method

Under $25,000 Manager Bid Award Form

$25,000 up to

$100,000

$100,000 up to

$250,000

$250,000 or

greater

General Manager

General Manager

& CAO

Council

Bid Award Form

Bid Award Form

Council Resolution

The Mayor & Clerk are authorized to execute contract documents where the

award has been made by delegated authority.


Comparator Municipalities

Municipality

Council Reporting Limit

Norfolk County Over $250,000

City of Kingston Over $50,000

City of Niagara Falls Over $100,000

Brant County Over $50,000

Chatham-Kent Over $100,000

City of Belleville Over $30,000

(consulting contracts over $50,000)

City of Hamilton

Region of Niagara

Council report not required if within budget

Council report not required if within budget

City of Sudbury RFP’s over $200,000

Report not required for tenders within budget

City of Brantford Over $250,000

City of Kawartha Lakes Over $100,000

Haldimand County Over $250,000


Exempt

Purchases

• Training & development, memberships,

books and periodicals

• Witness fees

• Realty services or appraisal of land

• Advertising services

• Library resource materials

• Bailiff or collection agencies

• Utilities

• POA - Interpreter or transcription fees


Procurement Policy Update

Target - 2 nd Qtr 2012

Moving

Forward...

Electronic Document Distribution

Target - 3 rd Qtr 2012

Investigation of Purchase Order System


Target - 2013 as per Capital Budget

Purchasing Card Review

Target - 2014


• An Elected Officials Guide to Public Procurement in Canada

• Ontario Public Buyers Association (OPBA) Website


Questions

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